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DCUM and Financial Conservatism
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Anonymous
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I'm interested in views about why excessive financial conservatism seems to dominate on DCUM, e.g. consistent advice to professionals with high incomes to buy far below their purchasing power when shopping for home, denigration of anyone considering the purchase of a luxury car, etc.
It seems to run contrary to how most high-income professional families actually behave in the DC metro area, e.g. most families, including ourselves, we know making over $250k a year are driving a an upscale car, or living in a home worth over $800k...but from DCUM it seems this is deemed ridiculous or gauche...sure there are those that are frugal in these income groups, and value/spend on different things, but certainly does not seem the overwhelming majority as this sites seems to make it appear... why is this thread so acerbically judgmental about how affluent, successful people spend their money? |
Anonymous
| I don't care. In fact, spending more helps the economy. I only care if your actions affect me negatively, as in, when taxpayers have to bail out the fiscally irresponsible. Otherwise carry on. |
Anonymous
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I agree with you that there is a tendency for people on here to advocate for being frugal more than it seems like people are actually living frugally in the DC area (or in some parts of the DC area.) I think there are a couple of reasons:
1.) People tend to think that "normal" is whatever is normal for their peer group and their experience. 2.) Plenty of people have seen friends and relatives live a lifestyle that stretches them to the edge of what is financially prudent and then get into trouble/be constantly stressed about money. It is hard to know when you see someone who has nice things/live in a nice house if they are really doing so while keeping a healthy savings rate or they are doing so by overleveraging themselves. 3.) Life is about choices and we won't all choose to spend our money the same way. I make way more than $250,000 but I drive crappy cars and, while my house is "worth" $800,000 today, I wouldn't take on the kind of debt that others take on to buy a house that costs that much (or even that much debt - 20% down). I don't care about cars and I don't like to be tied down by real estate. That is just me. That's what I like and, of course, I think that my way is the best and I am going to counsel others to follow my path. But, I also recognize that there are people out there who love cars, want a big house, don't like to travel, don't care about being able to change paths quickly, etc. so my way is actually not the best for them. |
Anonymous
| On the whole, spending every penny that a bank would loan hasn't worked as a financial plan so far. I think you're hearing from real people who have been in your place and offer sage advice knowing that most will not hear the advice. DH and I grew up poor and would be considered "rich" by any measure now. Living "modestly," debt-free and with funded savings/retirement/college accounts in our 40s is truly a remarkable feeling and gives us an enormous sense of accomplishment. Since our first jobs out of college we chose to buy things we have the cash to own. (We did have a mortgage for 15 years.) |
Anonymous
| You spend. I'll save. When you lose your job or can't pay your mortgage, raise my taxes. That about sums it up. |
Anonymous
| Maybe because all the people who are spending the money know they're in a bad situation and shouldn't be giving advice. It's not like you've got a statistically valid sample here. |
Anonymous
| "But everyone we know lives in big houses and drives luxury cars." |
Anonymous
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It is a pretty simple answer actually-- sign of the times. It isn't limited to DCUM posters either.
The global financial recession has had effects on many people - and I will easily say that it is going to have an effect on EVERYONE. From real estate, to finance, to biglaw, now hitting government, and we're all certain to feel higher taxes, lower social services, or both as the country faces both the effects of the recession and structural budget problems. Frugality is in vogue now, as it is during down economic cycles. There isn't as much "security" with investments, jobs, home prices, price stability as there was 5 years ago. You are getting advice from two camps of people: (1) those who acted conservatively during the boom times - didn't take on too much debt, built up savings---- and are thankful they did, so advise others to follow this right path (2) those who took out big loans for houses, cars, college, etc, and lived above or right "at" their means---- and are hurting now, so advise you on how to avoid those same mistakes. Another thing--- I think many of the posts are aspirational, and reflect a bias-- someone who weighs 350 pounds but has a $350K HHI will be the first to post on the HHI thread because it makes her feel successful compared to others; but she wouldn't post on a weight thread since she'd get bashed. And I think people are jealous and just want to bash or criticize. I think-- don't take on too much debt, but do spend if you can afford it in this economy, and mainly enjoy -- restaurants, travel, a new car if you need and can afford it, etc. |
Anonymous
| Also, there have been articles in the news lately about how VA and MD suburbs have some of the highest household debt-to-income figures in the entire nation. |
Anonymous
| Because the way people tell others to live is not always reflective of the way they actually live. I have no doubt that many of the so-called "frugal" posters on DCUM are actually the ones with the flashiest cars and nothing in the bank. |
Anonymous
I don't agree with this. |
Anonymous
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I don't know. My DH and I are in that income bracket, and most people we know live pretty conservatively, including us. I can only think of one family we are close with who drive the big flashy cars and live in the house with the jumbo loan, and make $250k. I've always assumed the people with the 800k house and flashy cars are making more. But who am I to speculate. To each their own.
Agree with the pp who commented that we each probably run to the threads where we feel we can give advice - I live frugally, so I always jump in on these threads. I don't, however, chime in on threads where people are sharing how much their husbands chime in around the house, because it is a constant fight to get DH to pick up his socks or put away the dishes. |
Anonymous
| if you have a secure job, the down market is your time to both invest (securities low across the board) and to access finance (interest rates are not low in up markets). Of course leveraging yourself to the hilt doesn't make sense, but excessive frugality can also lead to poor financial outcomes...i.e. buying a cheaper house in a distant suburb when you actually desire to live close-in might lock you in to poorer investment even though you have a smaller mortgage. |
Anonymous
This. The people who post on threads about finances are the most frugal people, and they feel strongly about the rightness of their choices. I never post on those threads because those people would consider some of my choices irresponsible (e.g. I am a SAHM of 3, and we have six digits of student loan debt and are not saving anything for our children's college educations). I don't believe for one minute that those threads of all frugal people are a representative sample of the DC area or DCUM. |
Anonymous
Thank you for asking this!!!! I've wondered about this too. The only thing I've been able to come up with is that people are for some reason supposed to be ashamed of themselves if they have money and they're financially successful. For example, you can't show off your 2.5 carat center stone because it's in poor taste, yet you can show off your teeny tiny ring (post it on facebook, etc) and everyone will oooh and ahhh in appreciation, because somehow that's okay, and we should all oooh and ahhh and something that's really not impressive or oooh and ahhh worthy. |