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?)
Ok?
Great.
Here
we go…
~
~ ~ ~ ~
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.