Are you 'money smart'? And, should we feel badly for people who are not?

Frankly, this couple are very foolish in their lifestyle. They obviously cannot manage their money, yet he is an account executive? That trucking firm needs to get some better help. Even though he is 40, he is gambling on his future in a big way because any number of things can happen to derail his plans. I thought I had things well in hand too... until I became disabled at 47 and went through that economic nightmare of long term zero income. My work insurance covered Long Term Disability but it expired after 2 years, and it was another 18 months before I won my SSA battle. When I see people saying that they can make it on minimum wage or whatever I know it is because they can't manage their money. I lived on nothing more than food stamps and the generosity of my mother and then my wifes mother until things got worked out... otherwise we would have been on the street. Fortunately they both had places for us to stay, one and old trailer and the other an old house... they were cold and drafty, but it was a place to live and we were very glad to have it. The whole "I can't make it" thing is nothing more than a lousy excuse for unwise decisions, and a lack of planning.

We should not feel bad for the people who are not money smart, because they should suffer for their own mistakes when making financial decisions. However, we cannot totally blame the couple, because the living cost is rising everywhere in this world, even I am affected too. In my country, despite the entrance of foreign talents for work and becoming permanent residents, our necessity products and services such as transport, poultries, groceries and others are increasing in prices. My resolution is paid for the things that are necessary and part of the money save it for future. Frankly speaking, it is hard to save money nowadays, whenever I saw my bank account, the withdrawal column has more entries than deposit column. There is nothing I can do except working, working and working for that meager salary and try to save bits by bits. People who have retirement savings should plan how to use it, use lesser credit cards, buy cheaper groceries, use less utilities and try to avoid from getting into bank loans are ways to cut down costs incurred. If people do not cut down on costs, how are they going to survive in the future? In future, I think the salary that we get is insufficient for survival so be prepared for it. You may want to reply get a job which is paying high salary, well it is easier said than done.

This is a really tough question to answer. So many people live beyond their means, or are carrying a large amount of debt (myself included. Sadly I am money smart, yet I am still carrying debt and not saving nearly enough for retirement, because I'm trying to get rid of that debt. I've crunched the numbers, I could be debt free in 3 years if I keep on as I am now. However I need a new car, so I'm probably looking at more like 10 years; since the money I am paying off debt will instead go to a monthly car payment. The middle class is fading. Comapanies are going to part-time jobs for less money since they also don't have to pay out benefits. And soo many jobs are going oversea's thats it's getting very hard to make a decent living. Most people are either at the top (highly educated, professional jobs) or bottom (taking whatever they can get to try and survive) of the ecconomic food chain. The ecconomic stimulus package won't help much, if at all. It is too little money, way too late. Some will blow the money, most (like myself) will pay down debt with it. Sadly the people who need money the most, will get either half of what everyone else gets, or nothing at all. There is another side to this question. I have a relative who is obssessed with being debt free. So much so that he lives like pauper saving tons and tons of money he never plans on spending. Never. You can't take it with you. I think many people are counting on the government to help them when they retire, and plan on dying while carrying a lot of debt. What's it matter to them then? It's like a payback to the greedy corporations squeezing every penny out of us all the while paying us less and less and moving the jobs oversea's so the Executives and stock holders can get filthy rich.

Hello Ladyluna, When I had my construction business, I had and used credit cards. They were paid off monthly or quraterly depending on the card. That is until my EX decided to max a few of them out to the tune of $37,000, when he and his new girlfriend made their exit. It took awhile to pay that off. I cut them up, and will never have another card even though it was not my problem. I have no need for them now. I never did like credit cards. The only other thing I ever bought on a loan was the house, and it burned down. I'm just not big on the lay away plan anymore.lol People today seem to need "instant gratification." They cannot put off the need for a reward until they have saved for it. They want it NOW. We have raised a lot of "gimme" generations. The Government is no help, since they are run on the same premise. They rob Peter to pay Paul and owe everybody money. It will take a long time for this country to climb out of the debt it is in now, if it can before some other country buys us out. We may have to learn Cantonese soon. The worst thing about debt in this country is, that in order to buy a house you have to have debt in order to aquire a loan. No one will lend you the money for a house, unless you have debt in order to prove you have good credit. It used to be a rule of thumb, that you never spent more then 25% of you income on shelter costs. Now people spend 30% or more on shelter costs, and if they also have credit card debt and car loans, how in the world can they make ends meet? It is ludicrous. But that is what is happening, and it is all going to come crashing down soon. Shalom~Adoniah

im a very picky consumer. i seldom splurge. i think never... i'm the type of person who doesn't buy a new pair of socks when i still have a couple old ones. my wife on the other hand, loves shopping. i don't have a problem with it. we're just completely different when it comes to spending. i would like to say that i'm considerately practical. but i'm very forgiving about my mother and my wife being such an avid fan of shopping. i let them... besides, they are the reason why im working my a*$ out... LOL

I was cursed with a mother that lives on credit. Or lives for it. Not sure which. Her and step father make really good money, yet she insists of using credit whenever they shop and she rarely pays off the balances. She thinks nothing of dropping money and gifts on friends and family. (Not that there's anything wrong with her generosity, mind you. It just shouldn't be put on credit.) Anyway, I had to learn the hard way that if you can't afford it, but have the credit, don't buy it. I try very hard to live within our means. For the most part, I'm frugal to the point of being cheap...in some areas. My husband is not so good with money and his mother is an absolute nightmare with it. I handle the finances, but I have to keep a close check on him because if he sees something he likes in a store... Like when we grocery shop. Yeah, that magazine may only be $7, but when you're buying two magazines each time we shop, it adds up. Still, through our efforts and struggles, we've still managed to buy our dream farm and have a low mortgage on it, have our truck with a small payment, and have our horses. I'm a stay at home mom and if something were to happen to my husband and he couldn't work, we could make it on my income if I went back into retail. Now, our problem, should no major injuries or job losses occur, would be retirement. We have nothing going for us in that department. We both know we need to do something, but it's hard to work something like out when we live paycheck to paycheck. I feel no sympathy for that California couple. They have the money to live decent lives, but they squandered it by trying to live out of their means. This is happening all too often these days. I think it becomes a problem for the whole of society when things get so bad that the government has to step in. As with the mortgage market. Maybe it sounds cruel of me, but I knew at 19 that you don't buy a house with an adjustable rate mortgage. I have no sympathy for these people dealing their mortgage payments ballooning because they went with an ARM instead of a fixed rate. Now everyone is going to be forced to deal with their mistakes. Mortgage companies are going to be more stringent. The government may offer assistance at the cost of taxpayers to bail these people out. Sorry but no. If I defaulted on my loan, it would be shame on me. It should be that way for them.

I do live within my means. So, much so that I have more time to do as I please than anyone I know. Anyone can do this. The first thing to do is to learn to disregard the opinions of others when it comes to things important to yourself. You'd be surprised how few people can do this, but really, anyone can and should. Therefore, it is difficult for me to feel sorry for that California couple. They made their decisions. They can live with them.

I made my choice not to use credit cards at all. I only use what I have and I always save money for later. I limited my spending to minimum to make sure I have money for basic bills and food.... I know people who have huge debt on all credit cards, maybe they think about job as permanent security.

I guess I am guilty on that. I am not money smart. I don't have any savings as well but I have reasons. I work full time but my husband doesn't so I pay all the bills and feed and raise my family. I have 5 kids by the way. I recently bought a second hand car because I am so tired of commuting and walking to and fro so that comes out of a loan. Then I have 2 credit cards that has 0 balance on it. Then at work I owe 3 people a huge amount of money. I also have a maid because I have a back problem and I cannot carry on working and doing housework. And with that back problem I need to go to the gym too so that needs pay as well. We are a poor country and we don't get much benefits from the government. We own the house though and don't pay for it. But I pay for electric, water, gas, internet, tuitions, groceries and whatever else there is to pay. I will soon save once I have paid off some of my bills.

I think what comes around goes around. It is natural to want more than one can afford, whether one is as poor as a church mouse or a multi-millionaire just trying to complete with her fellow jet-setters. What is not natural is to gamble with the safety and security of one's family. But when one recklessly spends beyond one's means it is a mistake that is going to end up hurting someone and break trust and complicate life for everyone involved. Almost everyone has been in a situation at one time or another when they have had to borrow to get out of a financial scrape. Most people require the assistance of a mortgage in order to be able to afford home ownership. But instead of buying the fanciest home on the block, a sensible person buys sensibly, and understands that market conditions are subject to fluctuation. A sensible person endeavors to make mortgage prepayments to principle to cut down on the interest paid rather than borrowing more against the equity. If enough people gamble with their most important lifetime investments, and gamble foolishly, and lose, our nation's economy collapses, plain and simple. In this way a few can bring down many. We all lose. So failing to manage one's money is in my view an act of aggression, not merely a callous attempt to use one's fellow for one's own possible benefit.

It has taken us a while, but we now live within our means, this is only because of a scare we had with a credit card and a large overdraft. The only debt we have now is our mortgage which is about a quarter of our income so is not too bad. We now save as much of our disposable income as we can to get the things we want. It is not as hard as I thought living like this, I am finding more ways to cut down on what I spend so I can save more and I am finding more ways to just earn a few extra pounds here and there. Its actually a challenge to me now each month to scrape away as much as I can so I dont mind. It beats having to worry how I am going to find the money to pay a credit card bill or catalogue or store card bill and it is satisfying knowing that the things we do buy are paid for straight out rather than borrowing.

After immigrating to the the US, we made the same mistakes as others - buying things on credit. We never did this before, but we thought this was the "American way." So we did what Americans did, and got into debt. Bad mistake. We learned our lessons the hard way and no longer believe the hype of TV commercials. So we paid off our debts and now try to live within our means. I feel sorry for those, who like me, made mistakes due to ignorance. But that shouldn't be the case now, since a lot of easily accessible info exists on the Internet on how to manage your finances properly. I don't feel sorry for those who should know better, but continue to get into debt, just to impress or show off to others how "successful" they are from the cars, clothes, jewelry, or houses they buy.