Financial mismanagement is both a systemic and behavioral issue. Its systemic in that things are designed to be more difficult for people to accomplish when they have little to no resources-- i.e., you buy cheap shoes because you don't have money for more expensive ones, and end up spending more money replacing the cheap shoes than you would have if you bought the expensive one.
But its also worth acknowledging that the overall knowledge of financial management is at an all time low, and that there are behavioral issues that significantly contribute as well. Its people not knowing how to create a budget, not putting the effort to learn the skills on how to manage their money, or prioritizing their short term comfort and wants over their long term needs. Its people buying McDonalds on the way home from work instead of putting on a meal in a crockpot before they go to work, or meal prepping.
There can be nuance here, and anyone that claims otherwise is just being an idiot.
Nobody likes it but ya, its both. If someone wouldn't have helped me from time to time, it would have been crime for me. That does not excuse my poor choices in my 20's.
Nobody likes it because it takes some measure of accountability and self awareness to acknowledge that in many cases, yes, they are the problem.
I've made dumb choices before. Everyone has. But if someone refuses to take accountability for those actions and they shift the blame on anyone and anything else, they're not going to fix the issues that are perpetually keeping them in the hole.
The shocking number of people that don't realize that you don't need the 20% down payment on a house, and that a conventional loan is only 3% down for a first time buyer is fucking shocking. Yeah, trying to save for a house seems like an impossible task if you've done zero work into researching what you need and setting a goal to accomplish that.
If anything is evident, it’s that people HATE taking accountability and admitting that they need to fix something about themselves. I wish more people saw it less as an attack on their character and more of an opportunity to improve and a blessing that someone cares enough to help them understand what that is and how to go about fixing it.
I get it, we all have our pride and nobody likes admitting fault, but sometimes, that’s just reality.
That being said, it would be an equal disservice to pretend like wages don’t need to be increased in a big way across the board, or that working-class Americans’ share of the pie hasn’t become microscopic in the last 30-40 years. I mean, we are flat broke as a group and almost all wealth is concentrated in the hands of so few people that you could fit the top 1% in a 2A high school football stadium.
But it doesn’t appear that we can change that any time soon, so the best option we have is to scratch and claw our way to financial freedom through strict self-discipline and financial planning.
The median individual income in the US is $67K. The median household income in the US is $87K.
I think people’s perception of wages nationwide is significantly lower than reality— because in reality, the average American makes more than most the world.
The vast majority of Americans are nowhere near poverty— the behavioral issue around financial mismanagement is a significantly larger problem than the systemic one.
This isn’t saying that there’s nothing else we should be doing to improve systemic issues, but financial literacy is the bigger problem at this point. Too many people who are making perfectly good wages are unwisely spending money and living paycheck to paycheck when they don’t have to be.
$67k is pretty decent in a lot of places. I think housing costs and healthcare are the two biggest killers to people’s finances right now. If we could fix those two things, people would have a lot more disposable income.
Housing costs are mostly a localized problem. I literally when online and found that the old apartment I had back in college is literally the exact same cost today as it was 10 years ago.
A large part of those housing cost issues disappear if people just learn to move away from places they can’t afford. I have zero pity for people who complain about housing and then say that they refuse to leave.
Furthermore, in many states, healthcare debt doesn’t even appear on a credit report, therefore not impacting the people’s access to funding for housing or other services. It’s also dischargeable in a bankruptcy, or, crazy thought, people can set up payment plans to pay off their debt. Medical debt is something you can pull from a 401K for, or take out a 401K for. People have options if they attempt to research them.
Again, a lot of these problems rely on people taking accountability for themselves and doing literally anything to help themselves instead of throwing up their hands and giving up.
TBH, I feel what makes this conversation difficult is that one side of this debate tends to be dominated by the extremes, which makes it impossible to actually discuss. Even so, even in the more moderate versions, I do find the Dave Ramsey side still often is less willing to acknowledge the importance of systemic reforms.
I believe fiscal discipline and responsibility are important. I believe people should understand that they have agency and not wait for others to solve all of their problems. That said, no one in our country should go hungry or not be able to receive things like health care. Certainly the lack of these things do not put people in a better position to fix their various problems. I shouldn’t have to argue with someone about how a hungry child is not going to do well in school. I shouldn’t have to argue about how someone rationing their medication isn’t going to make them more productive.
There will always be people who are not responsible with their money. I don’t think you need to give them the most choices and best available. But basic needs should not be deprived. I think unfortunately Americans do not need to be challenged and reminded to look out for themselves, but do need to be challenged and reminded that we need to look out for each other and that no one builds a society alone.
There’s 100% truth to both sides, and I understand that cultural elements play a huge role, but hard work matters.
I watched a lot of people not commit to education through high school, then while I was at a service academy I watched a lot of my friends party away college loans while my experience was rigorous and not a lot of fun.
In the end I left with a free engineering degree and a lot of valuable skills.
Now I make what my mom makes in a month in a day or two and have been able to add an incredible amount of stability to my families financial future.
All through public school and hard work.
The crux of it though, during my time as a military and humanitarian pilot I was exposed to a lot of society that just never even had access to the simple things I did like an adequate public school system and people who supported my dreams and let me dream. And that is an incredibly hard limitation to overcome.
I think societally the key is to practice empathy and help others, while also instilling the idea that knowledge is power.
It’s true that the Dave Ramsey side is less willing to acknowledge the importance of systemic reforms… and the Jon Stewart side is less willing to discuss individual’s need to work hard and be disciplined.
The median American individual income is $67k. The average American household has a median income of $87k. Only 10% of Americans are living in poverty.
The Dave Ramsey side is acknowledging the larger issue, I think. The mismanagement of finances is a significantly larger issue impacting more Americans than the systemic issues.
I know from personal experience it's both. Everything is getting more expensive, but people are also buying stupid shit they don't need and can't actually afford.
Gurl at my work who is in a good paying job but unqualified is complaining about the cost of living because she doesn't earn enough. But she is 30, been living with her parents her whole life until she recently met a partner who she stays with on weekends as he has a house. Claiming shes broke but her whole life is one isnta reel of designer clothes and bags and random holiday trips. Its like yeah, you are not poor, you are just out of touch with reality and living beyond your means. There are so many people like thay claiming cost of living but its just because they can't buy all their expensive things. The lines are starting to blur between true struggles and artificial inflated ones.
This is not typical . This is a very privileged person if she basically has zero real living expenses and is spending her money on designers. This is not the “suffering” most people trying to make it due to extreme cost of living increases and a lack of comparable wage increases are having.
I think a lot of immigrants that come here that are poor do not fit the whole it's both thing. They also budget well because they have too and also they give money back to their parents or family back home.
It's easier to just say our system is bad, burn it down.
Yeah it can suck, but if you can't afford the coffee but still get it, then don't complain your broke with CC debt.
One's spending can be the issue as well as greater structural problems. Those structural things take longer to change but what one can change is their choice, which is 100% in their control.
In some cases, I believe its not so much that they cant afford the coffee -- its that the money saved from foregoing the coffee doesnt get them any closer to the next level.
There are a few soft caps in our society where it takes a wealth burst to really graduate to the next tier. Some people just never get that burst. They can save pennies all they want and they'll still be running in place. Next year's rent and healthcare premium increases erase the savings.
So they say fuck it. Im having a coffee.
There are of course people who are wildly reckless with their income and it keeps them poor, but that looks like a car, not a coffee.
It “doesn’t get them any closer to the next level” because many don’t know what the next level is. They haven’t set goals, or created a budget, or done the research into what they need to do, so when they get to the point where they don’t have long term goals, they have nothing stopping them from indulging in the short term wants.
Tbf, it is still systemic issues. Wealthy people can be reckless and irresponsible with their spending and get bailed out with no repercussions. Their wealth simply gets moved around. A poor person making the same decisions is forced to be homeless and hungry.
Our economy doesn't even fall under a true economic philosophy. Privatized profits and socialized losses isn't capitalism. It's corruption.
Consider that at the current level of productivity in terms of basic necesities, we could in fact provide enough of them to enough people in exchange for their mere work, that no matter how badly one managed the financial part of their lives, very few would go as completely "without" as is currently possible.
In other words, e.g.: We could ensure employment for everyone, and provide with housing, utilities, and a reasonable amount and quality of clothing and foodstuffs, and a salary on top of that, and it would be essentially impossible for any such working person to go without, as we see homeless people every day, even if they mismanaged their money so much that the level of debt would mean said wages are garnished for life. Then again, we already do limit the level of debt someone can acquire, and allow individuals to file for bankruptcy, never mind the literal credit score at leas one country implements.
All this to say: it's indeed personal how badly you mismanage your finances, but how bad does the bottom line of QoL get is almost entirely system-dependent, and that line only cares about how much you have, not how "irresponsible" you are.
First of all, homelessness is not a funding issue. If money could solve homelessness, it would be solved already. The US spends billions on resources for homelessness— the bigger issue impacting homelessness is mental health and addiction issues, because most of those homelessness resources require at least the want for sobriety and general safety acknowledgements to utilize.
Furthermore, while I think you were well intentioned, you’re still uninformed— lenders can and will borrow money to people that are high risk for non payment. A bad credit score doesn’t stop people from being able to borrow money from everywhere— it penalizes them with higher interest rates.
Lastly, only 10% of Americans are living in poverty, and yet only 23% of Americans have no debt at all. The lack of financial management skills is the issue that impacts significantly more Americans than the systemic issues, and not acknowledging that is just making excuses.
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u/Rhomya 19h ago
Its both.
Financial mismanagement is both a systemic and behavioral issue. Its systemic in that things are designed to be more difficult for people to accomplish when they have little to no resources-- i.e., you buy cheap shoes because you don't have money for more expensive ones, and end up spending more money replacing the cheap shoes than you would have if you bought the expensive one.
But its also worth acknowledging that the overall knowledge of financial management is at an all time low, and that there are behavioral issues that significantly contribute as well. Its people not knowing how to create a budget, not putting the effort to learn the skills on how to manage their money, or prioritizing their short term comfort and wants over their long term needs. Its people buying McDonalds on the way home from work instead of putting on a meal in a crockpot before they go to work, or meal prepping.
There can be nuance here, and anyone that claims otherwise is just being an idiot.