“Every dollar you set aside will compound.”
Out of touch as fuck. If the fees don't take it, the inflation will.
It compounds their profits as they make more from the deposit than you! That’s what he really means.
Use a brokerage like Fidelity as your bank instead of these fuckers at Chase and BofA who don't respect you despite you giving them your money.
Doesn't have to be Fidelity, but in the current day if you're not getting the following from your bank you're getting fucked:
Where does one get something like this in the U.S.?
no min balance, no fees, interest on checking?
I was under the impression that didn't exist.
Fidelity is who I use since they also have my portfolio, but SoFi and many others also provide similar services.
These are some of the most basic features for the UK.
They're pretty basic here too. That doesn't mean there aren't scummy ass banks that still don't offer them, and rely on the company name to get customers. Many old banks don't offer most of this unfortunately, and most people don't go looking for new banks often and get screwed.
Basic finance is easily one of the most important life skills anyone can pick up, right ght besides cooking and understanding when people might not have your best interest in mind.
It’s not out of touch. The problem is we do a shit job of teaching people the basics of budgeting and how to save in our culture.
It's not just 'doom spending.' There is next to nothing to do without spending money anymore. Pretty much the only free things anymore are city parks in good weather and libraries all year around. I have a 13-year-old. She's constantly looking for things to do. There's so little for her to do for free. She's in online school, so sometimes it's nice to get out of the house and go to a cafe to do her schoolwork. $15 minimum every time.
Idk about you but every activity is about $100/month too. I have kids in dance, $100/month per kid. Same with swim lessons (yes at the YMCA too). Looked into ice skating lessons and it's the same. I want my kids to be able to try things but there's no way we can afford to do more than one activity at a time and that's a stretch sometimes.
Yep. She has drum lessons once a week. That's all we can afford. And that's just her and a drum teacher, so it's not even like it's a ton of social interaction. I'd love to get her to do other classes and things like that, but we can't afford them.
Yeah and that's another barrier, start up cost. Instruments are expensive. I grew up playing hockey and if I want my kids to try it it's around $2000 just for one season.
We were (somewhat) lucky on that end. Her drum teacher sold us a simple drum set for $500 a couple of years ago and we've just added bits to it since then. Considering how much drum sets can cost, that was a bargain.
But we also had two incomes at the time. We're down to one now.
As a percussion instructor, it makes me happy that you are investing in your child's talent by getting them lessons!
Thanks! She really likes it. I think it's a good way for her to get aggressions out that she has trouble getting out in other ways.
Only $100/mo? You're lucky! My nephews' tennis and violin lessons are way more than that. Like multiple times more. You must live in a LCOL area.
And then, there's Lemmy that's free! 🧐
Just kidding, I'm not disagreeing with you
That's kind of the sad part really. She doesn't use Lemmy, but she basically spends her free time, when she's not doing other solo activities like drawing, on social media so she has a way to 'hang out' with her friends. In her case, she doesn't even get to see her friends in school anymore (pulling her out was very necessary and partially her choice). If she wants to spend time with friends and doesn't want to do it with parents hanging around, and I don't blame her for wanting that, pretty much the only free thing she can do at this time of the year with them is walk around the mall and window-shop. In other words, the main free thing for kids to do is wish they had money.
In other words, the main free thing for kids to do is wish they had money.
To be fare it was the same way for me as a kid in the 80s
Luckily we still had alladins castle and Sega cities back then so we could at least play some games between wanting a cd or something from hot topic.
What about finding a band?
Even if she is still a very begginer I've seen that playing in a band can help you improve faster and learn other skills necessary as a musician (specially for drummers imo) also I made my best friendships and had the most fun while playing in a band.
PS: In case you havent done it; swapping the drum heads for good "brand name" ones can really improove a cheap drumkit, that and new cymbals (cymbals are the weakest part on any cheap drumkit).
Public schools have plenty of extracurriculars for free or cheap. It sounds like online school is holding back your child from the kind of experiences she's looking for.
You apparently have no current connection to public schools. All of the extracurricular activities cost money since the districts lost funding for them. Band? Uniform fee and instrument rental. Sports? Uniform and equipment fees. Dance, cheerleading, theater, etc. gotta pay since the school no longer has a budget.
Clubs are typically free. Chess club, book club, tabletop gaming, etc. Additionally there is typically financial assistance for the fees, and regardless it's cheaper than pursuing these activities outside of a school setting. $100/no for a drum tutor would translate to an entire school year of many extracurriculars.
Kind of hard to have extracurricular activities when the student body is spread throughout the entire state.
Yeah exactly. I did online school for high school and feel like I really missed out since I couldn't join any clubs or participate in activities in-person.
I realize she'll miss out, but she was being so severely bullied in her school that she couldn't face another day, so we had to take her out. And now we need to give her time to heal.
Social isolation is also horrifically harmful to adolescents. Sounds like there's a better path here that allows your kiddo to get back into society and set her up for success in the future.
Maybe eventually, but not until she heals. She can't handle public school right now.
This banker seems like someone that doesn't understand our economic realities. Nothing worth saving for is in reach, everything is more expensive, we're saddled with a cumulative trillion dollar debt, and most of us don't even make enough money to save money. Of course I'd rather live in the moment and make the people around me happy.
It's basic Econ 101. People buy more in high inflation periods because they know the same goods will cost more in the future.
ETA: I myself have bought sneakers in future sizes for my kids as well as household consumables and toiletries (meaning, not gifts) this Black Friday.
You make a good point about people who are informed or educated enough to actually recognize that. Ignoring the future vs present worth of money aspect.
There are a shit ton of folks out there who don’t know what inflation actually is. I’d say they probably fall into the doom spending category.
From the article (saved you a click):
KEY POINTS
Nearly all Americans are concerned about the current state of the economy.
Still, many continue to spend more and save less.
“Doom spending” may be one way to cope with stress as economic fears mount, however, it comes at the expense of your financial well-being.
Still, many continue to spend more and save less.
That's what happens when literally everything costs more than it used to.
That may be part of it but isn't a full explanation. For instance black Friday spending increased by 7.5% compared to last year, whereas inflation increased 3.2% over the last year.
https://www.cnbc.com/2023/11/28/black-friday-weekend-shopping-turnout-soars-to-a-record.html
https://www.bls.gov/news.release/archives/cpi_11142023.pdf
People are increasing their consumption still.
Eh, given the sales that go on black Friday, people may have been saving for large but necessary purchases. That black Friday was as big as it was is also a sign that people are trying to save a buck.
I know I picked up a washer and dryer, and not much else
You may be right, October retail sales growth was weaker and something like 2.6% growth (just under the 3.2% inflation) as described in articles linked by the posted article. Forecasts are for all holiday spending to reach record levels this year beyond just what inflation would suggest. When the year finishes there will be more concrete data beyond just black Friday to find out for sure.
I think doom spending is a reasonable idea.
I think another piece is increasing wages. Those increased on average year over year in October by 5.2%. So many people probably feel individually they can afford the increased prices and buy even more on top. Though if you're in an industry or situation where you haven't been able to leverage the high labor demand and low unemployment for increased wages like most across the entire economy have been able to, you're probably hurting.
I think, if the data is granular enough, you could see it in what people were buying. Of half the sales were in DVDs and grown-up-toys, then yeah, it’s doom spending.
But I doubt anyone whose pay check to pay check or even remotely close just went out and drop loads of cash on things that weren’t either vaguely needed or budgeted into savings.
Outside of Black Friday, spending increases are accounted for by increase in food and energy inflation- not to mention the cost of debt- especially revolving debt.
Also consider, that the 5% gains you cite probably include people that don’t really need them. The rest of us see a net loss compared to inflation- maybe not yoy, but compared to the last three years certainly. Rememebe the whole point raising interest is to both reduce demand and reduce increases in pay. (After all, it’s all the consumer’s fault and not at all greedy corporations fixing the prices of eggs… which are pretty much used in every kitchen.)
This year no toys for me- rather it was very much needed appliances.
"the rest of us see a net loss compared to inflation"
The data suggests most people have not seen a net loss compared to inflation. Agreed you would need more granular data to know for sure, in case the mean was too influenced by outliers. So I looked up median too which are seeing similar rates of wage growth. So no that doesn't appear to be the case. Most people are not seeing a net loss compared to inflation. If you back up to three years ago, when we had a period of rapidly lowering inflation as the entire economy shut down, oil was literally being given away, and people were getting additional checks and tax credits in the mail, then yes you're right, real wages still lag about three percent. If you compare to four years ago, December, 2019, a more normal economic situation just before the pandemic, then wages have fully compensated for inflation in comparison to then.
Real wages 2019 December https://stats.bls.gov/news.release/archives/realer_01142020.pdf
Real wages October 2023 https://www.bls.gov/news.release/pdf/realer.pdf
Things should also continue to get better, as wage growth has been outpacing inflation again since January 2023.
https://www.statista.com/statistics/1351276/wage-growth-vs-inflation-us/
You also mention well maybe low wage workers aren't getting the increase. It's actually the opposite, lower wage earners have seen more of the wage increase.
I think there's a real argument to be made in favor of the doomspending hypothesis, particularly with younger millenials and housing. If you accept that you're simply not going to be buying a house any time remotely soon, the temptation grows to just say fuck it and go buy some nice stuff or go on a trip.
Speaking with an n of 1, I've certainly noticed I tend to spend more impulsively when stressed. Definitely a theory.
I spent much of my savings on random computer parts because inflation is so bad anyway it feels worthless. And the future is bleak. I enjoy the fancy monitors ect now a lot more than an extra number in the bank they just use as loan collateral for someone else.
Do you even need an explanation
And places additional pressure on the very systems one could fear collapsing.
Not doom spending, doomed spending
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