I always hear that people are living beyond their means, but…

[Anonymous]

Six figures of personal loan + six figures of cc debt - how does someone get that kind of personal loan with that kind of debt?

Is this really that normal?

[Anonymous]

I guess people are all over the map depending on their income and expense management. Generally see this more in LMC than UMC

[Anonymous]

My ex husband makes a nice living- has grossed between 500k-and 300k for the past six years.

He’s 277k in unsecured debt. It’s not me folks- I get 1500/month for three kids in a high COL area.

He’s just an alcoholic with impulse control issues. I bailed him out our entire marriage- now he’s screwed.

[Anonymous]

I cannot tell you how many people I know who will do things like go on vacation to Europe in the summer but then let it slip that they don't have a child fund for their kids. Just seems wildly reckless to me, but different priorities I guess.

[Anonymous]

Anonymous wrote:Six figures of personal loan + six figures of cc debt - how does someone get that kind of personal loan with that kind of debt?

Is this really that normal?

Mortgages in the 2000s were crazy

[Anonymous]

The rapid rise in housing has/will offset the current set of UMC people living beyond their means. If they've paid off their house while it shot up in value, that's a lot of equity to pull out through a reverse mortgage to keep the money flowing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It's honestly really hard to gauge how other people are doing financially. There's their income, which you could guess at pretty easily, and their housing costs, which you can also probably guess at pretty easily.

But there are all these other factors. Student loan debt, family money, whether they are needing to support other family members in some way, what kinds of other help they get from family (like grandparents paying for private school, or funding down payments, or maxing out annual gifts), there might be health expenses you can't possibly know about. It can go one way or the other and you just have no idea.

And it's psychological, too. I have some friends who I would assume are very well off -- Big Law partner at a firm where I know what that means in terms of income. They live in a big house in a very pricy neighborhood. But they probably talk about "affording things" more than any of my other friends. They do not take a lot of vacations and the ones they take often aren't particularly extravagant. They do spend money on cars but nothing insane for what I know their income must be. I honestly don't know if maybe they have other expenses that are putting pressure on them, or potentially they are just the sort of people who stress about money a lot. Both grew up UMC but that doesn't mean they didn't grow up without money stress (UMC people can get laid off, their businesses run into rough patches, they have unanticipated medical expenses, etc.).

Meanwhile, we have other friends who might seem overextended from the outside (both of student debt, bought a house even they admitted at the time was more than they could afford, working for government or NGOs where income can never go that high) and they take two foreign vacations a year, always have new everything, and never express any money concerns. Are they just good with money, have secret sources of money we don't know about, or just chill people who don't talk about it publicly? Could be any of the above or something else I haven't thought of.



Which is why you can't compare yourself to other people on this point. You just don't know. Keep your head down and focus on your own finances. Look for advice from neutral resources, not your peers. Their situation is unlikely to be as similar to yours as you might think.

DP, Agreed, for context, as immigrant Asians we have a frugal mentality. Our HHI is 600K, PITI is less than 3K, mid 40's, kids in public school.. ~$3M NW but we still stress about money. I am just the type of person who just stresses about the money. Even if our HHI was a $1M, it's just a personality trait

How do you have PITI under $3k! Do you live in Loudoun County?

DP but PITI of $3.2K and HHI of $400K and $3MM net worth. We refinanced to conforming mortgage that's 2.750% and originally put down 30% many years ago.

[Anonymous]

I feel like we're overextended, if that makes you all feel any better!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

DP, Agreed, for context, as immigrant Asians we have a frugal mentality. Our HHI is 600K, PITI is less than 3K, mid 40's, kids in public school.. ~$3M NW but we still stress about money. I am just the type of person who just stresses about the money. Even if our HHI was a $1M, it's just a personality trait

For 600k HHI and that low PITI, your NW is kind of low.

Ha, you wish. Their HHI a has obviously grown over time.

Don’t care one way or another. Just an observation.

[Anonymous]

Anonymous wrote:It's honestly really hard to gauge how other people are doing financially. There's their income, which you could guess at pretty easily, and their housing costs, which you can also probably guess at pretty easily.

But there are all these other factors. Student loan debt, family money, whether they are needing to support other family members in some way, what kinds of other help they get from family (like grandparents paying for private school, or funding down payments, or maxing out annual gifts), there might be health expenses you can't possibly know about. It can go one way or the other and you just have no idea.

And it's psychological, too. I have some friends who I would assume are very well off -- Big Law partner at a firm where I know what that means in terms of income. They live in a big house in a very pricy neighborhood. But they probably talk about "affording things" more than any of my other friends. They do not take a lot of vacations and the ones they take often aren't particularly extravagant. They do spend money on cars but nothing insane for what I know their income must be. I honestly don't know if maybe they have other expenses that are putting pressure on them, or potentially they are just the sort of people who stress about money a lot. Both grew up UMC but that doesn't mean they didn't grow up without money stress (UMC people can get laid off, their businesses run into rough patches, they have unanticipated medical expenses, etc.).

Meanwhile, we have other friends who might seem overextended from the outside (both of student debt, bought a house even they admitted at the time was more than they could afford, working for government or NGOs where income can never go that high) and they take two foreign vacations a year, always have new everything, and never express any money concerns. Are they just good with money, have secret sources of money we don't know about, or just chill people who don't talk about it publicly? Could be any of the above or something else I haven't thought of.

Which is why you can't compare yourself to other people on this point. You just don't know. Keep your head down and focus on your own finances. Look for advice from neutral resources, not your peers. Their situation is unlikely to be as similar to yours as you might think.

So true. One set of friends the husband is a Fed on the GS scale and the wife is a SAHM. Nice house in expensive area, lots of vacations, expensive activities, no worries about money. Family money on both sides. I don't recommend other single income Feds try this

[Anonymous]

I guess I roll in different circles than you, OP, because I'm not seeing or hearing what you are. Take DCUM with a grain of salt before using it as a reference because there are many regular posters, some sock puppeting and trolls.

[Anonymous]

DH and I are in our early 60s and friends/colleagues are starting to retire. No one is selling their homes or cutting back on their lifestyle. If anything, they are traveling and eating out more. Their adult kids are marrying and starting to buy condos/houses so they also help out there.

[Anonymous]

For all the the people living above their means, there are plenty of people living below their means too with huge savings.

My parents were always in debt and are now struggling in retirement. My husband and I have vowed not to do that and save more than half of our income each year. We'll be situated to retire by age 55 if we choose.

We also do take fancy vacations as our splurge. But we also keep our routine expenses very low and have a 350k mortgage on a 600k HHI, rather than a 2m new build.

[Anonymous]

Anonymous wrote:The rapid rise in housing has/will offset the current set of UMC people living beyond their means. If they've paid off their house while it shot up in value, that's a lot of equity to pull out through a reverse mortgage to keep the money flowing.

We have a ton of equity in our large home. At some point, we will tire of keeping it up with the kids gone and downsize to something we can devote minimal time to running. We should be able to maintain our current lifestyle into our late 90s.

[Anonymous]

Lots of people made a lot of money during the pandemic. Think of everyone who stopped driving, dressing up every day, no trips, no eating out. Almost everyone I know got promoted. That wealth builds on itself and you know once you're a certain level at work, if you lost your job, you'll get another one. House prices went up too in the same time, a lot.

I think the idea of people overextending themselves is a bit of a myth.