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Documentary: Maxed Out

post #1 of 5
Thread Starter 
We watched this last night, it's about America's debt - most credit card debt, but also the Government spending, and how people get into debt.

We weren't sure if they got the dumbest people around, or if people really can be so stupid...

I mean there was bits that were sad and predatory - convincing people on low incomes to remortgage their house promising cheaper payments, only for payments to skyrocket, all the marketing credit card companies do at colleges to kids who are out on their own for the first time in their lives, and haven't learnt money management...

But then you just had the idiots, that they tried to make you feel sorry for. There was one 57 year old lady who lived in a decent sized house, and her husband died, so lost her main source of income. After a while she realised she couldn't afford the mortgage repayments, savings were gone etc, so she started getting cash advances to pay for the mortgage!! She can't pay the mortgage, how will she repay the cash advances?? Once she realised that as a widowed woman on a fixed income that a large house was expensive and unaffordable why did she not sell it then?? She said she was waiting by the mailbox every day for the foreclosure letter for the house. She was having to sell her beloved possessions to keep going. Why not sell the house???

And then there was a guy who was in the Police, who decided to join the Military Police, and was sent for Iraq for 23 months straight with a wife and new child at home. He was upset at the Government for not matching his Police pay, and because his new pay was lower, the family had to file for bankruptcy because they couldn't afford the bills. He said all the private contractors over there were being paid so much more and it wasn't fair. Sorry dude, you chose to take the job - if you didn't look at the pay and realise you couldn't live off it, it's your silly fault! Not only that, but the family was sitting in a nice house, wearing nice clothes, her hair was beautifully done... They can't be too bad off if they can afford all that nice stuff!

Those 2 in particular were just stupid...
post #2 of 5
I think some of the problem is a feeling of entitlement that a lot of folks have. Sure, some people hit a rough patch -- and I have complete sympathy for someone who has medical bills, unexpected layoff, etc, but there is a lot of just stupid spending.

Why do you need 200 cable channels, or a leased luxury car, or an expensive new kitchen when you can't afford to save anything? If I recall from my college days many kids got in trouble trying to replicate the style of living they had when their parents were paying the bills...so they put it on the credit card and before you know it, they're in the hole.

My inlaws are like this...my MIL can't understand why we would buy a Toyota when we could have the Lexus...um, because we have to retire some day?
post #3 of 5
I saw that too, and it sort of helped DH and I. It also reinforced that what we were doing was right.

In the last three years we've paid off all of our credit card debit, his car, and we are in the process of paying off mine. Once we do that we are never getting in debit again. When we go to buy a house we are going to put 10-20% down so we don't have to pay PMI. (Yes, I know PMI is tax deductible, but I don't want my payments going up because of it.)

It's frustrating to see people that I work with buying cars, homes, and things they can't afford thinking, "Oh, it will all work out some day."

It won't.
post #4 of 5
Thread Starter 
It was heartbreaking seeing the two mothers whose children had both committed suicide because their kids got suckered into credit card debt at college and hung themselves because they couldn't see a way out. Why do credit card companies keep giving these kids cards?!?!?

I don't know what DH and I do, but I've spoken with other stay at home wives with no children that DH works with - our husbands all earn about the same, we all pay about the same in rent, but DH and I have no debt, and we have saved and sent home enough for a deposit for a house. A couple of the other wives are complaining that they never have money, they don't get paid enough, blah blah blah. Live within your means!!!

We would NEVER let ourselves get into the situation where we borrow money except for a house, and that will be something we carefully budget for.

And I can tell you right now that our kids will learn the value of money from an early age!
post #5 of 5
There alot of people who live to impress in the world today.
Way back when (late 70's) when I was in college they didn't have the credit card companies at all -they have standards for income in order to give grant a credit card-even throught the early 80's (I didn't have enough income back then to qualify for a visa/master credit card either).

Some high schools offer some sort of financial course now but also emulate their parents spending habits.

A few days ago in the Wall Street Journal they published an article about the cash advance places setting up shop in section 8 housing areas to "prey" upon folks that their only income is SS or SSI. It was so sad to read.
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