Comment by DrCatbox | Hacker News Reader

Comment by DrCatbox | Hacker News Reader

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1. What the hell man, you dont make enough to spend within your means and not have to worry if you run out of cash by the end of the month!? I only use a debit card, because I know that if I even have to consider by the end of the month how much I have on the bank account, I am then doing something seriously wrong, either spending too much or my job is not bringing in the cash. And in Europe, among my friends, it seems this works out very well. Make enough cash so you dont have to worry, not make enough cash AND risk collecting debt (even for a few days) just because what, you want to feel you always can buy everything? I dont understand american mentality.

2. I have a rewards debit card, everything I buy at certain places gives me points and discounts at said places. Never going into debt.

3. interest-free loan? Thats a funny concept, coming from a bank especially. Are you serious?

Simply put, in Europe you make enough cash so at the end of the month you dont ever have to consider you will be in debt unless you want to buy a ferrari on your way back from work. You collect points using your debit card. Debt is only used for fancy house/apartement, brand new car to show off, or starting a business. Never for spending.

Money in the bank is lazy money that's not earning it's keep. In the US many checking accounts don't even earn interest, at all. Extra money at the end of the month should go into a savings account. Once that grows to a certain size, excess money should go into investments.

Money in a bank account is a costly asset.

Exactly. My checking account earns interest, but right now it's paltry because rates are so low. I have automatic transactions in place to move part of each paycheck into various savings and investment vehicles. I have calibrated it so that the only money left in my checking account is money that is budgeted to be spent that month. In my mind, that is what a checking account is for. In order to maximize the amount of money that's working for me instead of just sitting there, I have shaved it pretty close on the amount of money I leave in my checking account.

All of my regular bills (utilities, insurance, internet, cell phone, etc.) go on my credit card, and they are mostly clustered in the first part of the month. By using my credit card, I don't have to take that money out of my bank account until the end of the month, leaving me free to put money into savings and investment earlier in the month. If I were paying those bills directly out of my checking account, I would have to postpone my savings and investment transfers until later in the month to avoid going negative in my checking account.

> * Simply put, in Europe you make enough cash so at the end of the month you dont ever have to consider you will be in debt unless you want to buy a ferrari on your way back from work.*

I am from Europe and this is a completely ludicrous and false statement. If anything I would expect my USA counterparts to get way more salary after tax each month simply for the ridiculous taxes I am paying here (48%) plus we are paying some more taxes on ANYTHING we buy including food and water.

There is, however, a big difference between spending mentality - most Europeans shy away from going deep into debt and will typically only take loans on housing and cars but not to spend on luxury and entertainment; we by and large don't have that culture of ver-spending is ok and then keep shifting the debt from credit card to credit card. Matter of fact, I don't even know if VISA here would let me do that more than once...

Credit cards act as a buffer between steady salary income and patchy spending. Many people both in the US and Europe live within their means across the whole year, but take a big holiday or trip in the summer and spend more in one month than their usual disposable income. Having a credit card makes it easier to accommodate lumpy spending like that.

Food and water is cheaper in all the European countries I've been to -- all staple foods like milk, eggs, butter, vegetables, most meat, and most groceries, including bottled water (local!) which is $1.20 for a liter. Good bottled mineral water in the US costs $3-5 per liter, for example. I lived in Austria, spent lots of time in Germany, and have gone grocery shopping also in Italy and Portugal. (The UK is not "really" Europe in its laws, so I don't count it.)

As complex as this might be to actually measure, here is a stab at it - the Big Mac index seems to disagree: http://en.wikipedia.org/wiki/Big_Mac_Index#Figures

Big Macs barely qualify as food and are not a staple, or even remotely desirable to have your people eating.

Fast food and restaurant food is relatively expensive in Austria. Good, healthy, whole food ingredients are subsidized.

I am Austrian (born and raised) and am working in Germany now and have been around Europe and the world - what are those subsidies for food you are talking about? You probably mean the Austrian government and the EU are subsidizing local farmers?

Buying local farmer products will vary in cost and when you go to the supermarkets (Lidl, Aldi and Hofer EXcluded, their "food" is absolutely horrible) and buy organic food it definitely is expensive; a bit less in Austria than in Germany though really good and very delicious food is scarce in Germany in comparison. I found the food you can buy in the US cheaper when you go by price per unit since packages are way bigger there and you have a ton more to choose from.

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