The Seven-Year Auto Loan (2019)
There&#x27;s a lot of talk about fiscal responsibility in this thread, and I might have a unique perspective on it, living in a small-to-midsized town and being intimately familiar with a lot of people&#x27;s finances who live there. I have wanted to write about this for a while, so this is a good excuse.<p>I serve low-income people as part of my job, and I make $49,000&#x2F;year gross. But my expenses are about half that. I spend $742 on housing and utilities, including phone and internet (remember: small-to-midsized town!). My food budget is $400, thought I haven&#x27;t spent that much yet. I have (or had) a $253 car payment. And so, I consume about half of my post-tax income and can save the other half. If I were co-habitating, I&#x27;d be able to spend even less on housing. Living alone is a luxury.<p>So why are all of my clients in miserable living situations? (I frankly don&#x27;t know how to make ends meet at less than 175% of the federal poverty line without going the rice-and-beans route, so let&#x27;s set those households aside.) Part of it is due to issues highlighted by this article--why do my clients need a $22,000 sedan when I bought mine for $14,000? Part of it is due to the &quot;cycle of poverty&quot;--once you are poor, you can easily get trapped in poverty until you learn some life lessons the hard way (read up on &quot;flex loans&quot; in the state of Tennessee if you want to see some stuff that my clients have to deal with). Part of it is health care, where costs are unforeseeable, and when they arrive they are quite high, throwing a wrench in the plans&#x2F;lives of budgeters who aren&#x27;t extremely careful. And part of it is substance abuse--not the illegal stuff, but the legal stuff: tobacco and alcohol.<p>In the end, I have gone through a lot of clients&#x27; files, and buying a car that&#x27;s too expensive or living in a place that&#x27;s too fancy is rarely the primary reason for their troubles. Why am I in such a good financial position where I&#x27;d be able to make ends meet even if I made half as much? Well, it&#x27;s because I live in a cheap area, don&#x27;t have any substance addictions, am extraordinarily financially educated, have enough savings to buy things like smartphones up front, know how to fight tooth and nail for the cheapest possible option when it comes to big life expenses, and am fit as a fiddle. Oh, and though I am fully on my own now, my parents helped me start my financial life with a good credit score. It&#x27;s hard for people to check all those boxes, and some are out of their control.<p>So eliminating paycheck-to-paycheck living is a multi-faceted problem, with solutions as varied as better financial education, moving to single-payer so that unexpected, burdensome health care costs aren&#x27;t a thing, having robust anti-substance-abuse programs, outlawing 270% APR loans (yes, that&#x27;s what flex loans are...), etc. There&#x27;s a strange dichotomy: it&#x27;s important to have the personal mentality that you are responsible for your own finances, and that the government can&#x27;t and won&#x27;t save you. That&#x27;s how financially successful people think, no matter what their income level. But it&#x27;s also important to realize that there are ways that the deck is stacked against people.