The price of oil

[Chevy Nick]

I heard an interview on TV yesterday with oil tycoon Boone Pickens, and he said that global oil production is currently peaking at 85 million barrels per day, and that demand is still not quenched by this supply. Because of this, the price of oil will continue to increase. I think that some more supply might be squeezed out in the next decade, but regardless, I may be one of the few that hopes the price of oil continues to increase. I can afford to pay $6 per gallon of gas, that may seem selfish, but I feel like that is the best thing for this country. The best motivation for development of alternative fuels is financial motivation, people will only take electric-only vehicles such as the Volt seriously when it affects their pocketbook. I think we are on the verge of the electric car boom (similar to the internet boom of the 90's), and I think by 2017 that there will be a great deal of electric cars on the road. The sooner America can get over our oil addiction, the better. $200 per barrel of oil is probably the fastest and best way to wean ourselves, let the market drive electric car development.

[Oracle of Delphi]

I heard an interview on TV yesterday with oil tycoon Boone Pickens, and he said that global oil production is currently peaking at 85 million barrels per day, and that demand is still not quenched by this supply. Because of this, the price of oil will continue to increase. I think that some more supply might be squeezed out in the next decade, but regardless, I may be one of the few that hopes the price of oil continues to increase. I can afford to pay $6 per gallon of gas, that may seem selfish, but I feel like that is the best thing for this country. The best motivation for development of alternative fuels is financial motivation, people will only take electric-only vehicles such as the Volt seriously when it affects their pocketbook. I think we are on the verge of the electric car boom (similar to the internet boom of the 90's), and I think by 2017 that there will be a great deal of electric cars on the road. The sooner America can get over our oil addiction, the better. $200 per barrel of oil is probably the fastest and best way to wean ourselves, let the market drive electric car development.

There is talk of $125 bucks a barrel by spring! Are you ready?

[Mr.Krinkle]

Theres the very real possibility of "peak oil" and theres also the possibility investors looking to line their pockets realize this possibility as an opportunity.

Geopolitical concerns aside the trend is your friend. Some see it as a bubble waiting to pop.

It wouldnt be the first time but there are other avenues that we definately need to explore.

Edited November 12, 2007 by Mr.Krinkle

[Intrepidation]

Oil can increase to whatever price when I've got the money to pay for it..or rather to pay for a vehicle to run on alternative fuel. That's the problem is that many people have trouble paying for gas at the prices they are now, and increasing it only hurts more. Alternative fuel systems and such are great and I wholeheartedly condone them, but I sure as hell can't afford a new car with such a system right now...and what about the billions of cars on the road right now that run on gas? What do we do with them? Is there some way to convert them to run on say hydrogen? Or are all the owners SOL?

[Chevy Nick]

Oil can increase to whatever price when I've got the money to pay for it..or rather to pay for a vehicle to run on alternative fuel. That's the problem is that many people have trouble paying for gas at the prices they are now, and increasing it only hurts more. Alternative fuel systems and such are great and I wholeheartedly condone them, but I sure as hell can't afford a new car with such a system right now...and what about the billions of cars on the road right now that run on gas? What do we do with them? Is there some way to convert them to run on say hydrogen? Or are all the owners SOL?

My point is that the higher the price of oil goes, the faster electric cars will develop. As this transition begins, the demand should decrease - lowering the price of gas significantly for the remaining internal combustion engines on the road. I'm hoping that in my lifetime cars that run on gasoline will be seen as 'indulgences' of an antique era.

To answer your question; yes, people stuck with gas engines will be out of luck.

[loki]

will this cause less 20's (and bigger) being sold ... i hope so!!!

[FUTURE_OF_GM]

My point is that the higher the price of oil goes, the faster electric cars will develop. As this transition begins, the demand should decrease - lowering the price of gas significantly for the remaining internal combustion engines on the road. I'm hoping that in my lifetime cars that run on gasoline will be seen as 'indulgences' of an antique era.

To answer your question; yes, people stuck with gas engines will be out of luck.

I'm not so sure this is a good idea...

1) Do you seriously think that the price of oil will ever come back down? I highly doubt that the oil companies will stop lining their pockets simply because demand decreases a bit. Not to mention, if this is "peak oil" (What about the promised investments in new refineries? What about the HUGE deposits found in the gulf?) then what makes you think supply will ever catch up with demand even if demand is decreasing?

2) Careful what you wish for with the 'electric car phenomenon' I'm sure, soon enough us performance car fans will be screwed out of our cars one way or another either through lack of an infrastructure or legislation banning them (Yes, I do think the enviro-losers will go that far) Wishing our cars as 'indulgences' will only serve to accelerate that IMO.

I'm seriously scared about fuel right now. I love my cars, especially my classics, and I'm worried about their future. It's one thing that makes me happy (I don't have many things that do) and the loss of that would not be a good thing.

[Camino LS6]

Do all you you saying that dramatic increases in the price of oil is a positive thing realize what you are asking for?

Economic disaster will be the immediate result.

Not good, not good at all.

For any of us.

Period.

[Chevy Nick]

1) Do you seriously think that the price of oil will ever come back down? I highly doubt that the oil companies will stop lining their pockets simply because demand decreases a bit.

I wasn't around in beginning of the 20th century, but I plan to be around at the middle of the 21st. When oil has run its course, the price will be the same as when it started - pennies per gallon. I'm taking the long view here, looking way down the road.

2) Careful what you wish for with the 'electric car phenomenon' I'm sure, soon enough us performance car fans will be screwed out of our cars one way or another either through lack of an infrastructure or legislation banning them (Yes, I do think the enviro-losers will go that far) Wishing our cars as 'indulgences' will only serve to accelerate that IMO.

100 years ago people said that motor-carriage racing wouldn't be as good as horse racing. The age of the electric sports car will soon begin.

Do all you you saying that dramatic increases in the price of oil is a positive thing realize what you are asking for?

Economic disaster will be the immediate result.

We're already at $3/gallon, and we'll probably be close to $4/gallon next summer- another $2 increase isn't that far away.

[daves87rs]

Do all you you saying that dramatic increases in the price of oil is a positive thing realize what you are asking for?

Economic disaster will be the immediate result.

Not good, not good at all.

For any of us.

Period.

True.

But then again, the government doesn't seem to care either....just look at the housing market.

[PurdueGuy]

True.

But then again, the government doesn't seem to care either....just look at the housing market.

It would be royally stupid for the government to "fix" the housing market. The actions they should have taken would have been years ago, preventing pitfall loans from being allowed. Now the whole housing market is overinflated and becoming a bursting bubble. It's going to be crappy, but necessary for the market to normalize. Some people made bad decisions to get bad loans resulting in bad consequences. That's life, suck it up. And for the people who are losing value in their homes - that was fake value to begin with. I own a home, it's going to affect me too, but a healthy economy is better than a falsely inflated economy from government bailouts, which you & I have to pay for anyway.

[Ravenfreak13]

i hope gas peaks soon. cause after a peak, prices lower. If I fill the saturn tank fully, i have a month for prices to go down

[daves87rs]

It would be royally stupid for the government to "fix" the housing market. The actions they should have taken would have been years ago, preventing pitfall loans from being allowed. Now the whole housing market is overinflated and becoming a bursting bubble. It's going to be crappy, but necessary for the market to normalize. Some people made bad decisions to get bad loans resulting in bad consequences. That's life, suck it up. And for the people who are losing value in their homes - that was fake value to begin with. I own a home, it's going to affect me too, but a healthy economy is better than a falsely inflated economy from government bailouts, which you & I have to pay for anyway.

True-but we haven't seen the real fallout yet. And you're not considering the nasty effect that this mess is causing on the stock market. This whole housing this is going to turn nasty.

And the goverment shouldn't fix it-but they need to do something about it (ie rule changes or something to that effect)

And the fact that the government know what's going on with the oil prices but refuses to do anything at all says quite a bit.

You can't have huge problems going on and not doo a thing about them.

That's why you don't wait for your toilet to explode before you fix the leaks.......

[PurdueGuy]

True-but we haven't seen the real fallout yet. And you're not considering the nasty effect that this mess is causing on the stock market. This whole housing this is going to turn nasty.

And the goverment shouldn't fix it-but they need to do something about it (ie rule changes or something to that effect)

And the fact that the government know what's going on with the oil prices but refuses to do anything at all says quite a bit.

You can't have huge problems going on and not doo a thing about them.

That's why you don't wait for your toilet to explode before you fix the leaks.......

I'm ok with government:

A) helping normalize the economy and preventing shakeups from wrecking the whole thing

B) preventing future market bloating from what are/were essentially scams (variable interest loans, etc)

I'm not ok with bailouts, which have been talked about. If a bunch of people get free houses on tax dollars because they were stupid enough to get scam loans, my head will implode. Same goes if some companies that were involved in the scamming get bailed out just to save some jobs.

Bad things will happen, and gov't action should accept and deal with that, not try to band-aid it back to how it was (bloated). A leaking toilet will not normalize. An economy generally will.

[Dsuupr]

Do all you you saying that dramatic increases in the price of oil is a positive thing realize what you are asking for?

Economic disaster will be the immediate result.

Not good, not good at all.

For any of us.

Period.

This might sound mean, but I've said for years that the younger generations (Y and down), need a good depression. Maybe it will give them appreciation for all the CRAP they have. Each generation has had to deal with bad times. Even the X Generation had poor employment opportunity and a falling economy in the early 90s. It's tough times that teach us and help us grow. Hopefully this will also get a generation to be less self involved. Interesting that was back when the Father of the idiot, I mean President, was around.

[daves87rs]

This might sound mean, but I've said for years that the younger generations (Y and down), need a good depression. Maybe it will give them appreciation for all the CRAP they have. Each generation has had to deal with bad times. Even the X Generation had poor employment opportunity and a falling economy in the early 90s. It's tough times that teach us and help us grow. Hopefully this will also get a generation to be less self involved. Interesting that was back when the Father of the idiot, I mean President, was around.

Yeah, a good shake up wouldn't hurt....

[Z-06]

This might sound mean, but I've said for years that the younger generations (Y and down), need a good depression. Maybe it will give them appreciation for all the CRAP they have. Each generation has had to deal with bad times. Even the X Generation had poor employment opportunity and a falling economy in the early 90s. It's tough times that teach us and help us grow. Hopefully this will also get a generation to be less self involved. Interesting that was back when the Father of the idiot, I mean President, was around.

Recession is good, it shakes up the economy and causes new ideas to forge and spring up the economy again.

It is like a mini revolution.

[Satty]

Well, as long as we're going off on people of a different generation...

This is all about supply and demand, and who do you think demands the most? Probably the largest section of the population, those f@#king, self-indulgent baby boomers. They're the ones who buy gay guzzling trucks and suvs, thereby increasing the demand. Christ, they're also going to eat up all of the money in Social Security before I even get a sniff. Hopefully all the drugs and VW Beetle exhaust fumes take years off their lives.

And no, I'm not being serious, its just that the above posts are downright stupid, so I thought I would join in.

We need a depression? Please. We need a federal government that acknowledges anyone who makes less than $500,000/year.

Edited November 14, 2007 by Satty

[Z-06]

Well, as long as we're going off on people of a different generation...

This is all about supply and demand, and who do you think demands the most? Probably the largest section of the population, those f@#king, self-indulgent baby boomers. They're the ones who buy gay guzzling trucks and suvs, thereby increasing the demand. Christ, they're also going to eat up all of the money in Social Security before I even get a sniff. Hopefully all the drugs and VW Beetle exhaust fumes take years off their lives.

And no, I'm not being serious, its just that the above posts are downright stupid, so I thought I would join in.

We need a depression? Please. We need a federal government that acknowledges anyone who makes less than $500,000/year.

I am not siding any generation. The fact that many of the people do not realize, there is more involved in saving money and putting it back in investment. The problem with the economy is inherent with the people, NOT the government. Both parties are mouses of the ideology of "who will bell the cat" in letting people know that they are the ones who need to control.

Baby boomers think that they have done something great to our country, so they want to live on social security and have an attitude, well our Y and Z gens will pay for our greatness and that the country owes them something.

Y gens are maxing out their credit cards, buying things they cannot afford and then waiting for the FEDS to come for their help. Z gens are well just being fed their wants before even letting them know about the reality. The so called capitalists are milking this cow, which is about to go barren.

The false controls by the FEDS will not lead the country anywhere, but it will only delay the inevitable.

[CARBIZ]

We are into the 3rd full generation born since WWII, who have grown up with television and the consumer culture. It isn't so much that our grandparents were smarter, but that they didn't have as many choices as we do today - nor did they have the constant bombardment since birth to 'buy this or buy that.' How do you tell your 10 year old that he/she does not need the latest $75 video game? Or $120 pair of Nikes?

Television has opened the door and shown us how the other half lives - and we all want a piece of that. Even if we have to borrow the money. The banks are just as responsible for this mess. I just love it how they 'package' their 'products.' Everything is a commodity and everything is for sale.

I lost $60k on my last house, during the previous 'correction' in the market in '89. Did we not learn our lessons then?

[Dsuupr]

How do you tell your 10 year old that he/she does not need the latest $75 video game? Or $120 pair of Nikes?

I tell my kids, "Tough crap". My wife has made a VERY strong point of making sure our daughters know the value of the dollar. They don't often ask for stuff and more than once have brought up ideas on how we can save money.

How did we teach our kids this? Open and honest about the realities of our budget. Does that mean they know what we make? No It does mean they know how much we have to spend when we go grocery shopping and they go with us. Some things we do / did;

1. They are each given $5 a week for lunch purchase and told to pick out their own stuff.

2. They both have a $20 credit line. When earning their allowance (they must work for it), they are forced to pay a percentage of it towards any outstanding bills. The credit line is increased for special purchases, but a pre-approval is needed PRIOR to leaving the home for the store.

3. Our kids do not have $75 video games or $120 shoes. If they want to waste money on those items, they must earn it. Both girls would rather play outside with friends than spend time in front of the television.

4. We did just recently buy a Wii (mostly for me, golfing :AH-HA_wink: ). The girls were allowed $25 each for a game. If any of you have a Wii you know that they would have to pull their money together for 1 game, or get 2 used games, or ?? They did pull their money together and share the game. The girls know we will not buy more games, nor will they expect any for their birthday or Christmas.

5. My wife puts a $50 budget on each kid for Christmas. I know many people spend more than that on 1 of 15 presents for their kids. We refuse to believe Christmas is about giving crap away. We go with the, Christ in Christmas is about Christ.

6. Our children are not given an open budget for school clothes. They are required to get 5 out fits and not go over a budgeted amount for those outfits. They never have.

7. When on family vacations a budget is created and the children know what it is. With that, they don't ask to buy crap because they know we don't budget for it.

8. If something in our house isn’t used we get rid of it. Our house isn’t full of things that aren’t enjoyed for the sake of having more than the neighbors. Though my daughters like to keep their art work, they don’t keep stuff they don’t “use”.

9. We don’t buy things because our neighbors have one. Our kids recognize this as a positive thing and for the most part do the same when it comes to their friends.

10. Even though our income allows us to buy more crap than we can use, we don't. Doing this has taught our kids to do the same.

11. We make a point to buy things within our budget. A budget we have created, not one a creditor gives us.

Two great examples of our family making sure we stay within budget

a. in 2005 we showed up at the Chevrolet dealer to buy a new car. We had determined out budget and told the salesperson what we could afford. She assumed our credit and / or income dictated it. After getting our information and running our credit she came back and politely told us that we would be approved for a new Suburban if we wanted one, to which my wife answered, no thank you our budget doesn't allow for a payment that high. In the end we bought a base Cobalt. When my income increased we upgraded to the HHR 2LT, but again had the income, as far as banks had been concerned, to buy a Suburban and Silverado.

b. A few years ago we went looking to purchase what is now our current home. We got pre-approved and without asking how much we got approved for we went house shopping. The first homes we picked were in the lower price range of the market. The housing market was VERY hot at the time and we got out bid twice. We noticed our current home for sale, but my wife was convinced we wouldn’t qualify and the payment would not fit our budget. I called our mortgage person only to find out that we not only qualified for the home, we qualified for one with an additional 500 sq ft that cost $30,000 more. Knowing that the smaller home would fit our needs fine, and the mortgage would be less we picked the smaller one. Once again, not going above our income or our needs. Our kids knew the options and agreed that a smaller home with a lower mortgage is better than a bigger home with space we don’t need.

Point is; make a budget, stick to it, and teach your children about it.

Edited November 14, 2007 by Dsuupr

[RJB]

Does anyone remember 180hp Corvette's? Well...if the price of oil continues like this and the greediness doesn't stop with all these snakes driving it up, this is what you can look forward to.

[RichW5]

Those who say "The higher the price of oil, the better" have no idea of the damage that will cause to the economy and to the lives of all but the very rich. Those people must not drive to work, buy groceries or enjoy a normal life.

Dsuupr is an exception to the "spend every dollar you have" norm and should be congratulated. While I live my life similar to his, my wife believes that the more you spend, the happier you are. My step-sons are economic disasters and would not survive a recession, much less a depression. One of them (the 30 year old) is already living in my basement.

Our country should support the development of alternate energy sources, while regulating our current energy supply. That means drilling for more oil in our own country. It means keeping the price of gasoline affordable until alternate fuels are able to economically replace gasoline.

[BatmanGTO]

I tell my kids, "Tough crap". My wife has made a VERY strong point of making sure our daughters know the value of the dollar. They don't often ask for stuff and more than once have brought up ideas on how we can save money.

How did we teach our kids this? Open and honest about the realities of our budget. Does that mean they know what we make? No It does mean they know how much we have to spend when we go grocery shopping and they go with us. Some things we do / did;

1. They are each given $5 a week for lunch purchase and told to pick out their own stuff.

2. They both have a $20 credit line. When earning their allowance (they must work for it), they are forced to pay a percentage of it towards any outstanding bills. The credit line is increased for special purchases, but a pre-approval is needed PRIOR to leaving the home for the store.

3. Our kids do not have $75 video games or $120 shoes. If they want to waste money on those items, they must earn it. Both girls would rather play outside with friends than spend time in front of the television.

4. We did just recently buy a Wii (mostly for me, golfing :AH-HA_wink: ). The girls were allowed $25 each for a game. If any of you have a Wii you know that they would have to pull their money together for 1 game, or get 2 used games, or ?? They did pull their money together and share the game. The girls know we will not buy more games, nor will they expect any for their birthday or Christmas.

5. My wife puts a $50 budget on each kid for Christmas. I know many people spend more than that on 1 of 15 presents for their kids. We refuse to believe Christmas is about giving crap away. We go with the, Christ in Christmas is about Christ.

6. Our children are not given an open budget for school clothes. They are required to get 5 out fits and not go over a budgeted amount for those outfits. They never have.

7. When on family vacations a budget is created and the children know what it is. With that, they don't ask to buy crap because they know we don't budget for it.

8. If something in our house isn’t used we get rid of it. Our house isn’t full of things that aren’t enjoyed for the sake of having more than the neighbors. Though my daughters like to keep their art work, they don’t keep stuff they don’t “use”.

9. We don’t buy things because our neighbors have one. Our kids recognize this as a positive thing and for the most part do the same when it comes to their friends.

10. Even though our income allows us to buy more crap than we can use, we don't. Doing this has taught our kids to do the same.

11. We make a point to buy things within our budget. A budget we have created, not one a creditor gives us.

Two great examples of our family making sure we stay within budget

a. in 2005 we showed up at the Chevrolet dealer to buy a new car. We had determined out budget and told the salesperson what we could afford. She assumed our credit and / or income dictated it. After getting our information and running our credit she came back and politely told us that we would be approved for a new Suburban if we wanted one, to which my wife answered, no thank you our budget doesn't allow for a payment that high. In the end we bought a base Cobalt. When my income increased we upgraded to the HHR 2LT, but again had the income, as far as banks had been concerned, to buy a Suburban and Silverado.

b. A few years ago we went looking to purchase what is now our current home. We got pre-approved and without asking how much we got approved for we went house shopping. The first homes we picked were in the lower price range of the market. The housing market was VERY hot at the time and we got out bid twice. We noticed our current home for sale, but my wife was convinced we wouldn’t qualify and the payment would not fit our budget. I called our mortgage person only to find out that we not only qualified for the home, we qualified for one with an additional 500 sq ft that cost $30,000 more. Knowing that the smaller home would fit our needs fine, and the mortgage would be less we picked the smaller one. Once again, not going above our income or our needs. Our kids knew the options and agreed that a smaller home with a lower mortgage is better than a bigger home with space we don’t need.

Point is; make a budget, stick to it, and teach your children about it.

*claps hands* smart man

[frogger]

The number of people I know who live almost paycheque to paycheque yet drive nice vehicles, wear nice clothes, have lots of electronic toys is alarming.

People are just not very disciplined. I mean if your car is depreciating, worth more than your assets/investments and you are 30 years old, you've got issues.

[pow]

Back to the price of oil, I paid $3.75/gal for premium yesterday, yes, much less than what the rest of the world pays, but it's definitely had an immediate effect on my driving habits.

[CARBIZ]

Those who say "The higher the price of oil, the better" have no idea of the damage that will cause to the economy and to the lives of all but the very rich. Those people must not drive to work, buy groceries or enjoy a normal life.

Dsuupr is an exception to the "spend every dollar you have" norm and should be congratulated. While I live my life similar to his, my wife believes that the more you spend, the happier you are. My step-sons are economic disasters and would not survive a recession, much less a depression. One of them (the 30 year old) is already living in my basement.

Our country should support the development of alternate energy sources, while regulating our current energy supply. That means drilling for more oil in our own country. It means keeping the price of gasoline affordable until alternate fuels are able to economically replace gasoline.

The trouble is, the 'market' tried that once and it only worked for a while. The rest of the world gets it. Drive anywhere else and you will see people driving 'sensible' vehicles. But in North America we feel it is our God given right to drive a 6,000 lb behemoth to pick up groceries. That may be an individual's perogative, but as a nation we are killing ourselves.

It is going to take $5 a gallon to get the point across - and the price will have to STAY at $5 a gallon. There will be an immediate effect on people's lifestyles, but Europe and Brazil have been coping with gas priced much higher than that and they aren't suffering.

[daves87rs]

The trouble is, the 'market' tried that once and it only worked for a while. The rest of the world gets it. Drive anywhere else and you will see people driving 'sensible' vehicles. But in North America we feel it is our God given right to drive a 6,000 lb behemoth to pick up groceries. That may be an individual's perogative, but as a nation we are killing ourselves.

It is going to take $5 a gallon to get the point across - and the price will have to STAY at $5 a gallon. There will be an immediate effect on people's lifestyles, but Europe and Brazil have been coping with gas priced much higher than that and they aren't suffering.

Yeah, but americans are really, really, thick headed.

We'll try to cut costs in other places....

[daves87rs]

I tell my kids, "Tough crap". My wife has made a VERY strong point of making sure our daughters know the value of the dollar. They don't often ask for stuff and more than once have brought up ideas on how we can save money.

How did we teach our kids this? Open and honest about the realities of our budget. Does that mean they know what we make? No It does mean they know how much we have to spend when we go grocery shopping and they go with us. Some things we do / did;

1. They are each given $5 a week for lunch purchase and told to pick out their own stuff.

2. They both have a $20 credit line. When earning their allowance (they must work for it), they are forced to pay a percentage of it towards any outstanding bills. The credit line is increased for special purchases, but a pre-approval is needed PRIOR to leaving the home for the store.

3. Our kids do not have $75 video games or $120 shoes. If they want to waste money on those items, they must earn it. Both girls would rather play outside with friends than spend time in front of the television.

4. We did just recently buy a Wii (mostly for me, golfing :AH-HA_wink: ). The girls were allowed $25 each for a game. If any of you have a Wii you know that they would have to pull their money together for 1 game, or get 2 used games, or ?? They did pull their money together and share the game. The girls know we will not buy more games, nor will they expect any for their birthday or Christmas.

5. My wife puts a $50 budget on each kid for Christmas. I know many people spend more than that on 1 of 15 presents for their kids. We refuse to believe Christmas is about giving crap away. We go with the, Christ in Christmas is about Christ.

6. Our children are not given an open budget for school clothes. They are required to get 5 out fits and not go over a budgeted amount for those outfits. They never have.

7. When on family vacations a budget is created and the children know what it is. With that, they don't ask to buy crap because they know we don't budget for it.

8. If something in our house isn’t used we get rid of it. Our house isn’t full of things that aren’t enjoyed for the sake of having more than the neighbors. Though my daughters like to keep their art work, they don’t keep stuff they don’t “use”.

9. We don’t buy things because our neighbors have one. Our kids recognize this as a positive thing and for the most part do the same when it comes to their friends.

10. Even though our income allows us to buy more crap than we can use, we don't. Doing this has taught our kids to do the same.

11. We make a point to buy things within our budget. A budget we have created, not one a creditor gives us.

Two great examples of our family making sure we stay within budget

a. in 2005 we showed up at the Chevrolet dealer to buy a new car. We had determined out budget and told the salesperson what we could afford. She assumed our credit and / or income dictated it. After getting our information and running our credit she came back and politely told us that we would be approved for a new Suburban if we wanted one, to which my wife answered, no thank you our budget doesn't allow for a payment that high. In the end we bought a base Cobalt. When my income increased we upgraded to the HHR 2LT, but again had the income, as far as banks had been concerned, to buy a Suburban and Silverado.

b. A few years ago we went looking to purchase what is now our current home. We got pre-approved and without asking how much we got approved for we went house shopping. The first homes we picked were in the lower price range of the market. The housing market was VERY hot at the time and we got out bid twice. We noticed our current home for sale, but my wife was convinced we wouldn’t qualify and the payment would not fit our budget. I called our mortgage person only to find out that we not only qualified for the home, we qualified for one with an additional 500 sq ft that cost $30,000 more. Knowing that the smaller home would fit our needs fine, and the mortgage would be less we picked the smaller one. Once again, not going above our income or our needs. Our kids knew the options and agreed that a smaller home with a lower mortgage is better than a bigger home with space we don’t need.

Point is; make a budget, stick to it, and teach your children about it.

I very much agree with that......

Some things I'm planning:

-A simple 1000sf starter home in a nice area.....

- a limit of 20 grand for a new car (and there has to be a decent down payment)

- And money saved every week...