Interesting study on American bankruptcy

[Garth Vader]

Originally posted by chegitz guevara


Well, if you'd read the article, you'd have learned that this is not the case. It's not out of control spending that is causing bankruptcy. It is dependency on two-wage earners that is causing it. Most American families are one layoff or one extended illness from bankruptcy.

Although I generally agree with you this was a part I didn't understand.

Going from 2 incomes to 1 due to a layoff or whatever would have to be better than going from 1 to 0 in the old days.

[chequita guevara]

Originally posted by Garth Vader
Although I generally agree with you this was a part I didn't understand.

Going from 2 incomes to 1 due to a layoff or whatever would have to be better than going from 1 to 0 in the old days.

Certainly losing one job when you only have one income is a prolem, however, having two jobs means twice as many chances to lose a job.

Plus, in the '50s to '70s period, when "Dad" lost his job or was laid off, "Mom" could get a part time job which would suppliment "Dad's" unemployment. If one parent loses a job, they don't have anyway to suppliment the unemplyment insurance, providing they can't find a job in their career. Even if they take part time work, that only replaces unemployment, not suppliments it (in Florida, for example $41 a week is not counted against your unemployemt, i.e. if you make $100, $59 is taken from your unemplyment check).

Japher, over spending is when you spend $70 a year when you only make $60K a year. If you spend $100K when you're making $120K, that's not overspending. But if you lose one income, BAM! you're down to $60K with $100K of expenditures. Sure, you can try and lower your expenses, but most people spend the majority of their money on necessary expenses, which means there isn't a lot of wiggle room if you lose a 2nd income.

[Japher]

Well che, I guess that's what happens when you either don't listen to your financial advisor or fail to plan for the future (unseen as it might be)... Yet banckruptcy can fall on single income families through job loss just as easily as to dual income families.

The point of the matter still is that cost of living has inflated because of so many dual income families. The problem is "tied at the hip" so to speak.

All I know is that if I or my wife lost our job we'd be fine because we have, in the last 2 years, put away 6 months of salary (the highest of the two), live off of one salary and splurge with the other, and don't over spend.

Sure, you can try and lower your expenses, but most people spend the majority of their money on necessary expenses, which means there isn't a lot of wiggle room if you lose a 2nd income.

Exactly, what do these people think "necessary expenses" are? Yesterday I was reading "Extrodinary Wealth, Ordinary People" by Edelman (or something like that). The whole book pretty is much the 'secrets' of wealthy people and what they do, did, etc... It is cool because it is mostly quotes from the people he interviewed... One of the quotes in there was something about how this woman had to save every penny, and scrape to get by. That's why she only paid $40 at the Beauty school for her perm instead of $80... Yeah, a perm is a necessity?!

I am sure the BMW, private school, a 4,000 square foot home, a cabin in Tahoe, and an nanny are all necessities to them... No remorse.

[chequita guevara]

Originally posted by Japher
I am sure the BMW, private school, a 4,000 square foot home, a cabin in Tahoe, and an nanny are all necessities to them... No remorse.

Well, far be it from me to stand in the way of your preconceptions.

[Odin]

Che and Oerdin agree on something!

I think the problem is that prices are increacing faster than wages. Housing costs in big cities are through-the-roof too.

[chequita guevara]

Is the cost of buynig a house considered when they're figuring out inflation or is it that everything else has gotten so much cheaper?

[Dinner]

Why are the school districts that are better have more expensive homes in that area?

In most states local schools are paid for by local property taxes thus expensive neighborhoods generate more property taxes and the schools get more money then in lower cost neighborhoods. It's a self reinforcing cycle because once a neighborhood has better schools more people want to live there thus driving up prices and further increasing property tax reciepts.

[Kuciwalker]

Originally posted by chegitz guevara
Well, if you'd read the article, you'd have learned that this is not the case. It's not out of control spending that is causing bankruptcy. It is dependency on two-wage earners that is causing it. Most American families are one layoff or one extended illness from bankruptcy.

So if we only had one person per family working (thus less risk of losing a source of income), then we wouldn't have this problem! Bad feminists getting women jobs

[Imran Siddiqui]

In most states local schools are paid for by local property taxes thus expensive neighborhoods generate more property taxes and the schools get more money then in lower cost neighborhoods. It's a self reinforcing cycle because once a neighborhood has better schools more people want to live there thus driving up prices and further increasing property tax reciepts.

True... a cycle continues where good school district neighborhoods are in VERY high demand and that demand leads to richer people making nicer houses in the area, which increase property taxes, etc.

[chequita guevara]

Originally posted by skywalker
So if we only had one person per family working (thus less risk of losing a source of income), then we wouldn't have this problem! Bad feminists getting women jobs :P

Smartass.

For single earners there's a roughly 10% drop in purchasing power over the past three decades. Doube income families are a necessity, not a luxery, for most families.

[Kuciwalker]

Smartass.

*bows*

[Wittlich]

Originally posted by Oerdin
...The cost of a new four bedroom detached home here in San Diego is between $500,000-$800,000 depending upon how fashionable the area is. If you want to buy a 25 year old home the average price is still $425,000. Even a townhouse (an attached home) will set you back $350,000.

How I wish the realestate prices in The City were as cheap as they are in San Diego!

Of course, since San Francisco is only 7 miles by 7 miles area wise, land itself is a premium to say the least.

My partner and I are planning on buying the house we're in right now. The house was built in the 1920s. It's a 2 bedroom, 1 Bath, Kitchen, Diningroom, and Livingroom with fireplace [first floor]. The house has a single car garage (attached) with a large storage area [ground floor]. Oh and it has a fenced in back yard (which is a novelty in the city). The house needs some attention (painting mainly).

Guess how much this house is appraised at as it, right now?

$450.000.00!

It's just rediculous that you have to spend close to a half of a million dollars for a basic 1,200 sqft hole-in-the-wall home. But what can we do? We will buy the home because we need the tax write-off, and it is an investment.

[Seeker]

Sooner or later these high real estate prices will tumble and the little guy can get his foot in the door (without giving firstborn to the bank)

[Lefty Scaevola]

Originally posted by Seeker
Sooner or later these high real estate prices will tumble and the little guy can get his foot in the door

Do not hold yur breath waiting for a big change. The is some up and down (but not nearly as cyclical as comercial real estate) but thr average slope is steady up and reamin so as long as increasing population demands more of the same supply of land, particualarly with increasing regualtion restricting the supply of land, as well as increasing the costs of development and construction.

[Bosh]

Could be worse. Poor koreans have to pay most of the cost of the house/apartment in a deposit in order the rent the place (monthly rent is then really really low) and then trust the landlord not to lose the money.

So nice having free housing be a job perk.