Yes there are people who spend what they want to spend, and then do elicit $$ for emergencies from relatives who they know have the $$. It depends how much ‘enabling’ behavior is done through life. There are people that also don’t want to see their grandchildren go w/o - no matter how the parents blow through their paychecks. Some believe they are living the American dream TODAY with no plans for tomorrow. Their thinking is like adolescents - nothing bad will happen to them - even the day to day routine costs.
Oh I so agree about travel sports. And some of the frequency of the sport on certain muscles/tendons can actually hurt the young person from going on with the sport later on. I have seen this with a female HS swimmer with swimming the butterfly stroke (her injury made her ineligible for college ROTC), a female softball player/short stop, who is taking injections during junior college just to get through the pain and keep her athletic scholarship. Etc.
However regular HS band and sports take $$ that blue collar workers do struggle to pay for. One of the nursing assistants I work with pulled some extra work shifts in order to save up for fall band and sports costs. Our work place matches 3% on 401k, yet I talked to a gal that has worked FT there for 7 years not take advantage of it - and the pre-tax $$ out of her paycheck would not be missed (a short few minutes and she decided to sign up and was excited about having this pool of money build over time).
“I am much more familiar with couples, having two moderately well-paying jobs, who literally don’t have $1000 for an emergency.” - Wow… I don’t know many in that situation. That’s sad. I do feel for those making low salaries, especially in areas where cost of living is high.
We have a few agencies in our town that try to be a safety net to very low income (working poor) families living close to the edge. Without the tide-over help, they risk being homeless with unexpected expenses.
I have known a number of people with little extra money for emergencies. However, most of the time, they don’t have to come up with cash. They put it on their credit cards and pay the interest, piling up the debt. I suspect many people could not function at all if they had to come up with cash, and couldn’t just keep charging things. However, no doubt they would spend less and save more, but having credit substitutes for the emergency fund. Truthfully, we’ve never kept much in our account in cash, we have put everything into paying off debt, and use our credit cards and HELOC as an emergency fund, paying them off ASAP. I hate paying interest.
@shawbridge I am sorry you lost out a n the house. It sounded lovely. I just wanted to say it sounds like we live in the same town! We have the demographics you describe including a prison! If t is the same town (does it by any chance have two centers?) we plan to stay. So much to do outdoors yet not far from the big city.
I met with a bunch of “kids” today - they are graduate student interns where I work. I told them they need to consider things other than money while making their employment decisions as they graduate, such as hours expected to work, benefits, etc. It was all I could do NOT to tell them to make sure they are contributing at least up to the matching point of any retirement plan offered to them. It just wouldn’t have been appropriate, given the setting, but it’s amazing how many really smart students just don’t get some of this stuff until later than they should.
They told me that, too. But I didn’t listen and didn’t earn enough to really make much difference anyway. I just max contribute now that I am able and also utilize the catch-up allowance. Still works out for a healthy retirement. Considering they’re grad students, they should have sufficient income some point in their lives when they see the light.
I am very grateful to Stan and Bob, two older coworkers that each took the newbies into their offices one at at time to basically say, “thou shalt contribute to your 401k”. It was a fairly new program in mid 1980s. They had decent future themsleves at upcoming retirement via generous annuity pension plans and SS, but they were shrewd enough to realize our generation needed to build a good 401k nest eggs.
So, you had money in the market for 3 different crashes. Did you recover well each time? I’ve only been through 1 crash so far but it seems that if you stay in long enough it eventually equals out? That your experience?
2 market crashes here… Dotcom bust and the 2009 crazy nosedive… Seen to have recovered well. As long as you are diversified and don’t chase the nifty fifty, you are ok.
As far as investing education goes, I really like this book:
I see there’s a new edition. Thanks for the suggestion, I’ll take a look. I’m getting to that point where I need to take this seriously and the amount of money involved is becoming significant. Got about 15 more earning years in the tank, with two teens entering college over the next couple years. Changes a guy’s perspective.
I am a late starter with respect to retirement savings. Did not have much to contribute as a grad student or postdoc with low stipend plus being in a high cost of living area (then daycare towards the end of postdoc). I probably started contributing to my 401k at age 32, and then not at the max, although I worked for a university with a pension plan. I regret some not starting earlier, but it was difficult under the circumstances.
I wish that I could say I was a hero during the crashes, but I wasn’t (i.e., I didn’t rebalance aggressively). But, I wasn’t a goat either, and stayed on course and steady. It’s not a loss until you sell. And if you sell, how will you know when to get back in? Market timing is a mug’s game.
