Hellobee Boards

Hmm...I'm not sure I would categorize either as more "well off". I think family #1, while happy, may be living beyond their means. And family #2 is frugal and great savers, but doesn't necessarily have money to blow whenever they want.

When I think about "well off" I think about someone who has more money than they know what to do with.

I'm not voting. But who cares as long as they are happy.

For me it would depend on the amount of consumer (Credit Card) debt the first family has. The car and home loans don't bother me because those are backed by an asset. The higher income is the big deal. Because family 1 can easily change their habits (eat out less, make fewer frivolous purchases) and up their savings quickly. However, if they have toooonnns of credit card debt to dig themselves out of that's a big deal.

I would rather have two years of savings than all the debt of the other family, but 1 income at that level would not be comfortable to me.

On one hand the first family has a lot of debt and a car loan, but also own a cabin and a home which are appreciating in value.

On the other hand the second family has no debt but owns nothing either.

I'd say the first because they own property. If they were just a little smarter (bought used cars, stopped buying so many things they don't need and eating out so much and wracking up debt) they would be winning by a landslide... but they are still more secure even now. In the end family one can "afford" the irresponsibility the second family cannot because they have that property. Without it, they'd be doing REALLY bad.

The second family should use that savings and buy a home.

I can't say if either are "well off", but voted for family #1 because everything in their situation is relative – what is their debt to income ratio? You could be talking about vastly different scenarios depending on the actual debts and income levels. They are also building assets which is part of being “well off”, which family #2 is not.

I would not vote for Family #2 because despite having none/minimal debt and great savings, I don’t believe you can be “well off” with 1 income which is near the poverty line. Their income certainly the limits their ability to acquire assets going forward, absent some massive trust fund or someone gifting money on the side.

@HabesBabe: Word.

I wouldn't call either situation "well off"; Mortgage debt is the only "good" debt in my mind, so I think #1 has way too many debts, but without knowing specifics about income and debt, it's hard to say if they are really living outside their means. And it would be easier for them to clean their mess up bc of their income.

While #2 has made much smarter choices with what they have, I would be very worried about how hard and fast life can hit you and pile up. Despite the saving, poverty level income is a hard place to be sitting.

@Beyond2: #2 is in a great situation. They may not have a lot but what they have, they work with. I wish more people were like family #2!!!

#2 sounds like they're on the Ramsey plan.

@deerylou: @Shutterbug: @runnerd: @yoursilverlining: @grizz: I can imagine the Thanksgiving table conversation now... "See, BIL/SIL/MIL/FIL/etc., even though you think we are not as well off compared to you, but 26 people on HB think we're better off!" Yikes.

Haha, of course we're supposed to say family #2, but family #1 sounds like they have more borrowing power due to the incomes and owned assets so even though they have more debt they are likely 'better off' financially.

Like @RunnerD pointed out, if one of those families was faced with a massive hospital bill or some kind of upcoming balloon payment, it would ruin family #2 but family #1 would be able to sell or refinance their home and still have a steady income stream.

@Beyond2: When I read it I was like Hey Dave Ramsey keeping up with the Jones but thats how america lives. You have a mortgage, car payments and consumer debt. You dont know how much debt they're in or what they do for a living. where they're living.

You never know if Family 2 is living in a big city where its cheaper to rent a house than to have a high mortgage.

Can't say for certain which fam is mote well off. But fam #2 may not have any worries, but they also sound like they have no fun.

I don't know that there are enough specifics here to really make an educated evaluation, but I would say that my DH and I tend more towards Family #2's perspective. We don't have poverty line income levels (and won't, even when we drop to one income in January) but would be concerned about high levels of consumer debt (e.g. owing on three different credit cards) and saving is very important to us.