Other people's facepalm financial management
Discussion
Ozzie Osmond said:
Without getting into a yes/no argument, one has to accept that the people at the bottom - the low paid workers - are "adding value" to the system.
Yes adding value, but not adding 'net' value.Ozzie Osmond said:
If that wasn't the case the economy would shrink, not grow, and there wouldn't be any socialists. It makes no difference where the people at the bottom come from so long as they do enough work for not too much money. The problem is people who live on the state and add no value at all. State pensioners, unemployed, etc - we have to provide 100% of every penny they ever spend and every service they ever use.
See above.sidicks said:
Sorry, my previous post may have been unclear.
I believe that the current contributions (employee plus employer) should fund the benefits being accrued by those members.
Even for unfunded schemes? Or are you saying that you don't agree with unfunded schemes?I believe that the current contributions (employee plus employer) should fund the benefits being accrued by those members.
You could argue that the government does fund the benefits, but as they arise.
Edited by CarlosFandango11 on Sunday 12th June 17:27
Partners parents certainly fit this thread.
As far as I can tell, they've been in huge credit card debt many times, for reasons mentioned in this thread, endless spending on crap, magazines, gym memberships, meals out that followed every trip or any family event (usually the bill was well into the hundreds, not once did I see a reward card or a current account pay), brand new car for a 3 mile round trip to work (no, really, its actually done 3x260 miles per year), complete refit of the house and building work etc - now as far as I can tell, they have been saved by rapidly rising property prices, and about 3 separate inheritances that have paid off the credit cards each time. I've learned that just the other week they have re-mortgaged again (both around 60 now) for some unbeknown reason.
I literally cannot fathom what they are thinking, the house probably worth towards 1 million, and bought for low hundreds years ago, they should be mortgage free and in a fantastic position having both been working and (I should hope) paying into pensions, obviously they got lucky with property (and obviously refuse to accept they did) but instead of having 1 mill cash ready to downsize with and a decent pension coming in, I would imagine they're going to end up with a few hundred k at best which is not going to buy much down on the coast where they want to retire, and probably will be working for another 5-10 years anyway when they could be retired right now - I shouldn't care, but whenever we mention what we may or may not be doing because we are trying to save a few quid we get called tight - hilarious attitude to money.
Its become unbearable to go out with them (well, he is fine...) because its come to light what Mrs earns (much more than either of her parents) and there are comments such as "xxxx will pay for this, she earns the most money" - total cringe.
In a way I kind of think everyone probably needs to feel the uncomfortable feeling of growing, expensive debt at some point for them to have a handle on how it works and where things can be trimmed to save. I said to them that if they stopped paying £120 a month for a gym neither go to, stopped subscribing to Good Housekeeping, buying the daily mail, having veg boxes delivered AND then doing daily shops, have a car that does 3 miles a day, spending far too much on birthdays and xmas, they probably would be well over £10k better off each year - the worst part of all this? Husband is an accountant. Prat.
As far as I can tell, they've been in huge credit card debt many times, for reasons mentioned in this thread, endless spending on crap, magazines, gym memberships, meals out that followed every trip or any family event (usually the bill was well into the hundreds, not once did I see a reward card or a current account pay), brand new car for a 3 mile round trip to work (no, really, its actually done 3x260 miles per year), complete refit of the house and building work etc - now as far as I can tell, they have been saved by rapidly rising property prices, and about 3 separate inheritances that have paid off the credit cards each time. I've learned that just the other week they have re-mortgaged again (both around 60 now) for some unbeknown reason.
I literally cannot fathom what they are thinking, the house probably worth towards 1 million, and bought for low hundreds years ago, they should be mortgage free and in a fantastic position having both been working and (I should hope) paying into pensions, obviously they got lucky with property (and obviously refuse to accept they did) but instead of having 1 mill cash ready to downsize with and a decent pension coming in, I would imagine they're going to end up with a few hundred k at best which is not going to buy much down on the coast where they want to retire, and probably will be working for another 5-10 years anyway when they could be retired right now - I shouldn't care, but whenever we mention what we may or may not be doing because we are trying to save a few quid we get called tight - hilarious attitude to money.
Its become unbearable to go out with them (well, he is fine...) because its come to light what Mrs earns (much more than either of her parents) and there are comments such as "xxxx will pay for this, she earns the most money" - total cringe.
In a way I kind of think everyone probably needs to feel the uncomfortable feeling of growing, expensive debt at some point for them to have a handle on how it works and where things can be trimmed to save. I said to them that if they stopped paying £120 a month for a gym neither go to, stopped subscribing to Good Housekeeping, buying the daily mail, having veg boxes delivered AND then doing daily shops, have a car that does 3 miles a day, spending far too much on birthdays and xmas, they probably would be well over £10k better off each year - the worst part of all this? Husband is an accountant. Prat.
CarlosFandango11 said:
Even for unfunded schemes? Or are you saying that you don't agree with unfunded schemes?
It makes sense for the government to run an unfunded scheme - that doesn't mean it is appropriate for the government to hide the true cost of that unfunded scheme by pretending that the stated 'employer' contributions (when combined with the employee contributions) will be sufficient to meet the promised benefits under a credible / fair investment return.Currently this is not the case, which leads to a misleading allocation of public spending e.g. (Fictional numbers for illustration only) the published cost of the NHS might be £120bn, which includes (say £12bn of employer pension contributions), whereas in actual fact the real cost might be £130bn, which includes employer contributions of £22bn).
Well I've just read through all of this thread (it was linked on another one earlier, hence the resurrection)
I have no specific story myself but whilst I'm no financial guru I have heard many a surprising comments about work colleagues plans for pension etc
I think many people these days are holding out for the inheritance of their parents houses.
My parents have considered selling their house and downsizing to a cottage (two of them in a fairly large 4 bedroom semi, so no real need for all the space), my mum went through a double mastectomy 2 years ago due to cancer and I think that opened their eyes up regarding enjoying life and finding the balance between saving and spending although they're both toward the end of their working life now so there's more flexibility than if they were younger.
They took money from their savings and bought a motorhome, they spend most weekend away and then driving in Europe (they still fly more than drive though)
I'm from South Wales so obviously the average yearly earnings for workers here is considerably lower which probably means very few save and just expect the government not to leave them in poverty when they retired.
Just to the poster below, do you mind me asking how your situation panned out as we're just over two years down the line?
Your focus to repay debt is admirable so I hope things have worked out well for you.
I have no specific story myself but whilst I'm no financial guru I have heard many a surprising comments about work colleagues plans for pension etc
I think many people these days are holding out for the inheritance of their parents houses.
My parents have considered selling their house and downsizing to a cottage (two of them in a fairly large 4 bedroom semi, so no real need for all the space), my mum went through a double mastectomy 2 years ago due to cancer and I think that opened their eyes up regarding enjoying life and finding the balance between saving and spending although they're both toward the end of their working life now so there's more flexibility than if they were younger.
They took money from their savings and bought a motorhome, they spend most weekend away and then driving in Europe (they still fly more than drive though)
I'm from South Wales so obviously the average yearly earnings for workers here is considerably lower which probably means very few save and just expect the government not to leave them in poverty when they retired.
Just to the poster below, do you mind me asking how your situation panned out as we're just over two years down the line?
Your focus to repay debt is admirable so I hope things have worked out well for you.
Pieman68 said:
Have seen both sides of the coin, so to speak
Five years ago I was on the verge of having to declare myself bankrupt due to having to service debts built up within a marriage. She buggered off and left me with the lot (as she very cleverly made sure all of the debt was in my name)
I worked both full and part time for the next 3 years merely meeting minimum (and sometimes reduced) payments. House in negative equity as well. Whilst many told me simply to go bankrupt and walk away I felt that morally, having had the money and being a part of spending it, it was a legalized form of theft. Others I know were not so scrupulous and have written off their debt before building up a load more
Eventually I met someone new (with her own issues left by her ex husband) and we have slowly but surely worked on it together but are both considerably more financially astute and careful. I was promoted to a completely new level of earnings last year and use my commission/quarterly bonuses to smash debts as quickly as possible. Her mum passed away last year and left her a bit so we both got newer cars (about £3k each) and the rest has been put away
We are looking to buy a house in the next 6 months (after a low budget wedding) and then I intend to be debt free in the next 2 years apart from the mortgage, and never to go back there again. I am also paying a little extra into my pension and intend to up this accordingly as other outgoings decrease
It's not always an individuals sole fault is the point that I try to make
Five years ago I was on the verge of having to declare myself bankrupt due to having to service debts built up within a marriage. She buggered off and left me with the lot (as she very cleverly made sure all of the debt was in my name)
I worked both full and part time for the next 3 years merely meeting minimum (and sometimes reduced) payments. House in negative equity as well. Whilst many told me simply to go bankrupt and walk away I felt that morally, having had the money and being a part of spending it, it was a legalized form of theft. Others I know were not so scrupulous and have written off their debt before building up a load more
Eventually I met someone new (with her own issues left by her ex husband) and we have slowly but surely worked on it together but are both considerably more financially astute and careful. I was promoted to a completely new level of earnings last year and use my commission/quarterly bonuses to smash debts as quickly as possible. Her mum passed away last year and left her a bit so we both got newer cars (about £3k each) and the rest has been put away
We are looking to buy a house in the next 6 months (after a low budget wedding) and then I intend to be debt free in the next 2 years apart from the mortgage, and never to go back there again. I am also paying a little extra into my pension and intend to up this accordingly as other outgoings decrease
It's not always an individuals sole fault is the point that I try to make
Whenever I hear of people in their 60s who still have mortgages. Usually they bought their house for peanuts, yet a lifetime of living above their means has led to them continually running up debt and using the equity in the property to continually remortgage and pay of their debt. Rinse and repeat.
I know a couple who once had a nice house and inherited another one but are now living in a one bedroom flat. Again they have continually run up debt then sold and downsized to a smaller house. The thing is they have nothing to actually show for the money they spent it was all just frittered away.
A guy I used to work with who bought a new Diesel Ford Focus every three years as he couldn't be bothered with the inconvenience of taking it for an MOT.
The youngsters at my work who are in their early 20's but always have the latest iPhone and a leased Mercedes A Class. One guy still had his leased Clio on the drive that he was still paying for as he couldn't wait for the lease to end before getting the A Class.
Another guy in his early 40s who has over £30k of debt on credit cards. His parents took out a loan to pay it off for him last time but he has just run it up again. He is paying £1k a month but hardly clearing any of the capital.
I know a couple who once had a nice house and inherited another one but are now living in a one bedroom flat. Again they have continually run up debt then sold and downsized to a smaller house. The thing is they have nothing to actually show for the money they spent it was all just frittered away.
A guy I used to work with who bought a new Diesel Ford Focus every three years as he couldn't be bothered with the inconvenience of taking it for an MOT.
The youngsters at my work who are in their early 20's but always have the latest iPhone and a leased Mercedes A Class. One guy still had his leased Clio on the drive that he was still paying for as he couldn't wait for the lease to end before getting the A Class.
Another guy in his early 40s who has over £30k of debt on credit cards. His parents took out a loan to pay it off for him last time but he has just run it up again. He is paying £1k a month but hardly clearing any of the capital.
Joey Deacon said:
Whenever I hear of people in their 60s who still have mortgages. Usually, they bought their house for peanuts, yet a lifetime of living above their means has led to them continually running up debt and using the equity in the property to continually remortgage and pay of their debt. Rinse and repeat.
Friends of the family in their 60s decided to move from the east midlands to the south-west so they could be closer to my in-laws. They had a good 4-bed townhouse and the mortgage was nearly done. They've since moved and now live in a pokey 2 up 2 down house, which has cost a third more than the spacious house they live in. They've since decided that their new house is a bit small and are now in the process of emptying their ISAs to pay for an extension. In the meantime, they were essentially retired but were fostering for extra money. They since decided they didn't want to continue fostering (because funnily enough, it's a fairly challenging role due to the nature of the clients) and now work pokey jobs to pay off a mortgage in their mid to late 60s with no end in sight.
I can only stand by and simply learn from their mistakes - never want to be in their position.
Downward said:
since I joined in 1998 pension age has changed from 60 to 65 now SPA to get full pension so not that attractive...There must be quite a big cohort of middle earners for whom it’s marginal at best to fund a private pension. Everything is moving towards means testing, so in twenty years middle-earners may well find that they have foregone all sorts of p,erasures for decades to end up no better off than had they squandered the lot.
If you are a higher earner then the loss of the state pension to means testing would be annoying, but not enough to stop making your own provision, but if you are on £30k a year, is putting £2-3k away definitely going to improve life in retirement?
If you are a higher earner then the loss of the state pension to means testing would be annoying, but not enough to stop making your own provision, but if you are on £30k a year, is putting £2-3k away definitely going to improve life in retirement?
James_B said:
There must be quite a big cohort of middle earners for whom it’s marginal at best to fund a private pension. Everything is moving towards means testing, so in twenty years middle-earners may well find that they have foregone all sorts of p,erasures for decades to end up no better off than had they squandered the lot.
If you are a higher earner then the loss of the state pension to means testing would be annoying, but not enough to stop making your own provision, but if you are on £30k a year, is putting £2-3k away definitely going to improve life in retirement?
It might not help, but personally I'd rather put it into my pension rather than find out the hard way!If you are a higher earner then the loss of the state pension to means testing would be annoying, but not enough to stop making your own provision, but if you are on £30k a year, is putting £2-3k away definitely going to improve life in retirement?
That's just me though - I spend bugger all anyway so there's plenty left over to stash in pensions and savings
ZOLLAR said:
I think many people these days are holding out for the inheritance of their parents houses.
Which is a really, really stupid thing to do.I know someone pushing 60 who did that. Moved into his 'inheritance' when his mum went into a care home. The only problem was the elderly mother ended up living for years and once savings were depleted they/the council wanted her house (the inheritance). He had no other money, and so ultimately the house is gone and he's had to go bankrupt. And he had to borrow the £250 even to do that.
A series of very poor decisions and a misplaced sense of entitlement and now he sleeps on his daughter's couch.
Jimmy Recard said:
It might not help, but personally I'd rather put it into my pension rather than find out the hard way!
That's just me though - I spend bugger all anyway so there's plenty left over to stash in pensions and savings
Which is really commendable, and that is not sarcasm, to be clear.That's just me though - I spend bugger all anyway so there's plenty left over to stash in pensions and savings
Planning to inherit is an unwise thing to do. I have seen some really amazing mistakes in that regard.
(1) I had a neighbour who was heir to a wealthy individual who had extensive cigar interests abroad. His company was nationalized but he was still pretty well heeled. He remarried, and for tax reasons he transferred the remaining assets to the new wife.He died, Widow committed suicide and left the entire fortune to her own kids leaving nothing to my neighbour.
(2) My mother in law is reasonably well off but is an Alzheimer's patient in a very expensive and excellent care facility in the US. $7500 a month. It will absorb a lot of her money if she lives another ten years. ( which she may). I am very happy she can do this, but members of the family who might plan for an inheritance are not going to the thrilled. A huge item these days is that people are living much longer.
(3) It creates a huge distortion for someone of (say ) 40 to plan on money dropping from the trees like this. Say you are laid off/disabled/fired at 55?...the inheritance might not be for another 15 years.
I made plenty of boneheaded moves in my twenties, running up too much consumer debt and ending up maxed out on credit cards. Two years of living like a monk to get back on my feet and pay it all off was a painful lesson, and I vowed never to get into debt again. I did take one car loan, and one mortgage after that and paid them off quickly. Since then I have never bought anything on credit.
Air least if the whole place goes to hell I will not end up with debt service I cannot discharge.
(1) I had a neighbour who was heir to a wealthy individual who had extensive cigar interests abroad. His company was nationalized but he was still pretty well heeled. He remarried, and for tax reasons he transferred the remaining assets to the new wife.He died, Widow committed suicide and left the entire fortune to her own kids leaving nothing to my neighbour.
(2) My mother in law is reasonably well off but is an Alzheimer's patient in a very expensive and excellent care facility in the US. $7500 a month. It will absorb a lot of her money if she lives another ten years. ( which she may). I am very happy she can do this, but members of the family who might plan for an inheritance are not going to the thrilled. A huge item these days is that people are living much longer.
(3) It creates a huge distortion for someone of (say ) 40 to plan on money dropping from the trees like this. Say you are laid off/disabled/fired at 55?...the inheritance might not be for another 15 years.
I made plenty of boneheaded moves in my twenties, running up too much consumer debt and ending up maxed out on credit cards. Two years of living like a monk to get back on my feet and pay it all off was a painful lesson, and I vowed never to get into debt again. I did take one car loan, and one mortgage after that and paid them off quickly. Since then I have never bought anything on credit.
Air least if the whole place goes to hell I will not end up with debt service I cannot discharge.
Gassing Station | Finance | Top of Page | What's New | My Stuff