Technology

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I lost my job at the start of COVID right after my daughter was born (she was born in March, 2020, so we saw lockdowns come into effect while we were in the hospital).

Again, same. Though for me, it was December of 2019 and a son, and I was laid off in late January. Wild times.

But what I did have was 6-12 months expenses in cash.

We had carved away at our cash reserves building a house that our larger family could actually fit in, and they hadn't built back up yet. It was a calculated risk to do that rather than buy, and I wouldn't have changed the calculation in hindsight, but the one-two-three-four punch of house-child-layoff-pandemic within the span of a few months isn't really something you expect when you're doing the numbers.

That set us back a couple of years, but we were already ahead because we were living below our means. Fast-forward to today and we're back to being ahead because we continued to live below our means.

I'm glad for you. And also: your situation is not normative.

Here's an interesting article about household debt over time, which goes back to 1995 (so almost 30 years). [...] debt got cheaper, so people got more debt.

A couple of things to note:

1. Those numbers end in 2010, which means that they're actually almost as far away from today as the beginning of that study is from the end of that study. A lot has happened in the last 14 years.

2. Those numbers also end right as the country was digging its way out of the 2008 financial crisis, which was largely caused (as I'm sure you recall) by debt mismanagement (specifically subprime mortgages). Those numbers, in and of themselves, are signposts of the very institutional and systemic changes I'm taking about.

3. It's impossible to disentangle the chicken and the egg here. Were people in more debt in 2010 because rates were low? Or were rates low because the economy was burning, largely because more people were in bad debt situations?

So people are in more debt today, but they're paying about the same to service that debt. So people are spending more than they used to, but they're able to do that because borrowing rates are lower.

Actually, the data suggests that private per capita spending in the US has tracked more or less with inflation since at least 1960.

In my experience, people largely paid for things w/ cash 30 years ago, whereas today paying with credit is a lot more common.

My parents used credit in the 90s. We had car payments and a mortgage (and their mortgage rate was in the double digits, no less—but it was still a smaller percentage of their single monthly income than my 2.8% mortgage is today, in a better field, with a second income.

People don't save up to buy things as much, and instead buy now pay later.

Again, the chicken and the egg: do people not save up because they don't want to? Or because they can't? If our car dies, I can't save up to buy another. I have to buy now and pay later.

So the real issue here is discipline, at least for those in the middle class and above.

With your caveat, I'm amenable to entertaining your argument for a significant portion of the population. I just don't recognize it in practice.

being irresponsible with money is easier, which I think encourages more people to do it.

I just don't see the numbers bearing that out. And anecdotally, it might be easier to sign up for a credit card online, but I was getting junk mail about credit cards on the day I turned 18, in 2003. One of my first jobs included trying to pitch a private label grocery store credit card to everyone who walked in. When I got to college (also in 2003), a credit card company had a booth there and was offering students free pizza if you signed up for a credit card. I didn't bite, but there was a substantial line at that booth. So it might be quicker now, but I haven't received a mailer for a credit card in years.

So I do think younger generations (including my own, I'm a millennial)

Me too. I think we might be the same person. This is honestly kind of weirding me out.

[...] are more irresponsible with money and have higher expectations of what that money can buy than previous generations. Over the last 30+ years, real wages have increased consistently (i.e. after taking inflation into account), and we're back to the peak of the early 70s before the stagflation of the 80s. Yet people claim we're getting poorer, so I have to take that as people having unrealistic expectations instead of an income problem.

Housing costs as a factor of monthly income are back up to 2008 Financial Crisis levels, though; and over the last two decades that growth you're talking about has been concentrated largely at the top. The numbers support peoples' assertion that we're getting poorer.

Thanks for chatting with me about this. It's a really interesting topic.

Same. And it’s happened enough that there’s no way I can attribute it solely to bad decision making.

And that's where I disagree.

These people having financial problems haven't had some crazy emergency happen (that I know of), but they do have obvious, expensive hobbies and habits. Some of them use tobacco products (cigs and dip), some collect expensive board games, most eat out a lot, and they drive late model cars. Compared to me, they have fewer kids, live in a similar area, and are often dual-income family (we're single income), so the glaring difference is lifestyle. I also look at other coworkers who are more similar to me (single-income, kids, etc), and they have been able to buy a house.

If I do some back-of-the-napkin math, the spending delta is tens of thousands more vs me. So to me, it's more a question of priorities than means, which would constitute "bad" decision making if they're not meeting their goals.

Same, though I had access to down payment assistance.

An FHA loan only requires 3-5% down, and non-FHA loans can often be as low as 10% with PMI. Houses in my area are pretty expensive now, many running $500-700k for something near-ish to work (mine isn't). At 10%, that's $50-70k, which is a lot, but people in my office should be making six figs, so saving $10-20k/year should be feasible (so 3-5 years saving). But that's a lot harder if you're paying $500+/month on a car payment (or worse, multiple car payments), eating out multiple times per week, and spending hundreds/month on hobbies.

Some of them knowingly made poor choices that led to their current struggles, but more often they were dealt one major blow or a series of minor blows at a time of high risk.

Agreed, and I certainly intend to. The issue is, most people don't like to talk about finances, even with people they know very well. I would love to lend an objective second pair of eyes (completely free) to help spot areas they may have missed in their budgeting.

Here are my plans (please critique/provide more if able):

• volunteer/apply at a charity that does this sort of thing
• build an app that helps with this sort of thing (I'm a SW dev)
• start my own non-profit to do this sort of thing

people who are struggling have never been able to make that choice meaningfully

I'd like to remove the "able" part of this, which is often an excuse. Yes, some people legitimately get stuck in a negative feedback loop, but a lot of people (perhaps most) could make meaningful changes to free up some cash flow. The difference between people who get out of bad situations and those that don't often comes down to discipline, not luck, yet so many people blame luck.

There are some things we could (and should) do as a society to make upward mobility easier (e.g. I'm in favor of something like UBI), but waiting for that is a fool's errand for those currently struggling and they should evaluate things based on their current situation. That means their choices are:

• cut lifestyle to free up cash to break the poverty cycle (hard)
• continue w/o changes

So when posting online, I always assume there's an opportunity to get out, and I go into any discussions with that assumption in mind.

to avoid these in the first place, you’d have to have perfect view of the future.

No, that's a defeatist perspective.

What you need is to learn from your past. Mistakes happen, what matters is what changes you make going forward to avoid those mistakes in the future. For example, let's say your car gets repo'd, the solution isn't to do better at making payments on the next car, the solution is to buy a cheaper car or go without (bus, bike, etc). Cleaning up the mess would probably require some uncomfortable changes, but it is usually possible.

Having a “doo doo plan” is great, if you have multiple options to begin with.

The "doo doo plan" isn't necessarily having a backup job offer, it's just whatever your backup is if the primary plan falls through. A signed offer letter and a start date isn't a job, you only have a job when you actually start. Some ideas:

• negotiate relocation costs - backup: negotiate as an advance on your first paycheck, which doesn't need to be repaid if the job falls through
• commute to that job the first week - maybe you get a hotel, or maybe you can drive there (even if it's super long, like 2+ hours)
• negotiate a contract severance so you get reimbursed if they don't hold up their end of the deal
• continue applying through the first week or two of the new job (i.e. until your first payday)

A legitimate company will never require any form of payment from you for a job, whether that's equipment, uniforms, etc. If you see that, it's a fraudulent job offer.

nobody has ever gotten married truly thinking that they didn’t know their spouse well

Sure, but plenty of people get married while ignoring advice from family and friends. Yes, family and friends can be wrong, but they can also see things you don't. In any case, you can always continue courtship until you're comfortable with the other person.

The tricky thing is that hormones go crazy for the first few weeks and sometimes months of a relationship, and those hormones can blind you to the faults of the other person. Ideally, you marry someone for more than just "love" (however you define that), and you need to be capable of listing personality defects as well as positives so you can decide if there are any deal breakers. You need to assume the other person won't change the flaws you see, and you need to be okay with that. Essentially, approach it like a business contract (i.e. are you getting a fair exchange), but one where both parties currently like each other.

Of my friends, most of those that got divorced did so because of flaws others close to them pointed out, but they ignored, or assumed the other person would fix. One almost got divorced due to a flaw, but they were able to work through it and rescue their marriage. Those that didn't get divorced either got lucky (fairly common) or did their due diligence before getting married. I've had friends and family end a relationship after considering engagement because they decided those flaws would become deal breakers down the line. Unfortunately, most people don't do that, and for some people, it takes multiple failed relationships to figure that out.

In this case, I think he was taken advantage of.

That's certainly possible, and maybe he can seek recourse (lawsuit) depending on what they promised and what they actually delivered.

That said, the thing I think your friend could've done better is to find someone in the business and ask them about the training program. Most of them are complete crap, and a competent FE dev could tell you that you can't just learn to do their job in 6 weeks or whatever. Part of my job position is interviewing and hiring software engineers, and I see a lot of these applicants. Most of the time, their portfolio is only the work they did in that course, and they show zero initiative in exploring beyond it. I'm happy to recommend someone for an internship if they show that initiative (and we have hired a couple that worked out), but so many think completion implies there's a job waiting for them.

I think the problem with my finances lies in historic inflation, a global pandemic, and corporate greed.

Let's look at each of those:

• inflation - essentially resolved, and wage growth is currently outpacing inflation
• pandemic - I lost my job due to it, so I totally understand; but it also created opportunities (remote work)
• corporate greed - has always existed, this isn't new; I don't even think it has meaningfully increased

It can take a while for salaries to adjust to inflation, so hopefully the issues with your finances are resolved, or close to resolving. Mine hasn't yet caught up to inflation, but I think I'll be there this raise season.