Comments on: Spending $1.01 for every dollar brought in? http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/ Personal finance, commentary, and spending less the easy way Fri, 19 Mar 2010 14:24:44 -0400 http://wordpress.org/?v=2.8.6 hourly 1 By: Free Money Finance http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/comment-page-1/#comment-30108 Free Money Finance Fri, 09 Feb 2007 11:21:46 +0000 http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/#comment-30108 <strong>Star Money Articles for the Week of Feb. 5...</strong> Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond: Blueprint for Financial Prosperity details his January net worth. Consumerism Commentary gives some thoughts on the debt to income ratio. He's also starting a ... Star Money Articles for the Week of Feb. 5…

Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond: Blueprint for Financial Prosperity details his January net worth. Consumerism Commentary gives some thoughts on the debt to income ratio. He’s also starting a …

]]> By: Foobarista http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/comment-page-1/#comment-28978 Foobarista Mon, 05 Feb 2007 09:40:50 +0000 http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/#comment-28978 OK - I stand corrected, although my "defense" is that numerous websites (<a href="http://en.wikipedia.org/wiki/Savings" rel="nofollow">wikipedia</a> for instance) define the personal savings rate as disposable income minus personal expenditure. That said, I generally don't like "people are financially stupid" memes, since they often lead to dangerous "calls for government action". One thing that continues to be interesting: the report itself is at a loss to explain why net worth has run up impressively in the past few years while personal savings has tanked. There's clearly something not well understood taking place, which is always scary. OK – I stand corrected, although my “defense” is that numerous websites (wikipedia for instance) define the personal savings rate as disposable income minus personal expenditure.

That said, I generally don’t like “people are financially stupid” memes, since they often lead to dangerous “calls for government action”.

One thing that continues to be interesting: the report itself is at a loss to explain why net worth has run up impressively in the past few years while personal savings has tanked. There’s clearly something not well understood taking place, which is always scary.

]]> By: ThisLittlePiggy http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/comment-page-1/#comment-28910 ThisLittlePiggy Mon, 05 Feb 2007 01:57:28 +0000 http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/#comment-28910 Aimee, Sorry I have to disagree with you. While I'm sure that there "may" be some cases in that situation for the most part people consider "wants" a "neccessity" when it's really not. Also there is the I want it and I want it now no matter the cost mentality. Aimee, Sorry I have to disagree with you. While I’m sure that there “may” be some cases in that situation for the most part people consider “wants” a “neccessity” when it’s really not. Also there is the I want it and I want it now no matter the cost mentality.

]]> By: Aimee http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/comment-page-1/#comment-28830 Aimee Sun, 04 Feb 2007 18:20:00 +0000 http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/#comment-28830 I have to wonder in this instance how much is really a "latte factor" overage. For a lot of people just meeting the needs of their family puts them over (just on neccessities) due to low incomes. I have to wonder in this instance how much is really a “latte factor” overage. For a lot of people just meeting the needs of their family puts them over (just on neccessities) due to low incomes.

]]> By: mbhunter http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/comment-page-1/#comment-28744 mbhunter Sun, 04 Feb 2007 07:44:53 +0000 http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/#comment-28744 Thanks all for your comments! Also thanks jpsfranks for the light reading. ;) Thanks all for your comments!

Also thanks jpsfranks for the light reading. ;)

]]> By: jpsfranks http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/comment-page-1/#comment-28727 jpsfranks Sun, 04 Feb 2007 06:53:09 +0000 http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/#comment-28727 Whenever there is a post like this on a blog or a forum, there is an inevitable comment from someone who intimates that the savings rate calculation is archaic and is missing all sorts of assets or just includes deposits in passbook savings accounts or something. This is incorrect. The Fed's calculation is much more complex. It does include 401k and other tax advantaged accounts, for example (although considering the horrible statistics I've heard about the average American's retirement assets, I doubt it has much impact). It does not include unrealized capital gains, but as MBH suggested, that's probably not a good idea/impossible to assess anyway. So, IMHO this is a big deal and the nation cannot long continue it's current spendthrift lifestyle. Check out this doc for more info on what calculations the Feds use: http://www.gao.gov/new.items/d01591sp.pdf Whenever there is a post like this on a blog or a forum, there is an inevitable comment from someone who intimates that the savings rate calculation is archaic and is missing all sorts of assets or just includes deposits in passbook savings accounts or something.

This is incorrect. The Fed’s calculation is much more complex. It does include 401k and other tax advantaged accounts, for example (although considering the horrible statistics I’ve heard about the average American’s retirement assets, I doubt it has much impact).

It does not include unrealized capital gains, but as MBH suggested, that’s probably not a good idea/impossible to assess anyway.

So, IMHO this is a big deal and the nation cannot long continue it’s current spendthrift lifestyle.

Check out this doc for more info on what calculations the Feds use:
http://www.gao.gov/new.items/d01591sp.pdf

]]> By: Savvy Steward http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/comment-page-1/#comment-28653 Savvy Steward Sat, 03 Feb 2007 22:42:09 +0000 http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/#comment-28653 With a lot of Americans in credit card debt and other types of debt, I'm not surprised by this statistic. Even with before-tax savings vehicles, I bet many are spending more than they are saving. With a lot of Americans in credit card debt and other types of debt, I’m not surprised by this statistic. Even with before-tax savings vehicles, I bet many are spending more than they are saving.

]]> By: Foobarista http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/comment-page-1/#comment-28507 Foobarista Sat, 03 Feb 2007 11:25:56 +0000 http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/#comment-28507 Sorry to be a contrarian, but I can't help but notice that this article is referring to the "personal savings rate". The personal savings rate refers to after-tax savings, which means it doesn't include 401Ks, flexible spending accounts, Traditional IRAs, SEP-IRAs, HSAs, or tax-deferred college accounts. (It does include Roth IRAs since those are funded with after-tax income.) I've also seen studies that show that this particular measure started going down in the late 1970s, when 401Ks and IRAs were introduced, and all of these devices have had their maximums raised greatly in recent years. I know in my own case, my wife and I saved close to $50K in various tax-deferred accounts last year, so our "personal savings rate" wouldn't look very good. Sorry to be a contrarian, but I can’t help but notice that this article is referring to the “personal savings rate”. The personal savings rate refers to after-tax savings, which means it doesn’t include 401Ks, flexible spending accounts, Traditional IRAs, SEP-IRAs, HSAs, or tax-deferred college accounts. (It does include Roth IRAs since those are funded with after-tax income.) I’ve also seen studies that show that this particular measure started going down in the late 1970s, when 401Ks and IRAs were introduced, and all of these devices have had their maximums raised greatly in recent years.

I know in my own case, my wife and I saved close to $50K in various tax-deferred accounts last year, so our “personal savings rate” wouldn’t look very good.

]]> By: Mike http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/comment-page-1/#comment-28356 Mike Fri, 02 Feb 2007 14:26:31 +0000 http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/#comment-28356 Sorry, didn't mean to send that twice. Feel free to delete the first one. Sorry, didn’t mean to send that twice. Feel free to delete the first one.

]]> By: Mike http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/comment-page-1/#comment-28355 Mike Fri, 02 Feb 2007 14:25:41 +0000 http://www.mightybargainhunter.com/2007/02/02/spending-101-for-every-dollar-brought-in/#comment-28355 That is pretty scary. I wonder if we are just more irresponsible with our money these days or if the economic situation is really that much worse. Probably a little of both. That is pretty scary. I wonder if we are just more irresponsible with our money these days or if the economic situation is really that much worse. Probably a little of both.

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