When People Live Above Their Means

[Weedygarden]

I don't know about any of you, but I've known too many people who have had much more money and means than me, but who cannot figure out life financially. It has long been called champagne taste on a beer budget.

I saw someone recently that I used to see frequently, but hadn't seen in a couple of years, due to life. What she told me was so shocking that I couldn't stop thinking about it for days. She sold her "house" with servant's quarters for almost $2.5 million and sold her cabin for $330,000, all in the last 3 years. She bought a different home for $990,000. She told me she is almost out of money! She has inherited enough to live on for a few years and got a BIG settlement in her divorce.

I think the problem is that when you have so much money, you don't know how to handle it, like people who win the lottery. I think it must be a form of addiction. I'm sure that many people have no clue about budgeting, living within their means, etc. because they want what they want and they are going to get it, one way or another because they WANT it, not NEED it!

I know too many people whose homes have been foreclosed on, during healthy housing markets. I've known people who've made $250,000 a year, and never bought a home, just rented. I've known people who have inherited more money than I've ever had, and are broke with no home ownership.

I looked for some stories about baby boomers who will never be able to retire because of their spending habits. I could not find any, but I know that I used to see them 20 or more years ago.

What is wrong with these people? I bought a HUD home in a marginal area now with homes worth more than $1,000,000 as neighbors. HUD was going to be sued because they refused to sell my home to anyone who was already a homeowner. HUD dropped the price down, way down, and I was there, and blessed to get it. It is paid off.

We could do like another couple I know. I could do a reverse mortgage, take that money and go to Europe for a while. We could do like another family I knew about, farmers/ranchers in South Dakota, who built a new, large home, went to Europe in the summer, and lost their place within a couple of years.

Or we could live frugally, and below or within our means, with no debt, with paying off our property as a priority.

Have you had more than enough money? Have you lived frugally? Have you lived above your means? Do you have the latest and greatest in many things in life? Do you have a spouse that you are at odds with about how money is used and spent?

 

[Wingnut]

I bought a "fixer home" and I'm still working on it... I did my research and chose this home for its value, or what its value will be once I'm done working on it. Thankfully, I'm free & clear, and my property taxes are only $100 per year. Every month, I write out a list of known expenses, mostly utility bills, so I know how much I'm going to owe. Basic budgeting skills are important, otherwise one loses count and frequently goes beyond the budget. There are things I'd like to buy (pistachio nut trees, for example) that are just too expensive right now, so I'm gonna buy cheaper trees like apple, peach or pear. At my age, I don't get too carried away, wanting things that I can't afford... better to keep within budget, and be thankful for a roof over my head, and enough food to eat. For me, it's a Zen Buddhist thing, since there's so much cr@p out there one can want... sure, I'd like a Lamborghini Aventador, but will I ever own one? Unlikely... and I'd probably rack up too many speeding tickets with it anyway (sour grapes, lol). In the meantime, 'The Mighty Camry' takes me where I wanna go. I always tell my friends that I'm rich in life experience, which I am... whenever I start feeling like I missed the financial boat & life is passing me by, I bust out my favorite Zen Buddhist proverb and it brings me back to grounded reality:

"IF YOU ARE FILLED WITH DESIRE, YOUR SORROWS SWELL LIKE THE GRASS AFTER THE RAIN,

BUT IF YOU SUBDUE DESIRE, YOUR SORROWS FALL FROM YOU LIKE DROPS OF WATER FROM A LOTUS FLOWER."

 

[UrbanHunter]

I have seen too many people who drive new trucks, live in nice houses, and file bankruptcy on a rotating basis... What's with that?

When we bought our house, the real estate person said you can afford this much, they didn't count food, tithing, or any of the other expenses that we are used to... We simply said no, we can only afford this much house and stuck to our guns on it... Looking back it was a very wise choice.

I have seen times when I had a little more cash than I was used to and ended up spending more on toys than I should have... But, usually I realize my mistake and stop. That's when you need to put all your energy into getting the extra debt paid off as quickly as possible.

 

[Morgan101]

Have you had more than enough money? Have you lived frugally? Have you lived above your means? Do you have the latest and greatest in many things in life? Do you have a spouse that you are at odds with about how money is used and spent?

1.) Have you had more than enough money? NO. Although the operative word here is "enough". Everybody's definition is different.

2.) Have you lived frugally. Again, everybody's definition of frugal is different. We lived within our means, but we didn't pinch pennies.

3.) Have you lived above your means. NO.

4.) Do you have the latest and greatest... NO.

5.) Do you have a spouse... YES. We argue about how it should be spent about 90% of the time.

I was fortunate to be raised by parents who were children of the Depression. They were frugal, and rubbed the buffalo off of the nickel. My siblings and I always called them cheap, but they taught us the value of the dollar, and how you had to work to earn it. Those lessons I still hold to this day.

 

[The Lazy L]

“She sold her "house" with servant's quarters for almost $2.5 million and sold her cabin for $330,000, all in the last 3 years. She bought a different home for $990,000. She told me she is almost out of money!”

Just because she sold the house and cabin for those amounts doesn’t mean she cleared those amounts. Bet ya a dollar she has a mortgage on her $990,000 house.

Because of my wife’s inability (or unwillingness) to be financially responsible I’ve kept “our” finances separate starting a few years after we married. The turning point is when I was told that she wasn’t going to waste HER money on bills, that was my responsibility!

 

[Morgan101]

I have seen too many people who drive new trucks, live in nice houses, and file bankruptcy on a rotating basis... What's with that?

And they have the latest cell phones, expensive wide screen TV's with cable and all of the premium channels, eat in restaurants every night, probably smoke, I'm sorry, how many tatoos do you have? But they can't afford healthcare, and I have to pay for it.

 

[The Lazy L]

And they have the latest cell phones, expensive wide screen TV's with cable and all of the premium channels, eat in restaurants every night, probably smoke, I'm sorry, how many tatoos do you have? But they can't afford healthcare, and I have to pay for it.

Yep! Former coworker had a house and cottage with 2nd mortgages. Borrowed from 401K to buy the newest iPhone. Then bought a Hummer to compete with his wife’s ex.

 

[Spikedriver]

One of my coworkers is like this. He owns 4 rental properties and probably grosses a little over 100k at work. But he spends every last dime buying crap.

When I told him I bought a new Toyota Tacoma with cash, he looked at me like I'm crazy. When I said that credit cards are the financial problem, not the solution, he looked at me like I'm crazy. When I said I have enough cash to cover basic expenses for a year, his mind was blown. He actually thought that was stupid because "You could buy stuff you want with that money"!

I operate on the principal that money is hard to get and easy to lose. I don't have much "stuff". No boat, no Harley, no ATV, no hot tub. I have 2 cars, and 1 is for my kid to drive. I live in a 2 bedroom apartment that's cheaper than even buying a mobile home, once you figure lot rent into it.

I think the main thing is figuring out what you need vs. what you want. I try to buy a little good stuff and no crappy stuff. I won't mess around with a vehicle that has 250,000 miles because I can't afford to be stuck without reliable transportation. But I don't need a damn $70,000 SUV. My credit card usually has $2500 or more on it every month, for travel expenses, but I pay it off with expense reimbursements from work and I don't carry the balance.

What do you need, vs what do you want? Figure that out and the picture gets a lot clearer in a hurry...

 

[angie_nrs]

What is wrong with these people?

They are looking for validation in the wrong places. The problem is.....they'll never find it AND they'll go broke trying to obtain something they'll never get. Misery begets more misery.

I think the trick to finding happiness lies with being thankful for what you already have. When you live in a grateful state, money finds you. Hubby and I don't waste our time on trying to impress people (most of which) we don't even know. We spend our money frugally b/c that's how we've always been and we've been happy living that way.

We have some nice things but we've earned and paid for every single item. We didn't want to give the banks or CC's our hard earned money for interest when we could simply save for what we wanted. It makes that 'something' so much better (and you can enjoy it so much more) when you can pay for it outright b/c it doesn't come with an anchor of a payment book. I wish those who overspend (immediate gratification) could feel that feeling.......b/c it's awesome.

 

[Caribou]

I have sufficient funds because I live frugally. The last house I bought was on a 15 or 20 year mortgage. I paid it off in a year. Paying interest is just like flushing your money down the drain. If I had a typical 30 year mortgage, and paid on the schedule, I'd have paid enough for two houses. I wouldn't have made a dime when I sold it. I pay cash for my cars, for the same reason. My brother keeps bringing me ideas to improve the marina, each one includes borrowing money.

My SIL makes more money than my wife and I together on our best year. My brother does well also, yet they scrape by. She had an accident and totalled her car. They had to borrow a down payment from our parents so she could buy a car and keep her job. He is the better brother. I can tell stories like this all day long about tons of people. It is not how much money you make it is how much money you spend and how you spend it.

 

[Supervisor42]

I spend more money than I take in as income some months.
Am I living above my means?
...Or was that the reason I spent over 4 decades building a huge 'nest-egg' for old age?

 

[Spikedriver]

I spend more money than I take in as income some months.
Am I living above my means?
...Or was that the reason I spent over 4 decades building a huge 'nest-egg' for old age?

I bet if we stepped back and looked at your "big picture", the money spent was spent well...

 

[dademoss]

Reminds me of my inlaws. He retired, I think he got an annuity from his description. Custom Built house, Architechs, fancy deep water lot. Big boats, trips to Italy, BMW 7 series, Corvette, etc etc etc (none if it his idea, btw). On our first visit (in an old paid off Toyota 4x4 that she made me park out of sight ) I got lectures on how we had to keep moving up, spending, better cars, etc etc etc. It didn't take, still in our first house, in the suburbs, but all the cars and such are paid off, bills paid in full every month.

Last I hear they were selling the corvette, and trading in the BMW, couldn't afford to repair them, even though they were paid off. Couldn't sell their house, they were upside down due to a revers mortgage to finance her spending habits.

 

[SLADE]

I don't care how the next guy lives as long as he or she keep their nose out of my business.
It's my ship and I will sail it.

 

[rice paddy daddy]

We’ve always been the “working poor”.
Even today, in retirement, our adjusted gross income is way below the federal poverty line.
When mom died, I inherited a decent sum. We didn’t blow it, we paid off the mortgage, had the land worked with heavy equipment to improve the water flow in heavy Florida rains, had a bunch of fencing done, and bought us each a brand new truck.
We used all the money, but used it wisely.

At age 74 I’m still working to help make ends meet. We have no credit cards nor loans of any kind. But just living eats up our Social Security.

That’s ok that we don’t have much money. The Lord has blessed us with riches beyond measure.

 

[bkt]

I'm blessed that neither I nor my wife are nuts. About money, anyway. We live well within our means and carry no debt that we couldn't pay off in one payment. (And the debt we do have is at 0% interest or very close to it.) If we did get hit with a large windfall of cash, we'd save it or use it to improve the house/land or otherwise turn it into something that holds its value.

A few years ago, a former co-worker was bragging to me how he made a big effort to become an expert on this special software that the DoD uses. This got him a high-paying job in D.C. After a couple years, he bought a 5000 square foot home (up here in Rochester, not down in D.C.) and Lexus SUVs for him, his wife and his two daughters (who were in their late teens at the time).

Then the DoD stopped using that software.

He's destitute, now. Having saved nothing and always remaining in huge debt he now has virtually nothing.

 

[Weedygarden]

I read this story on Reddit today.

"My parents and I might be homeless in 5 days and I've never been more afraid in my life​

All of this is true - it sounds completely made up, but no, its true and I can prove it.
I'm 36 and moved in with my parents 3 years ago when their health started failing. I wanted to help out financially and just by being there.
My mom is having a major surgery on Monday.
I found out after I moved in that their home of 40 years went into foreclosure after my dad couldn't work. We have a lawyer who's been helping us try to negotiate with the lender to keep the house.
Today the sheriff placed an eviction notice on our door - we have to be out by Tuesday. Apparently the bank sold the home and we weren't notified of the sale. (I'm abbreviating here)
Our lawyer is going to court tomorrow to do what he can, but I'm so so scared. So are my parents and my heart bleeds seeing them like this. They have nothing to show for a life spent working. They're each 1st gen Americans, and badly mismanaged their finances when I was growing up. I hate this.
I have a good job, but my credit score is 30 points lower than it needs to be for me to be able to qualify for a loan to buy the house and thus save it. I have no real savings, they have no real savings.
We have....nothing. There's no safety net. There's no family or friends coming to help. All I have is a house filled with 40 years of my parents lives (and 3 cats) to somehow move in 5 days. How? To where? I have no idea.
And I've faced a full frontal reckoning with my privilege. Housing was something I took for granted. Never again.
I'm too scared and too ashamed to tell any of my friends - bc what can they do? Its humiliating. I have to pretend to be ok at work while this is happening. Wondering where I'm going to be sleeping in 5 days. Will we have to abandon our cats. How can we go to a shelter if my mom is recovering from surgery? I cry a lot but I don't want them to see - I want to be strong for them.
Please pray for us because I've never been this afraid."

 

[Weedygarden]

I bought a "fixer home" and I'm still working on it... I did my research and chose this home for its value, or what its value will be once I'm done working on it. Thankfully, I'm free & clear, and my property taxes are only $100 per year. Every month, I write out a list of known expenses, mostly utility bills, so I know how much I'm going to owe. Basic budgeting skills are important, otherwise one loses count and frequently goes beyond the budget. There are things I'd like to buy (pistachio nut trees, for example) that are just too expensive right now, so I'm gonna buy cheaper trees like apple, peach or pear. At my age, I don't get too carried away, wanting things that I can't afford... better to keep within budget, and be thankful for a roof over my head, and enough food to eat. For me, it's a Zen Buddhist thing, since there's so much cr@p out there one can want... sure, I'd like a Lamborghini Aventador, but will I ever own one? Unlikely... and I'd probably rack up too many speeding tickets with it anyway (sour grapes, lol). In the meantime, 'The Mighty Camry' takes me where I wanna go. I always tell my friends that I'm rich in life experience, which I am... whenever I start feeling like I missed the financial boat & life is passing me by, I bust out my favorite Zen Buddhist proverb and it brings me back to grounded reality:

"IF YOU ARE FILLED WITH DESIRE, YOUR SORROWS SWELL LIKE THE GRASS AFTER THE RAIN,

BUT IF YOU SUBDUE DESIRE, YOUR SORROWS FALL FROM YOU LIKE DROPS OF WATER FROM A LOTUS FLOWER."

Tracking monthly expenses is something I have done most of my adult life. I have usually had a wish list of things I needed or wanted, but needed to work with what I had to be able to obtain them.

I would love to have a pistachio tree, but they probably wouldn't grow in Colorado! I looked and they are over $100 each! Yikes! They do grow really slow and only reach around 20 feet high, so the best we could do here would be to grow one in a green house.

Can you grow citrus where you live? I do know that I have seen nut orchards in New Mexico, along I-25, on the west side. I cannot tell you where exactly, but somewhere between Albuquerque and Las Cruces.
A Lamborghini Aventador could get a person in BIG trouble!

 

[Dani]

“She sold her "house" with servant's quarters for almost $2.5 million and sold her cabin for $330,000, all in the last 3 years. She bought a different home for $990,000. She told me she is almost out of money!”

Just because she sold the house and cabin for those amounts doesn’t mean she cleared those amounts. Bet ya a dollar she has a mortgage on her $990,000 house.

Because of my wife’s inability (or unwillingness) to be financially responsible I’ve kept “our” finances separate starting a few years after we married. The turning point is when I was told that she wasn’t going to waste HER money on bills, that was my responsibility!

Are you still married? I'll be honest here. Hunny and I have kept seperate bank accounts since day 1. I tend to save and Hunny is the one who has some saving but tends to spend way more money than I think is "neccesary". When we first bought our house, we divided the household bills, Insurance, taxes were a 50/50. Food contributions were mainly me but Hunny takes care of the animal feed, as in cattle, goats and pigs. You need to talk all this out before the "I do" part.

 

[Wingnut]

Lot of that financial grief happening nowadays, I reckon, Weedy, and some of it just scams on the web to solicit donations... but I feel for those who are actually falling into that pit and will soon be homeless. That's why it was SO important for me to find a fixer home I could buy with cash, no mortgage involved. And LOW property taxes too, some of those "rich" fooliots back on the beach in Kalifornia are paying INSANE amounts of property tax, just plumb friggin' KRAZY!

Citrus trees do NOT do well here, not in the open anyway... I tried citrus in Benson (lower elevation) and it was a losing experiment, might as well have been betting on cr@ps in Vegas, lol. My home in Benson was at 3620' elevation, while here in Alamo I'm at 4340' or so... no good for citrus, it needs more of a Mediterranean climate. However, hardier trees such as apple, peach & pear will do well here, along with pecan and pistachio nut trees (probably what ya saw off I-25).

As for the Lambo Aventador, well, it's just a pipe dream, I took some pics of an old Chevy pickup in town today, and I'd just as soon have THAT for cruising this (red)neck of the woods, lol. I was gonna post these pics in the 'Car Porn' thread, and I will probably still do that, but I might as well post 'em here too... can you see THIS rig going up against the Aventador? Meh, the Chevy driver would have the last laugh as he (or she) passed the roadside Lambo getting a speeding ticket, lol...

Sweeeeeet ol' Chevy, that's for sure... I like the personalized 'PAULINE' plate, lol. The Pistols did a song with the name Pauline in it, lyrics went something like this: "HER NAME WAS PAULINE, SHE LIVED IN A TREE!" Pretty sure it was the tune 'BODIES' by the Pistols, I'll hafta scare up a link... I'm thinking those clowns in the Pistols didn't think far enough ahead to cover finances, with the possible exception of John Lydon (a.k.a. Johnny Rotten), that crazy fool, lol.

Pistols

A harsh commentary on abortion if ever there was one... and like me, I don't think the Pistols were big on abortion, aye? Funny how the comments below the video "validate" the true hardcore punk rock nature of this tune, throwin' out lyrics guaranteed to create controversy, lol. But THAT is what punk rock was all about, yeah? Some saw it as bellyaching, but others saw it as music which needed to be sung, whether any douchebags liked it or not, BWAHAHAHAHAHAHA!!!

OKAY, I'M DONE HERE, BUT I STILL LUV YA, WEEDY!!! YOU'RE THE ONLY SANE PERSON HERE, LOL...

 

[Wingnut]

Gee, before anybody starts lambasting the Pistols for being HEATHENS, let me post this orchestral version of EMI, one of my favorite Pistols tunes back when my friends & I were skating vertical on my family's home property in Coronado. Huge wooden ramps, killer tunes, lots of party action, it wasn't a bad deal, lol... but lemme post this link to the goldurned Pistols & LSO (London Symphony Orchestra), those blistering vertical riding sessions we had were some HELLER GOOD TIMES that the CURRENT FRAUDULENT SCUMBAG ADMINISTRATION couldn't possibly make happen, 10-4?

Pistols

Here's the original version of EMI, my friends & I listened to it on our way out to the crags to climb gnarly routes, lol...

The Bad Boy Version

 

[FarmOR]

Sometimes when I'm driving my perfect for me , auction bought Chrysler I close my eyes and imagine that I am driving a Bentley. Faster than I can run off the road, I am over it.

Consumerism is rooted in low self esteem. Study marketing for a short time and you will come to this ultimate truth.

I grew up with uncanny similar circumstances to Rich Dad Poor Dad. I was lucky enough to have two Rich Dad examples to learn from. I learned the keys to success very early: "Industry and Frugality. Such as waste neither time nor money." B. Franklin

 

[The Lazy L]

I don't care how the next guy lives as long as he or she keep their nose out of my business.
It's my ship and I will sail it.

Yep. If it doesn’t break my arm or take money out of my pocket my care level is very low.

 

[LadyLocust]

The mentality that is promoted to young people today is “as long as you can afford the payments.” That’s so dangerous but they aren’t taught about the risk nor are they taught about the potential if saved. I do think the FIRE movement has at least opened the eyes of some.