Are Americans getting sick of taking on debt?

Parent Cafe
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<p><a href=“http://www.nytimes.com/2008/02/05/business/05spend.html?pagewanted=1&ei=5087&em&en=88ddcd6543c43e40&ex=1202360400[/url]”>http://www.nytimes.com/2008/02/05/business/05spend.html?pagewanted=1&ei=5087&em&en=88ddcd6543c43e40&ex=1202360400&lt;/a&gt;&lt;/p&gt;

<p>"For more than half a century, Americans have proved staggeringly resourceful at finding new ways to spend money.</p>

<p>In the 1950s and ’60s, as credit cards grew in popularity, many began dining out when the mood struck or buying new television sets on the installment plan rather than waiting for payday. By the 1980s, millions of Americans were entrusting their savings to the booming stock market, using the winnings to spend in excess of their income. Millions more exuberantly borrowed against the value of their homes.</p>

<p>But now the freewheeling days of credit and risk may have run their course — at least for a while and perhaps much longer — as a period of involuntary thrift unfolds in many households. With the number of jobs shrinking, housing prices falling and debt levels swelling, the same nation that pioneered the no-money-down mortgage suddenly confronts an unfamiliar imperative: more Americans must live within their means.</p>

<p>“We don’t use our credit cards anymore,” said Lisa Merhaut, a professional at a telecommunications company who lives in Leesburg, Va., and whose family last year ran up credit card debt it could not handle. "</p>

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<p>Sometimes I feel like I’m the only person who has never made a late payment on any bill paid an interest charge on a credit card (always pay it off in full), no banking fees (why would you pay to take your $ out of the bank?)</p>

<p>Haven’t had a car loan since 1989. Only debt I have is my house (which I bought less of than I could afford).</p>

<p>People have to be less materialistic. IMO, much of consumer debt is for “wants” and not “needs”. Big cars, fancy vacations, expensive (and lots of) clothes. </p>

<p>It’s a mentality issue that it’s okay to owe. I don’t subscribe to that theory</p>

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<p>I think there are some things it’s worth owing for and others it’s not. BTW: I don’t use a credit card or have any credit debt. I would be wiling to incur debt for car (have) a once in a lifetime vacation (took my kids to Paris. Will treasure always), four years off when kids were babies (got into debt I immediately paid back when I was working again.</p>

<p>I think most things are a balance. I don’t feel going to Paris was “materialistic” in a negative way. It was such a learning experience. I speak French rather well (I hope marite does not read this – not that well) and I wanted to show the kids we could go places where people don’t speak English (we found some) and navigate and not to be afraid of the world. I would do it again and incur debt, provided of course I could pay it off.</p>

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<p><a href=“http://money.cnn.com/2008/02/01/news/companies/Boyd_HomeEquity.fortune/index.htm[/url]”>http://money.cnn.com/2008/02/01/news/companies/Boyd_HomeEquity.fortune/index.htm&lt;/a&gt;&lt;/p&gt;

<p>“Home equity loan defaults soar
As credit woes seep into prime home equity lending, a spigot of ready cash for some homeowners is turned off.”</p>

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<p>The banner should read, “Are Buyers of Debt getting sick of Americans?” This crunch has to do with buyers not sellers, demand side economics.</p>

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<p>lol…</p>

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<p>*Haven’t had a car loan since 1989. Only debt I have is my house (which I bought less of than I could afford).</p>

<p>People have to be less materialistic.*</p>

<p>I did have grandparents- who managed to pay cash for their home- on the salary of a saleclerk and a shipfitter with an 8th grade education in the same neighbothood that Jamie Moyers family ( pitcher for the Mariners who was traded to the Phillies in 2006) and Ron Reagan live in.
(* of course my mother who was an only child- has all but completely gone through the money from the sale of that house + their accounts-she also had help from my brother and sister, they would ask for money whenever they wanted something, but I am too proud/stubborn/ethical?, I wouldn’t even accept jewelry/gifts when my great-aunt tried to give it to me, I didn’t want her to think that I valued her things over her friendship- unfortunately I didn’t realize at the time, the joy that sharing things brought to her*
However- the trajectory for blue collar workers wasn’t so bright in the 1980s and we were forced to use credit cards to buy groceries and pay for medical bills when company closures & job losses forced our hand.</p>

<p>I wouldn’t say we are materialistic at all.
We aren’t monks- we have taken on debt to buy a house ( our family of four has lived in a 2 bedroom 1 bath for 24 years-it could have been almost paid for- however we had to borrow to pay the EFC) ,
to send our kids to college, to get retraining to get a better job. Some fields that were well paying in the 1980s , started slipping in the 90s & now I am interviewing for starting level jobs at almost the same rate that my H makes- after 30 years in a technical, skilled career. </p>

<p>Its true- we could only dress from Value Village ( although I have found sales at the GAP to be significantly cheaper much of the time) we could forgo our once a year ski vacation to the eastern side of the state, and we could shop at Safeway, instead of trying to find organic local food.</p>

<p>Food is a huge expense, but as we all had been exposed to heavy metals/chemicals, through our residence/work and have problems that could be related to that, I also feel that nutrition is very important.
Vitamins and supplements have helped, but those of course are also very expensive.
I realize I am going off on a tangent- :o I just found out that the ACT wont accept Ds testing by an educational psych, because it is over three years old. I had to pay for it three years ago, as the school district refused- although they now give her accomodations because of it, & now I have to pay for it again.</p>

<p>anyway- I was just thinking- what would happen if we switched to a barter economy- more self sufficient?
We are already seeing businesses closing because of the slowed economy- and what plans do we have in place for those workers?
[18 sawmills have closed](<a href=“http://www.komotv.com/news/local/15331651.html”>http://www.komotv.com/news/local/15331651.html&lt;/a&gt;)</p>

<p>However- I am in process of growing what food I can- on our small urban lot- this is the first time I have attempted it- so should be interesting- but I hope to get enough, so that I can perhaps even sell some at a local farmers market. We are fortunate to have a climate where that is a possiblity- we have water :rolleyes: and even though the growing season is short- there are ways to extend it.</p>

<p>I really feel for the people who don’t even have water- and have experienced some of the many natural disasters that have hit communities across the country. We don’t have a good plan in place to support citizens in those cases, you can’t even take off medical expenses unless it is practically half your before tax income- and it will be years before those folks are on their feet again.
Not everyone gets chosen for Home Makeover.</p>

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<p>Emeraldkity4, there is a lot in your post that leaves room for thought.</p>

<p>This is a college board so…</p>

<p>“We aren’t monks- we have taken on debt to buy a house ( our family of four has lived in a 2 bedroom 1 bath for 24 years-it could have been almost paid for- however we had to borrow to pay the EFC) ,
to send our kids to college,…”</p>

<p>As a society, we should not be asking homeowners of 2 br 1 ba houses to refinance their homes so their kids can go to college.</p>

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<p>Well, lots of us have to, but that was why I paid our mortgage in 12 years.</p>

<p>I think there’s a balance between frugality and enjoying life. Veering to one pole or the other is problematic.</p>

<p>I haven’t had a vacation in five years. Sigh. Just the way it is. But when we go to see S and stay over night we pick the nicest hotel and pretend its a vacation. The extra $50 or so dollars is well worth it to me for one night. For a week? No. And when we visit D we take her to a nice restaurant, and that counts as a vacation.</p>

<p>I am working two jobs. H is working on. Don’t want to feel like Cinderella.</p>

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<p>Americans may be sick of taking on debt but most are addicted to mass consumerism that must be fed with debt. Think back forty years. We got by with one car, one television and a small house. I shared a bedroom with my brother for ten years. Now families need two or three cars, a television and a computer in every room in the house and the sizes of our homes have continued to expand. We eat out or buy prepared foods for over 50% of our meals and have no problem buying our kids $100 jeans. We lease cars, buy boats and jet skis, buy time shares, and spend too much on Christmas. It seems that we are feel that we are entitled to everything and will buy happiness. Unfortunately our economy is now fueled by this mentality and we have tp hand out $1200 to families to get them into the malls or the government believes we will go into a recession. The reality is that we are in a recession and a few dollars spent at Walmart and Best Buy is not going to solve the long term problem. We need to strengthen the dollar and bite the bullet on the economy. Putting a bandaid on the wound is not going to fix the long term problem. Unfortunately, no one is willing to make the hard choices to fix the problem.</p>

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<p>“As a society, we should not be asking homeowners of 2 br 1 ba houses to refinance their homes so their kids can go to college.”</p>

<p>Why not? K-12 education is an entitlement. A college education is not an entitlement. When I chose to have a child, I assumed responsibility for his welfare, including his education. Because his education is my responsibility, the costs of educating him should come from my assets. </p>

<p>The costs of educating a child are a chief reason I opted to have only one child, and his education costs are challenging for our family, especially in this economic climate. Federal financial aid is paid for with tax dollars. College grants are covered by those who pay full price. The wealthier among us are already subsidizing the educations of the children of the less wealthy among us, and it seems unreasonable to me to ask for more subsidies. It was my choice to assume the responsibility of parenting and if my finances make it impossible for me to provide my son with a college education, that is our problem.</p>

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<p>*The costs of educating a child are a chief reason I opted to have only one child, *</p>

<p>Interesting- since we are trying to limit ( as a country-) access to birth control-accurate info about contraception- access to abortion- Im’ wondering what people think about supporting families that are larger?</p>

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<p>I’m with you. I can frugal if I have to, but I don’t want to.</p>

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<p>It’s ok to be materialistic as long as one pays everything in cash. I don’t see any problem with that.</p>

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You’re not the only one - I do the same. I charge as much as I can on my Costco AmEx card so they pay me hundreds of dollars a year to use it.</p>

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I agree!</p>

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<p>“This crunch has to do with buyers not sellers, demand side economics.”</p>

<p>Where did this quote come from and how is this related to our credit crunch?</p>

<p>I see post#5.</p>

<p>We have a 1 1/2 year supply of homes for sale. Maybe we should build more? :)</p>