You’re not saving enough (not that you could)


I’m warning you up front this essay is going to meander, and may possibly be a drifting collection of thoughts that might eventually come together as a connected run of ideas that make an actual point.

We’re going to talk about finances and more. (Yeah! Fun stuff. Am I right?)



Here we go…

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I’ve been seeing them again lately.

The news reports and articles and guest columnist links. All sharing the news and details and warnings from the rooftops about how we are failing as a group to save enough.

They tend to arrive without warning. At least, I haven’t seen a particular common element regarding why they show up. Saving money and unprepared household finances are not the lottery articles that repeat every time a jackpot crosses five hundred million dollars… not attached to specific holidays… not triggered by a certain team winning whatever championship… not paired with the latest theatrical release of this-or-that performer.

Still, in waves, we get them. Usually citing some random study from this school of business or that center or economic development, and offering claims meant to startle us that a high percentage of people are putting little to nothing aside for savings.

Let’s set up an imaginary income, shall we?

Someone making $15 an hour and working 40 hours per week is earning $600 per week, and that means $2,400 per month. (Yes. I know. Variables. Number of weeks in a year and overtime and more. A bit of reality added in a moment. Just establishing the basics for now. Back to that $2,400 per month.)

What do we need to live? Food, water, shelter, blah blah blah. Ok… how about this…

$1,000 per month can cover the taxes, insurance and mortgage payment for a decent house in many places.

$300 per month for a car payment.

$100 for utilities.

Without going any further, let’s pause for a moment. Because I can feel you already questioning my list, with a burning and building intensity to hit those variables and point out reality. Why already? Simple…

It’s possible that you’re wondering about a thousand a month for a house, when living alone you think you can find an apartment for less. (Perhaps even a furnished apartment with utilities included.) And, since you’ve had your car for ten years, it’s been a long time since you needed to worry about a car payment. That’s got to be swapped out for a different figure. First two items and you figure you could already save some significant dollars.

On the other side, a hundred for utilities? Just the oil and electricity are adding up to way above that each month.

Either way though—too high or too low—my numbers, according to you, have quickly and decisively demonstrated that while possible, they aren’t grounded in reality. And to that I say… exactly.

Yup. Exactly.

Because reality is the point.

I spent $1,400 out of an income of $2,400 just paying for rent, car, heat and some light in the house. While jumping up to point that out, did you consider what I hadn’t paid yet?

Taxes would be one thing. I didn’t make any contributions for medical benefits. Depending on how we set up our budget and break apart categories and line items, taxes and medical bills matter.

More to the everyday world, I didn’t put gas in my car. I didn’t put food in the fridge. Did you see a phone on my list of just three items? (I didn’t either. Also didn’t see Netflix or Hulu or internet or several other items that we could almost definitely agree need some bundle of representation.)

Lovely thing… reality.

We can go back and forth on every item and even extend into variable circumstances. What happens if we get two people together to share expenses? Are we living in a city where we can use subways and busses and don’t need a car? Are we living in a small town where many expenses come in at far lower costs? What about kids?

A couple living together… an apartment in the city… two kids and a total of four in the home… each of these items, along with countless others, are forms of reality. And the reason I get so frustrated when I see people trying to share shocking news about struggling finances… say about how an alarming number of people would have tremendous difficulties addressing an emergency need for a thousand dollars… is that I far too often I don’t think the people observing/reporting on it are starting with a grasp on reality.

We can wander all over the place, discuss the amazing economy and our retirement investments, and we still get led back to the same numbers. Watch…

I had started this essay when I saw a couple of articles that wandered down the roads we’ve viewed before. I shifted some of the material, trying to make it slightly different than material we’ve shared before. And then came two articles saying the exact same thing, in totally different ways, without referring to each other at all.

The first had a blurb saying forty-percent of Americans are wondering where the great economy is, since they aren’t experiencing it during a daily battle to meet their debts. Seemed to match up with the general idea I had been trying to work out here. So, I read it.

I won’t link to it. Turns out a significant portion is based on something we mentioned just a few paragraphs ago… that things may be fine on a day-to-day basis for a large group of people, but that same group would be swept under by the addition of an unexpected difficulty. (Read: car repairs, medical issues, etc. Doesn’t even need to be an emergency where a thousand dollars is required right now. Could just be something that swings the weekly/monthly bills, and trying to find an extra twenty, fifty or a hundred isn’t that easy when things are delicately balanced before the issue even arrived. One more shovel of dirt on an already teetering pile.)

A day later, totally different web site, and a blurb talking about forty percent struggling day-to-day. I clicked, curious to see if they were going to connect to what I had seen twenty-four hours earlier. Nope. This time, it pointed to rising prices for gas, and how just a few dollars more each time the tank on the car needed to be filled could easily be enough to tip the balance in the battle of the empty wallet.

About twenty years ago… and that’s short-changing it, since it was longer… the place where I worked gave out some raises to the staff. The really short version of elements in the story was this: (1) They had been in business for less than five years at the time, (2) competition was on the horizon, (3) the claim was that in part the raises weren’t exclusively raises, but also to at least a small degree designed to bring salaries in line with regional and national industry realities.

The end result was that several thousand people—yes, several thousand staff members—were celebrating an increase that averaged out to around a dollar an hour or more.

Exciting stuff.

For… oh… roughly… about a year.

Time dims the memories… meaning I can’t give you a notes-from-the-exact-dates recollection… but it didn’t take long for murmurs to begin swirling. And, about a year later, the joys of one raise had subsided and the cries looking for another had erupted. People had adjusted their lives, learned to spend the $40 a week or so on other things (we’ll be generous and think it was on other needs), and were looking for more.

Again, we need to consider that there is a huge variety of conditions and situations that would need to be considered. But, it did point out that people were capable of spending to their level of income. That in many circumstances it might not be so simple as saying living expenses are outrageous and hard to meet.

The end result is that the question often isn’t what’s right or wrong. It’s not about comparing the actions of some people to the actions of others. Honestly, that’s never the stuff that surprises me in these stories.

Instead, what usually gets me thinking is how it can be possible that others don’t recognize that people are different. In the general waters expressed in this essay, different in the way they live, different in the challenges that household expenses present, and different in even having the option (or, perhaps more accurately, the discipline) to put ten percent into some type of savings account.

This isn’t a debate about what should or shouldn’t be done. It’s not classifying things as smart or dumb or right or wrong. It’s about recognizing reality. And, in many cases, understanding that the reality may not be a result of making poor choices.

Do you have to help? Nope. Not at all. Do you need to feel sorry for people facing challenges? No. You do not. But I would advise you to be a bit careful on your side of the equation, and at least consider the notion that you might be viewing things with some blinders of your own.

Financial Jenga… your move.


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