The Rolling Jubilee

[Kassel]

Buying the cheaper house allows you to build a contingency fund so you can continue to pay for your modest lifestyle in the event you lose your job. Rule of thumb is to have 6 months worth of expense in the bank or other conservative instruments. As the above poster said the bank can give them a $3k a month mortgage they would be foolish to take it if it leaves nothing to deal with emergency or even general life, $1500 per month is much more manageable and allows you to live and save.

I assume you are trolling as this should be this should be self evident to all,

[vaylorie]

Originally Posted by dredge [You must be logged in to view images. Log in or Register.]

ok, Smart guy.
How much can you "afford" if you lose your job and health insurance and get hospitalized for 3 weeks?

Good thing you got that $250k buried in the back yard

This is what is called... risk. As Kassel mentioned, in order to mitigate this risk, you save 4 or 6 months of expenses in a highly liquid account to be able to access in the event of an emergency. Many people call this their 'emergency fund'. That's probably the most basic and universal starting point for personal finance. Maybe budgeting is more basic...

Unfortunately basic personal finance isn't included in most elementary/high school curriculum. That probably could have helped a considerable number of people not get into the mess that you sadly found your way into. I'm really not trying to be a jackass, there are a ton of people that have just never been educated in basic personal finance.

[Barkingturtle]

Originally Posted by vaylorie [You must be logged in to view images. Log in or Register.]

I'm really not trying to be a jackass, there are a ton of people that have just never been educated in basic personal finance.

Which is why they place their trust in credentialed professionals who they presume have their best interests at heart. Which is how predatory lenders then have that trust to abuse. And then: profit.

You can't really fault someone for the curriculum imposed upon them. You might even feel sympathy for the poor, unwashed masses who are herded through life and milked of their available resources by a complicit culture which appreciates financial gain more than honesty. Of course, you'd have to have empathy for people less educated than you, and that just doesn't make a lot of fiscal sense.

[vaylorie]

Originally Posted by Barkingturtle [You must be logged in to view images. Log in or Register.]

Which is why they place their trust in credentialed professionals who they presume have their best interests at heart. Which is how predatory lenders then have that trust to abuse. And then: profit.

You can't really fault someone for the curriculum imposed upon them. You might even feel sympathy for the poor, unwashed masses who are herded through life and milked of their available resources by a complicit culture which appreciates financial gain more than honesty. Of course, you'd have to have empathy for people less educated than you, and that just doesn't make a lot of fiscal sense.

So what your saying is that ignorance negates responsibility?

[dredge]

having an emergency fund is great, unfortunately not all of us are perfect, some of us are busy juggling 10 things at once all while tossing and turning in bed all night long wondering how they can get their kids some new shoes for school and buy some groceries.

[Barkingturtle]

Originally Posted by vaylorie [You must be logged in to view images. Log in or Register.]

So what your saying is that ignorance negates responsibility?

Uh yeah, I guess, except I always use the correct form of "you're" because my education was evidently superior yours. It's okay, though--I won't use my superiority to take everything you hold dear.

Anyways, responsibility is especially negated when that ignorance is imposed by a plutocracy as a means of suppressing the economic influence of a lower caste.

An example: I worked in the home equity division of a major financial institution in 2008. We identified borrowers with imperfect credit and were more aggressive in our attempts to have them utilize their equity. We encouraged them to make credit card payments and car payments by borrowing against their home. Customers with better credit? We offered them refinancing at even lower rates. Why? Because the borrowers with bad credit were already drowning and before they lost everything we needed to squeeze out some extra profit. We needed more debt to sell upon foreclosure. People with advantageous credit were going to make their payments to term, anyway, and they were less likely to open a revolving line of credit with their home as collateral--so why bother pitching them?

Now maybe it becomes a "chicken and the egg" dilemma but the fact remains the institutions identify the vulnerable and then seek to exploit them further. It is the American way, really.

[Ephirith]

Originally Posted by dredge [You must be logged in to view images. Log in or Register.]

having an emergency fund is great, unfortunately not all of us are perfect, some of us are busy juggling 10 things at once all while tossing and turning in bed all night long wondering how they can get their kids some new shoes for school and buy some groceries.

This is a ridiculous cop-out and a pathetic inability to take responsibility for your life. It doesn't take time or effort to make a smart decision like, say, not spending more money than you have-- just requires discipline. You think people who save their money and make smart financial choices can only do so because nothing else is going on in their lives?

Consider this: had you saved an emergency fund in the first place, you wouldn't be worried about being able to buy shoes or groceries. At some point, you took that shoe/grocery money, and you did something else with it, probably something stupid.

It's human to make mistakes, but to not take responsibility for them is an epidemic behavioral deficiency in this country.

[dredge]

I'm just a man, I'm not perfect.
I hope you guys never have to bite off more than you can swallow.
I hope you never find yourself unemployed with a $1340 a month mortgage, in a city like Detroit where NO one is hiring anything other than minimum wage and there's 2000 resumes for every position.
I hope you never find your $155k home you bought 5 years ago only worth $64k.
I hope you never find yourself without insurance, in the hospital needing a surgery.

Damn, should have had an emergency fund, why didn't I think of that?

[vaylorie]

Originally Posted by dredge [You must be logged in to view images. Log in or Register.]

I'm just a man, I'm not perfect.
I hope you guys never have to bite off more than you can swallow.
I hope you never find yourself unemployed with a $1340 a month mortgage, in a city like Detroit where NO one is hiring anything other than minimum wage and there's 2000 resumes for every position.
I hope you never find your $155k home you bought 5 years ago only worth $64k.
I hope you never find yourself without insurance, in the hospital needing a surgery.

Damn, should have had an emergency fund, why didn't I think of that?

Without a doubt, that is a shitty place to be in and none of this is meant to say that bad shit doesn't happen. The point is that you should be able to look back at the things that you listed and say "Wow, if I would have seriously considered what I was getting into with the house and if I would have had an emergency fund in place, my life would be in a better place right now".

Obviously fiscal responsibility can't solve all problems (i.e. medical), but it could have taken a ton of stress out of your life where it is right now.

In your post on page 1 you said you bought a house you couldn't afford, you racked up credit card debt by going out to each too much and drinking in bars which you paid off with a second mortgage on the house at which point you got ill and hospitalized.

If you really look at that situation and say "somebody else did all of these bad things to me" then good for you but it's simply not true. The illness was likely unavoidable but the other things you did through a series of bad choices.

Again, it sucks, but apart from the illness, it doesn't negate the responsibility for the actions you took.

[Pico]

just a reminder vaylorie is a self admitted tea partier and very likely is obese/missing teeth