Originally Posted by Tradd
It's a combination of a lot of factors, but I think a lot of it has to do with personal choices - and some people tending to be short-sighted.
For example, a pricey private college is probably not needed in most cases, unless you're into law, medicine, engineering. Choosing an expensive private college if you're going to be a teacher, for example, is not a good choice. You come out with your undergrad degree with a huge debt load, in a field where you're not going to make a ton. Yes, you'd probably still have student loans, but if you went to a state school, even a "second-tier" one, your debt would be much lower. That huge student loan debt load plays into the picture later when you want to be a SAHM and you can't, because you've got all of this debt.
A lot of young couples want everything NOW - the nice house with the nice furniture, two new cars, etc. - the same standard of living level that their parents had when the young person left home to go to college/get married. They seem to forget that it took their parents YEARS to get to that standard of living. They forget the earlier years when maybe there was hand-me-down old furniture and all cars were bought used, there were less extras, etc.
A lot of the stuff people "have to have" are luxury items. I'm not talking internet access, which many need for work/school at home. But things like expensive flat-screen TVs, huge cable/satellite packages that are $100/month, vehicles with payments over $400 a month, iPhones, the latest in video games, eating out all the time.
If people could get their "needs vs. wants" calculators adjusted, they would stand a much better chance of being able to get by on one income, or maybe 1.25-1.5, saving the rest of the second income - if one partner wants to work rather than staying home.
I've also seen a lot of young folks who are spendthrifts, running up as much credit card debt as the card issuers will allow. When you enter a marriage with $10K-$15K in credit card debt, then throw $50K in student loans on top of that - for EACH half of a couple, you've got some major issues right there.
I think you make a lot of valid points. I think choice certainly does play a large role.
I hear these examples a lot, especially in this forum, of the role choice played in finances - accumulating debt, carrying credit card debt, and not being able to differentiate well between wants and needs.
I guess I'm always a bit stunned...like, is this real? Is it an accurate picture?
For instance, with the student loan example, I went to an affordable school (but still a pretty well rated one) AND I had a pretty decent amount of scholarships. It wasn't a private college but I still ended up with significant student loan debt because I paid for 100% of everything myself. I've just about paid all that student loan debt off, and it's taken me years of being dilligent about it.
I was pretty selective about what major I chose, with an eye for career use and being able to support myself, but also making a good contribution to the world.
I just know that without the degree, I would not be in good financial shape so that student loan debt was a blessing in every way!
It did delay when I had children, for sure, and it was a small factor in whether I could stay at home or not, but mostly it was other economic forces that determined that one for me.
For what it's worth, I've always been frugal and lived within my/our means. I save and have a retirement nest egg. No vacations, luxury things, etc. Never had an ounce of credit card debt.
It's really the cost of living, and the stability that also comes with having an income and career of my own that I can rely on, that makes it impossible for us to live permanently on one income.
Cost of living is the number one factor, though.
I was lucky enough and frugal enough to be able to save up a bit and be a stay at home parent in the early years, and that is a blessing. I plan to return to work sooner rather than later, though. The ability for us to live on one income in a permanent arrangement is simply out of the question.
And we're two college educated, good income, frugal, wise money managers.
It really comes down to cost of living in the area you live for a lot of people.