In the spirit of a good natured "then and now" topic, I had an interesting conversation with a client yesterday. After my strong instructions to not use her credit card while in the mortgage process, she informed me that "she spent $300 on school clothes for one of her children, and was taking the other one shopping tomorrow."
I did not grow up rich, or anywhere close to it. But we weren't poor. I can remember getting 1 new pair of jeans and a couple shirts when school started. I remember my parents buying the jeans at least one and maybe two sizes too big, and me having to roll them up, because I was growing fast and would outgrow them far before they ever wore out. I remember as we got older, my brother was shorter and thicker than I (football player vs. basketball player) and the concern my parents had when my "hand me downs" were not going to fit my brother. NOT because they couldn't afford new cloths for him. They could. But it was considered "wasteful" not to pass the clothes that were in good shape from one boy or girl down to the next. My tall slim jeans wouldn't fit my brother. My parents made sure to find another family who needed them and give them all away when I outgrew them.
For reference before I get to part 2 of the story, we owned a home, and boat, a camper, had an inground pool and 5 acres.
My borrowers mother was in my office when I had that conversation and after hearing it, she started discussing the things above, and how that's how it was in her family, and as far as she knew EVERY family back then. Then she said... "my daughter doesn't own a home yet, but her 12 year old has an iphone. She just spent $300 on new clothes for her 8 year old daughter for school. Everything she wears is new and name brand. She's never had one used or hand me down item of clothing in her life. She has already asked for her own iphone for Christmas this year, and will probably get one... yet you're telling my daughter her debt ratio is so tight to buy a new home that she can't put $300 on a credit card to buy those clothes. She (mother) is the youngest of 3 girls and said "only every once in a while did I ever get any new clothes, and if so, it was usually a Christmas present. " She said she gave the 8 year old grandaughter a very nice and expensive dress for Christmas last year and she opened the box and said "oh, it's just clothes."
You can form your own opinions about what is right and wrong, but when people have two teens with iphones that aren't yet 13, and their debt ratio is the only reason they can't buy a home, I think we can agree that the changes in priorities and trying to keep up with the Jones' are causing a lot of financial trouble and I'm sure other issues.