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financial lives of friends

January 10th, 2010 at 12:40 am

I went to a friends place last night to catch up with a group I don't see often. I have known most of them for around 2 years, and one girl I have only met twice.

After a few drinks were consumed (by others - I wasn't drinking) the subject got around to debt. Since we are all in the same age group (22-25) it was interesting to hear everyones financial situations, as it's usually not something so openly talked about. And well, didn't I get a shock?

I already am aware of one friends financial situation. She got into a lot of credit card debt ($30k) at 19 and signed a debt agreement to pay it back. She is at around $17k now and will have it paid off in 3 years. Most importantly, she hasn't gotten herself into any other debt and I have to say she's doing quite well - I've been around to watch her change her financial viewpoint and hopefully I have helped her a bit here and there.

As for the others, I am just in shock. I guess because my other group of friends is responsible with money (and in their late 20's or early 30's), I just assumed that these girls would be too. Besides, they're only in their early twenties!

One has two maxed out credit cards ($6k) and a large personal loan ($9k)- and is unemployed.

Another girl, along with the father of their two children, has a mortgage (that's actually more than the house is worth) of $335k, a personal loan FOR THE DEPOSIT that her and her partner put down on the house ($20k), two loans for two brand new cars (~$40k)and three maxed out credit cards (totalling ~$30k). The sad story is that they have just split up too - she does not work and is now living with her mum and has decided to do an advanced diploma in nutrition - the father is an electrician.

And the last girl has two nearly maxed credit cards ($7k), a personal loan ($5k) and a car loan (~$11k).

Except for the girl with the mortgage, the others have no assets at all except for their cars.

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AND!!! when we went out, we had to find an ATM for two of the girls that would do cash out on credit cards (cash advances) - as the first two ATMs wouldn't allow it. Their reasons for getting cash on credit?

'Oh, I'm broke til pay-day... Wednesday.'

said with a kind of shrug and a smile on their faces.

Huh? Why are you even coming OUT tonight???

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I just don't understand all this. I've seen it all before here, but it's different because they talk about it as though it's normal, like it's a fact of life or something, and it doesn't seem to bother them. WHAT?! Atleast reading people's blogs here, you get the general idea that everyone is not so happy with their financial situation and are taking steps to change it. It seems like with these girls, they don't have any desire to change, and it's some kind of competition to see who owes the most.

(After much prodding, I finally told them our shared mortgage debt ($297k-ish) and personal loan of $2k. Their response was 'yeah, but how much do you owe on your credit cards...?'. When I said we had 3 credit cards but no credit card debt I was met with a confused look Big Grin )

*sigh*

4 Responses to “financial lives of friends”

  1. Hai Says:

    Is it wrong that I love to read stories like these? I certainly done mean that I love to hear about people in debt, but I find it so interesting to learn how others are with their financial habits. I would never ask about the financial life of a friend, but if someone offers... I'll certainly listen.

  2. monkeymama Says:

    I totally identify.

    It's too much "Boy who cried wolf" where I live. Not only do I meet these people, but they assume anyone who is doing well has handouts from their parents, etc., etc. (If I had a dollar for everyone said, "But yeah, my parents did pay for my college or help me financially." So, mine did? This decision is based on, the fact I do okay financially? Oy vey! (I actually worked through college and paid for it myself. My parents don't hand me much. My dh is another story, BUT the little help he has gotten - few thousand here and there - does not equate financial freedom, in itself. In fact, most of my friends have had decent inheritances).

    It gets better. I had a pile of acquaintances (young mothers) who were so bad off financially. Okay, so I can be a little sympathetic. Then they start turning to me for tax and financial advice. Turns out people I had felt sorry for and had maybe treated lunch to or bought a nice gift for, ALL made 2-3 times my income. It was just unreal - and a real eye opener for me. Because of my job title people would say I didn't identify because I "made so much." Though, young in my career I realized I made squat compared to the masses of uneducated people I knew, in sales. Good incomes. I think these people would be even more confused if they knew the truth - that I was supporting my family easily on $50k while they couldn't make ends meet on $125k.

    So now, if someone whines to me about their finances, I tend to just roll my eyes. I am sure I will someday meet someone in true dire straits and come across as unsympathetic. But with age and time, it just gets old...

  3. ceejay74 Says:

    Yeah...hrm...5-8 years ago I was one of those people, unfortunately...To look at my debt balance you'd think I still was. Frown
    I knew these two frugal girls back in the day but they were really stingy, always grumbling about money and how much things cost and how they wished they got paid a lot more, so they weren't very good role models. They were like the only people who talked about money, so I had no idea what was normal. I had a feeling though, that we were doing much worse than most people, but I just couldn't figure out how to fix it!

    Sometimes I would try to convince myself that everyone had similar problems, but most of the time I was worried and felt that we were lagging behind other people. But if someone asked me, I might try to act nonchalant like your friends do, as a defensive mechanism.

    Since then I've learned about other people's situations through TV shows and online forums, and I can say we were worse off than most people...the only thing that made us different from people on our level of debt was that most people in as bad a debt as us had defaulted, declared bankruptcy or lagged behind on their debts, whereas my fancy footwork kept us current for years, despite the crazy amounts of debt we were racking up.

    I feel sympathy for your friends, a bit, because who knows what's really going on in their heads? However, I'm 99% sure you couldn't help them; it was something I had to work out on my own. Plus they are solidly in the denial phase, and some of them may stay there their entire lives.

    I understand them somewhat, but I don't know if I'm doing a good job helping you see why they're like that. Debt is like an addiction or any other isolating condition, in that you fall in gradually, and eventually your addict's world starts to feel normal to you, and other people's world is the alien one. And then you find other people who are in your similar condition and it helps you feel even more normal. The more normal it feels the harder it is to make that big decision to force a drastic change in your life.

  4. dmontngrey Says:

    I too have been hardened by those around me, mostly my mother. The concept of credit escapes her. She thinks "Oh, I'll just put it on my card to pay later." Only, she never does. She's on round two of having a charge card for the store she works at. The first one was charged off. I spent two years building up her credit and those idiots thought it was a good idea to give her another account? The years inbetween, she charged up MY card twice and I paid it off. Now I sit back and watch as she spirals down financially. It's like watching a train wreck - it's about to get much worse for her. I'm the bad guy when friends find out. "But that's your MOTHER!" So? She didn't even want to try and learn, what can I do? As for friends? I have one friend who was out of work for a year and a half. She nearly lost her house. Eating out, vacations, etc, never stopped. I hardly eat out. I don't get to go on a "real" vacation. I can't "afford" it since I'm putting debt payoff a priority. Most of my debt is student loan debt since I didn't know better back then. "Sign here" and I still got to go to class. I never knew what I was signing until it was too late. I know better now, I'm just paying dearly for it. I'm with monkeymama here: no sympathy at all for other people's financial situation.

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