[DiffEq]

Perhaps it could start with, yeah I don't need that unreasonable brand new car with a 72 month payment plan, or I can take these college courses for 1/10 the cost at a community college rather than a more unreasonable expensive school, or I don't need that unreasonable 5500 square foot McMansion in that fancy neighborhood, or I don't need that unreasonable 10th pair of jeans, that unreasonable new iphone, etc. People bury themselves with debt - and not because they can't do math, but because they DON'T. Instead they make impulsive, emotional decisions. Hardly anything good ever comes from them. Unreasonable bills usually come from unreasonable decisions (Medical bills being an obvious exception).

[rangeofmotion]

I can understand this sentiment. And it certainly applies to some people. But honestly I don't think the majority of people struggling are driving fancy cars or living in McMansions. Most of the people I personally know (which is a lot of people) drive an average car, live in an average home or condo, and don't live lavish lives. Most are just saddled with some combination of common factors like high cost of housing, student loans, unexpected medical bills, etc. The majority of people are just trying to live average lives but are constantly having to walk a tightrope for just that.

[jjeaff]

What's your definition of average? Because a $30k Mazda should not be average. It's way too expensive for most people. Also, you probably don't need one for each member of the family.

A 3,500 sq ft house with granite countertops and hardwood flooring for 4 people should probably not be average either.

With the exception of a few markets with very expensive land, we have a consumption problem. We have a keeping up with the Jones problem.

You don't have nearly as much worry about losing your home if you spend below your means.

[rangeofmotion]

I have spent a lot of time with a lot of families from wildly varied economic backgrounds. I'm not talking about people with brand new cars and 3,500 square foot houses (that would be a McMansion, I believe). I'm talking about Hondas and weather-worn Dodge pickups parked at a condo or a very modest house in a working class neighborhood.

Sure, the keeping up with the Jones thing is happening with a lot of people. But that does not appear to be the bulk of the problem. Heck, just drive through the country and tell me if you spot more McMansions or more McShacks.

[chrshawkes]

I feel my 3300 sq ft house for me, 2 kids and a dog is reasonable. Even townhouses these days are huge. I consider McMansions to be excess of 4000 sq ft.

[jjeaff]

3300 is above average. For what it's worth, wikipedia says more than 3,000 sq ft and has a citation. https://en.wikipedia.org/wiki/McMansion

But there are other criteria as well.

[gfs78]

But then, are some of these things really needed? I don't have a car, I have a basic smartphone, and old basic laptop, not much in terms of clothes, and I don't travel abroad for holidays (all this because I cannot afford something better without getting into debt) and I get by fine (and I'm 40). Most millenials have at least a car (even a cheap one) or nice phones with nice data plans, or clothes, or travel to nice places at least once a year. Most of their debt is self-chosen.

[bobthepanda]

Most Americans do not live in areas where you could reasonably live without a car, and transit-rich, walkable areas have much higher rents.

[gfs78]

Would you mind putting in concrete examples the sentence "most Americans do not live in areas where you could reasonably live without a car". It's not a critique, I'm not american so I don't understand how could this be, given the level of development of the country and the proliferation of cities that you are supposed to have.

[UncleMeat]

Surely you'd agree that there are people who are struggling financially that don't have a lease on a $40,000 car and a mortgage on a 6BR home.

"Just don't buy expensive shit" isn't an option when rent is increasing faster than wages.

[leetcrew]

keep in mind, DiffEq is responding to a post that mentions people making six figures who are struggling to keep their homes.

there are certainly a lot of people out there who would be feeling the squeeze anywhere, but if you're making six figures and you're in danger of losing your home, you are probably doing something wrong. your house is too big, you live in the wrong place, or both.

right now I'm living pretty comfortably spending <$30k a year. I understand salaries and COL vary in different places, but most people who make six figures in an expensive area could certainly take a more humble job in a less expensive region and live a fine life.

[empath75]

The people loaning them money bear some responsibility, also. If it’s obvious to you that it’s a bad loan it should be even more obvious to the bank, but they shield themselves from their poor decision making by wrapping the debt into instruments that they unload onto some other poor sucker.

[leetcrew]

certainly the banks fail to do their due diligence on a lot of these loans, but in some cases they are actually required by the government to issue them, even if it goes against their better judgment.