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Author Topic: Spending Vs Saving in economically tenuous times
500_Apples
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posted 31 August 2008 12:39 PM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
I've been having sporadic debates with a friend of mine about whether or not it is a good idea to save or spend in general, to what extent, and specifically with respect to these times.

I live in ohio with its exceedingly low cost of living, though as a graduate student I obviously won't put aside $10, 000 a year but that misses the point. I think some effort to save is good as it establishes a habit for a lifetime and will ease purchases of the next decade such as nicer vacations, a car, et cetera. A large factor I guess is I grew up relatively poor consistently being told "no money", so now I deal both with elevated stress levels whenever I'm in remote financial precariousness (i.e. $500 credit card debt), on the other hand having a hard time retraining myself from things I can afford like eating out.

My friend's counterargument is that good times are worth more in a person's 20s, that my need for security is marginal due to Canada's safety net, and also that the global economy and in particular the US dollar will be crashing in the near future, thereby making saving an economically detrimental choice.

Thoughts?


From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
lagatta
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posted 31 August 2008 12:49 PM      Profile for lagatta     Send New Private Message      Edit/Delete Post  Reply With Quote 
Why on earth do you need a car?
From: Se non ora, quando? | Registered: Apr 2002  |  IP: Logged
500_Apples
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posted 31 August 2008 12:59 PM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by lagatta:
Why on earth do you need a car?

I do not "need" a car and don't own one at this time, and if I "needed" a car I would have bought one on credit.

It depends on where I end up living. For sure if I end up in a city like Vancouver or Boston I'll never need a car.


From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
lagatta
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posted 31 August 2008 01:23 PM      Profile for lagatta     Send New Private Message      Edit/Delete Post  Reply With Quote 
Montreal, Toronto, Vancouver and I believe Ottawa all have carshare schemes, which mean many people who would occasionally need a car don't have to buy one (and wind up using it all the time, because it's there).

Well, of course, if you are living in a village - it just seemed an odd thing for a person who was trying to be frugal to save for (since as far as I can tell you are originally from Montréal, and don't seem to need one where you are studying now.

In your 20s, I'd advise anyone who can to pick up fluency in another language - and it is the best time to pick up fluency in a language other than "Western" ones (Cantonese or Mandarin, Arabic, many others of importance). I do think spending on some kinds of travel where you will learn those skills or others can pay off not only culturally but economically and socially throughout your life.

Indeed, it is good to develop the habit of not being consumed with "stuff", and even with entertainment.


From: Se non ora, quando? | Registered: Apr 2002  |  IP: Logged
bruce_the_vii
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posted 01 September 2008 02:27 PM      Profile for bruce_the_vii     Send New Private Message      Edit/Delete Post  Reply With Quote 
Well, should a young person save, a student no less? One of the things about the posters here abouts is they all talk like they’re a rock and an island. What about women, family and the cost of love? People do all these things, spend, for others. When I was a student I lived very cheaply, like eat a 20 cent stick of licorice for something to do. My opinion, poverty – or living on the cheap – is kind of stilting. If your student life style is stimulating, and that takes being together socially, you can save for a rainy day. It’s not easy
From: Toronto | Registered: Dec 2006  |  IP: Logged
500_Apples
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posted 01 September 2008 02:30 PM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by lagatta:
Montreal, Toronto, Vancouver and I believe Ottawa all have carshare schemes, which mean many people who would occasionally need a car don't have to buy one (and wind up using it all the time, because it's there).

Well, of course, if you are living in a village - it just seemed an odd thing for a person who was trying to be frugal to save for (since as far as I can tell you are originally from Montréal, and don't seem to need one where you are studying now.

In your 20s, I'd advise anyone who can to pick up fluency in another language - and it is the best time to pick up fluency in a language other than "Western" ones (Cantonese or Mandarin, Arabic, many others of importance). I do think spending on some kinds of travel where you will learn those skills or others can pay off not only culturally but economically and socially throughout your life.

Indeed, it is good to develop the habit of not being consumed with "stuff", and even with entertainment.


Depends what neighborhood you're in I guess. When I was in Montreal I found the public transit inadequate and depressing. Between CEGEP and University I was averaging 2.5 hours a day every day for six years to commute, and by the end it was debilitating my soul.


From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
500_Apples
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posted 01 September 2008 02:34 PM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by bruce_the_vii:
One of the things about the posters here abouts is they all talk like they’re a rock and an island. What about women, family and the cost of love?

I don't understand?

I have no kids.

As for love, well when I'm in a relationship I tend to spend more money, but a limit sets in as it's bad to spend too much money in a relationship, i.e. flowers should be special rather than typical and going dutch should be the norm.

I bought some licorice today, black licorice, they were 99 cents a piece, that really good panda brand.

[ 01 September 2008: Message edited by: 500_Apples ]


From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
bruce_the_vii
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posted 01 September 2008 03:45 PM      Profile for bruce_the_vii     Send New Private Message      Edit/Delete Post  Reply With Quote 
Posters here abouts tend to disparage the burgoisee life style although it is mostly about family. The car is terrible. People spend on their love. If you are in a relation this will happen.

[ 01 September 2008: Message edited by: bruce_the_vii ]


From: Toronto | Registered: Dec 2006  |  IP: Logged
Brian White
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posted 01 September 2008 03:54 PM      Profile for Brian White   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
I grew up the same, and having no money terrifys me, I have been a paranoid worker and saver for years.
Others who, I think grew up the same, spend their paycheck the day after they get it.
I do not know who is right. I still agonise about buying stuff and have to justify it 50 ways before it buy.
I missed out on a lot of good times because of fear for the future.
I wonder why people are so different?
Saving is still necessary because you need to be able to show the banks in bad times that you are capable of putting money away.
House prices might go into freefall and that just means you will need less savings to get a mortgauge.
BUT you still need them!
Some savings can be things too.
I have tools from the first year I came to canada. (A mastercraft drill for instance).
A drill saves money and time and friends favours.
Though Some people have such a buying addiction that they have to rent storage for their stuff.
But yeah, If I had my time again, I would have been a little more carefree in my 20's.
quote:
Originally posted by 500_Apples:
I've been having sporadic debates with a friend of mine about whether or not it is a good idea to save or spend in general, to what extent, and specifically with respect to these times.

I live in ohio with its exceedingly low cost of living, though as a graduate student I obviously won't put aside $10, 000 a year but that misses the point. I think some effort to save is good as it establishes a habit for a lifetime and will ease purchases of the next decade such as nicer vacations, a car, et cetera. A large factor I guess is I grew up relatively poor consistently being told "no money", so now I deal both with elevated stress levels whenever I'm in remote financial precariousness (i.e. $500 credit card debt), on the other hand having a hard time retraining myself from things I can afford like eating out.

My friend's counterargument is that good times are worth more in a person's 20s, that my need for security is marginal due to Canada's safety net, and also that the global economy and in particular the US dollar will be crashing in the near future, thereby making saving an economically detrimental choice.

Thoughts?



From: Victoria Bc | Registered: Jan 2005  |  IP: Logged
Boom Boom
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posted 01 September 2008 03:58 PM      Profile for Boom Boom     Send New Private Message      Edit/Delete Post  Reply With Quote 
Why save? You only live once.
From: Make the rich pay! | Registered: Dec 2004  |  IP: Logged
DrConway
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posted 16 September 2008 09:49 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
I've pretty much bought all the computer stuff I ever could want or even need. My webserver is a solid dual-core machine now, my main computer is more than ample for what I need and I have a good laptop. Most of what I buy these days is just food, or I pay rent and tuition with the $$. The rest just piles up in my bank account.

I've recently signed up with car-sharing, but I have not as yet felt the need to use it

Last note - I'm preparing to liquidate credit card debt. In troubled times the last thing I need to be doing is carrying debt that can, in theory, be recalled at any time.

Incidentally, on a tangential note, I didn't realize until now that there have been sporadic cases of food rationing in the USA. I'm sure similar examples will abound in Canada, eventually. Would be a good idea to stock up on some long-term nonperishables such as anything that comes in a can. Orange juice spiked with calcium is probably just as good as milk, and since it comes in a concentrate you can buy it and stick it in your freezer for ages.

[ 16 September 2008: Message edited by: DrConway ]


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
500_Apples
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posted 16 September 2008 10:14 AM      Profile for 500_Apples   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Well I'm now convinced there's little reason to save right now, except maybe to buy some euros and yens and if I have a big ticket item planned for in six months (i.e. computer equipment).
From: Montreal, Quebec | Registered: Jun 2006  |  IP: Logged
lagatta
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posted 16 September 2008 10:16 AM      Profile for lagatta     Send New Private Message      Edit/Delete Post  Reply With Quote 
Bruce, I don't get what you are driving at: if you find love you have to buy a car?

I've been in more than one longterm relationship in my far-from-young life, no car. (Like many people in Québec, I never saw any benefit in marriage, nor did companion - we have about the lowest legal marriage rate in the world). And I decided very young that I was never going to have children, and never changed my mind about that.

None of what we are talking here has anything to do with a "bourgeois lifestyle". The bourgeoisie are above all that. The super-rich aren't those who will be harmed the most by the impending financial crisis: ordinary people with a bit of savings and investment will.


From: Se non ora, quando? | Registered: Apr 2002  |  IP: Logged

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