I just read a scathing indictment of the Abrahamic head of household concept, by implication condemning the Washington Post personal finance guru Michelle Singletary’s fundamentalist Christian way of living. This straight-faced roundup of objectionable paternalistic policies aggravated me—as it was supposed to—but it also amused me. It describes the tyranny of the head of household in great detail. But it does not describe the weight of responsibility that lies on that head.
If you get to make all the decisions, then all the decisions and their outcomes are your fault. With great power comes great responsibility. Modern American men mostly are not under the illusion that women don’t look at them with critical eyes. Far the contrary. They know we are quite capable of analyzing and judging them, and finding them lacking. While I admit there are still plenty of stupid chauvinists around who genuinely believe that women are the mental and moral equivalent of dogs, most men know better. And even if a man is able to totally discount the opinions of his wife and daughters, the condemnation and hatred in his son’s eyes will eventually penetrate his thick skull.
As much as unilateral power over a household sounds appealing, there is terror involved. Men are tormented by their need to measure up to great expectations. Can I get it right? Can I keep my manhood—my job, my leadership role, whatever—and thus my reason for being the head of household? Can I make the right decisions? Can my decisions earn my family’s love? Can I make the world conform to what I need?
Most of the answers will be mixed, and that’s the number one reason to let the decision-making be mixed in a household, too. Whoever you are, you will not always pick the right electrician, or the right career, or the right words to say to your rebellious teenager. It’s a whole lot easier to sleep if your decisions are thoroughly mutual with your spouse. It’s fine to present a unilateral front to the world or to your relatives, but it is better to be a genuine team.
I shudder just as much as you do when employers talk all misty-eyed about teams, because work teams are usually the breeding ground of mediocrity, lack of responsibility, and in-fighting. But a family team has a reason to pull together and to make decisions and take actions that mutually benefit. In many families, if three or four people didn’t work, they couldn’t live in a comfortable home. Would it be better if just one, the father, did all the work, and the rest of the family stayed home and prettied up the place to his directions? No. Would it be better if the father ordered the others to work and to give him their paychecks? Of course not. They would have no incentive to keep working or to improve their job prospects. Or to stay in this household.
Incentive is the other half of the power situation. If one person holds all the power, the other’s incentive is naturally to resist. I can think of no clearer example than the typical situation with nursing home roommates. These are usually women who previously were in charge of their own households. Often women who have been solely in charge for years because they’ve been long widowed. That is the typical life expectancy of the American woman: widowed at 55, dead at 85 or so. These women move into nursing homes and immediately start bickering with their roommates because both of them are used to being the boss of their surroundings. Until and unless they reach a mutually satisfying rapprochement, they continue to fight. The blinds should be open. The blinds should be shut. The blinds should be up. The blinds should be down. The windows should be open. And on and on and on. You would think that at that time of life people would not be fighting for power and control. But they do. It’s a natural instinct.
So getting back to our Abrahamic household, the big problem is that if dad holds life and death power over everyone in it, they will struggle and resist that power. If law and custom won’t aid them, then their struggle simply goes underground, into sly manipulations. Who has not heard about seemingly obedient wives who secretly buy things and then hide them from their husbands? And why do you think that women have had the reputation since ancient times of being poisoners? Because poisoning is an undercover method of seizing power without giving the appearance of doing so.
Life is so much easier if we split up the power and the responsibility. Then men don’t die young from stress-induced heart attacks, and women don’t grow old resenting the men who had power over them. When we share the burdens of living, they truly are lighter. And there are fewer complaints along the way, too. If you pick the restaurant, then you get blamed if the food or service isn’t good. If the decision is mutually arrived at, you don’t. It’s that simple. Choose to share. It’s not only right; it’s the best way to negotiate the bumpy terrain of life.
Friday, February 19, 2010
Thursday, February 11, 2010
Don't Quit Your Day Job
Those words of wisdom are often spoken in the arts world, usually to talented people with big ambitions but as yet no big successes. But today, as I was reading Michelle Singletary’s personal finance blog at WashingtonPost.com, it came up in relation to a young woman about to have twins, who already has a young child. She plans to quit her $100,000-a-year job and stay home with the kids. Her husband, who also makes $100,000 a year, will support them all. It’s a lovely idea, but it’s a recipe for disaster.
Singletary rightly suggested they try to live on just his salary beforehand, to test it out. But I was unsatisfied with her answer, which seemed too encouraging of this plan. Talk of buying a practical used van to haul all the kids is fine, but you don’t start a period of lessened income by making a large investment in a depreciating asset (a car). And the couple would pay for it out of their savings, which are only $50,000.
I know, you say, $50,000 is a lot. But it’s only a quarter of what this couple currently earns per year. At the rate they are living today, it would be exhausted in three months. And if they buy a $25,000 minivan, their rainy day savings drop to a mere $25,000, enough to cover just one-and-a-half months. That’s not good enough for Suze Orman, who wants people to have eight months of living expenses in savings. And it’s not good enough for me, either. I know people who have been out of work over a year now. What makes this couple believe that they won’t need enough savings to last that long? Add in the cost of COBRA, which with three small children they must have, and the rainy day savings look like nothing.
Probably this couple is feeling overwhelmed by the thought of having twins, and who can blame them? But they need to get over that and focus on ensuring that they have sufficient income to raise their children. This young woman may think she has a secure career she can return to in the future, but these are uncertain times and I would not take a bet on it if she walks away. Her husband may have a secure career, but again, we’ve seen recently that few jobs today are 100% safe.
So what should they do? They can’t hold off on having the twins in order to build up savings; these babies are coming soon. This mother wants to be with her children, a natural desire, and not one I would deny her. She should negotiate with her employer to go from full-time to part-time, of course. If she is valued enough to be paid $100,000 a year, I suspect she has some leverage. And right now is the perfect moment to negotiate, because she can spare her company the expensive task of finding her replacement, something companies hate. She should work out an arrangement that has her in the office part of the week and at home the rest, or part days, or telecommuting, or whatever. As a key element of the deal, she should strive to maintain as much of her status and responsibilities as she can. Only by doing so will she remain a necessary employee. And along with her current seniority, she needs to keep her health coverage.
Assume the ideal, that this woman retains half of her job and salary. Who will look after the children? She and her husband will, but with household help. A woman earning $50,000 a year can afford to hire a housekeeper, nanny, baby sitter, or au pair, or any combination, on a part-time basis. Assume she pays $20,000 a year to various part-time helpers, what’s the advantage? First, the household has $30,000 more net income per year than if she simply quit. Second, the woman still has her job, that’s the big one. It’s a lot easier to go full-time again (or find a new job) if she’s regularly at the office and/or telecommuting. And if her husband loses his job, or they want to switch off, she can negotiate to take on extra work for extra pay, or go back to full-time work. A third advantage is that her husband will not feel resentful because she gets to stay home and “do nothing all day” while he still has to drag himself to an office. Nor will he be able to cop an attitude about how she’s just a housewife and not interesting anymore—not when she’s still in the workplace and dressing the part and meeting other men just as he meets other women. And remember, they’ll have $130,000 a year instead of $100,000, and the babies will have plenty of quality attention. The couple can buy that used minivan and still keep their $50,000 in rainy day savings. They’ll still have to make compromises with their lifestyle, but they won’t have to cut it to the bone.
Yes, my alternate scenario presumes a flexible employer, and most of us have had experiences with the other kind. But it can be done. The woman’s future earnings depend on staying in the game. You might reasonably ask why should this woman have to keep working? Raising three children is a full-time job in itself. True. But only by accepting a much reduced lifestyle on a permanent basis can this couple live on just the husband’s salary. That puts a lot of pressure on the husband, the kind of pressure that makes men die young—or run away. And meanwhile, the entire burden of tending three small children all day long falls on the wife. That’s a lot of pressure on her, too. Together, this woman and her husband currently earn $200,000 a year, well above the national average. They aren’t in an either/or situation; they just think they are. They can create their own mix and have the best of both worlds.
Singletary rightly suggested they try to live on just his salary beforehand, to test it out. But I was unsatisfied with her answer, which seemed too encouraging of this plan. Talk of buying a practical used van to haul all the kids is fine, but you don’t start a period of lessened income by making a large investment in a depreciating asset (a car). And the couple would pay for it out of their savings, which are only $50,000.
I know, you say, $50,000 is a lot. But it’s only a quarter of what this couple currently earns per year. At the rate they are living today, it would be exhausted in three months. And if they buy a $25,000 minivan, their rainy day savings drop to a mere $25,000, enough to cover just one-and-a-half months. That’s not good enough for Suze Orman, who wants people to have eight months of living expenses in savings. And it’s not good enough for me, either. I know people who have been out of work over a year now. What makes this couple believe that they won’t need enough savings to last that long? Add in the cost of COBRA, which with three small children they must have, and the rainy day savings look like nothing.
Probably this couple is feeling overwhelmed by the thought of having twins, and who can blame them? But they need to get over that and focus on ensuring that they have sufficient income to raise their children. This young woman may think she has a secure career she can return to in the future, but these are uncertain times and I would not take a bet on it if she walks away. Her husband may have a secure career, but again, we’ve seen recently that few jobs today are 100% safe.
So what should they do? They can’t hold off on having the twins in order to build up savings; these babies are coming soon. This mother wants to be with her children, a natural desire, and not one I would deny her. She should negotiate with her employer to go from full-time to part-time, of course. If she is valued enough to be paid $100,000 a year, I suspect she has some leverage. And right now is the perfect moment to negotiate, because she can spare her company the expensive task of finding her replacement, something companies hate. She should work out an arrangement that has her in the office part of the week and at home the rest, or part days, or telecommuting, or whatever. As a key element of the deal, she should strive to maintain as much of her status and responsibilities as she can. Only by doing so will she remain a necessary employee. And along with her current seniority, she needs to keep her health coverage.
Assume the ideal, that this woman retains half of her job and salary. Who will look after the children? She and her husband will, but with household help. A woman earning $50,000 a year can afford to hire a housekeeper, nanny, baby sitter, or au pair, or any combination, on a part-time basis. Assume she pays $20,000 a year to various part-time helpers, what’s the advantage? First, the household has $30,000 more net income per year than if she simply quit. Second, the woman still has her job, that’s the big one. It’s a lot easier to go full-time again (or find a new job) if she’s regularly at the office and/or telecommuting. And if her husband loses his job, or they want to switch off, she can negotiate to take on extra work for extra pay, or go back to full-time work. A third advantage is that her husband will not feel resentful because she gets to stay home and “do nothing all day” while he still has to drag himself to an office. Nor will he be able to cop an attitude about how she’s just a housewife and not interesting anymore—not when she’s still in the workplace and dressing the part and meeting other men just as he meets other women. And remember, they’ll have $130,000 a year instead of $100,000, and the babies will have plenty of quality attention. The couple can buy that used minivan and still keep their $50,000 in rainy day savings. They’ll still have to make compromises with their lifestyle, but they won’t have to cut it to the bone.
Yes, my alternate scenario presumes a flexible employer, and most of us have had experiences with the other kind. But it can be done. The woman’s future earnings depend on staying in the game. You might reasonably ask why should this woman have to keep working? Raising three children is a full-time job in itself. True. But only by accepting a much reduced lifestyle on a permanent basis can this couple live on just the husband’s salary. That puts a lot of pressure on the husband, the kind of pressure that makes men die young—or run away. And meanwhile, the entire burden of tending three small children all day long falls on the wife. That’s a lot of pressure on her, too. Together, this woman and her husband currently earn $200,000 a year, well above the national average. They aren’t in an either/or situation; they just think they are. They can create their own mix and have the best of both worlds.
Monday, February 1, 2010
My FICO or Yours?
What the FICO score measures and how the information is weighted:
1. Payment history 35%
2. Outstanding balances 30%
3. Length of credit history 15%
4. New credit 10%
5. Types of credit 10%
There it is, the formula that rules our lives these days. You do not need to pay for your FICO score, ever. All you need do is honestly survey your performance, based on each of these measures:
1. Pay bills on time?
2. Keep the amount of credit being used low?
3. Longtime cardholder or newbie?
4. Recent attempts to get new credit?
5. A mix of types of accounts?
Very obviously, paying your bills on time is the key. Its weight is over one-third of the total score. That means a single late payment is over three times more significant than your mix of credit lines, or the fact that you went car shopping and five dealerships pulled your credit score, or your status as someone new to credit or someone with decades-old accounts.
Pay bills on time. No need to pay FICO to learn this.
1. Payment history 35%
2. Outstanding balances 30%
3. Length of credit history 15%
4. New credit 10%
5. Types of credit 10%
There it is, the formula that rules our lives these days. You do not need to pay for your FICO score, ever. All you need do is honestly survey your performance, based on each of these measures:
1. Pay bills on time?
2. Keep the amount of credit being used low?
3. Longtime cardholder or newbie?
4. Recent attempts to get new credit?
5. A mix of types of accounts?
Very obviously, paying your bills on time is the key. Its weight is over one-third of the total score. That means a single late payment is over three times more significant than your mix of credit lines, or the fact that you went car shopping and five dealerships pulled your credit score, or your status as someone new to credit or someone with decades-old accounts.
Pay bills on time. No need to pay FICO to learn this.
Sunday, January 17, 2010
Debtors Who Are Clueless--And Scary
I just saw a television show called "Til Debt Do Us Part." Two episodes, back-to-back. What amazed me, really floored me, was how casually two different young women approached their debt. They claimed they did not know why they had no money. And on salaries of $45k a year, not including their men's incomes, they felt entitled to spend on anything and everything they saw or wanted. One of them was even living rent-free, but still managed to get deeply into debt. Even after family paid off her debts, she racked them up again.
This is crazy behavior. But the frightening thing was that both of these women behaved in pretty much the same manner: as if a credit card was their license to spend. And they were unapologetic about it. There was very clear self-will at work. Both women also browbeat their husbands, keeping them from exercising any decision power over how the household money was spent. The host took the men to task for using domestic peace as the excuse for enabling their women to overspend. But in my opinion, the women were the ones who needed a sharp dose of reality.
How can people be so clueless about their own money that they do not notice they spend thousands more per month than they bring in? What part of the brain shuts off to allow this craziness? And how can we turn it back on and save these people and others from an endless cycle of debt and rescue, debt and rescue?
I’m asking because I don’t have the answer. People with chronic debt problems must wall off their fears, their shame and guilt, from their daily lives and thoughts. How else can a person with $100,000 in debt dare to charge another unnecessary $20? You’d need a powerful firewall, but more and more, it seems as if people in our society have just that. Perhaps they feel no shame at all. Perhaps they believe that they will always be rescued by others, or by new legislation, or by bankruptcy, or by windfalls. Perhaps their future plan is to win the lottery. I don’t know.
What is obvious to me is that too many people are brazenly selfish even while behaving in a self-destructive manner. What the host pointed out was that if these people continued to spend as they did, within a few years they would owe hundreds of thousands of dollars. More than a house costs, and yet they would not have a house. They are ruining their future while indulging their todays. Big time. They’re all living like the grasshopper in the fable. But winter does eventually come, and where is the preparedness we need to survive tough times?
Don’t we all have moments when we are these silly people? When we know we’re behaving foolishly with money and credit, but we do it anyway? Yes, and that’s what is scariest of all. You don’t have to be perpetually in denial as these two women were to be in scary, intractable debt. All you need to do is have flashes of ignoring your reality. A few minutes here and there, and you can throw away another few hundred or thousand dollars without even noticing.
It’s got to stop. We’re the richest country in the world, with more individuals having significant money beyond a bare subsistence living than in any civilization that ever existed. And we’re throwing our wealth away on trifles.
This is crazy behavior. But the frightening thing was that both of these women behaved in pretty much the same manner: as if a credit card was their license to spend. And they were unapologetic about it. There was very clear self-will at work. Both women also browbeat their husbands, keeping them from exercising any decision power over how the household money was spent. The host took the men to task for using domestic peace as the excuse for enabling their women to overspend. But in my opinion, the women were the ones who needed a sharp dose of reality.
How can people be so clueless about their own money that they do not notice they spend thousands more per month than they bring in? What part of the brain shuts off to allow this craziness? And how can we turn it back on and save these people and others from an endless cycle of debt and rescue, debt and rescue?
I’m asking because I don’t have the answer. People with chronic debt problems must wall off their fears, their shame and guilt, from their daily lives and thoughts. How else can a person with $100,000 in debt dare to charge another unnecessary $20? You’d need a powerful firewall, but more and more, it seems as if people in our society have just that. Perhaps they feel no shame at all. Perhaps they believe that they will always be rescued by others, or by new legislation, or by bankruptcy, or by windfalls. Perhaps their future plan is to win the lottery. I don’t know.
What is obvious to me is that too many people are brazenly selfish even while behaving in a self-destructive manner. What the host pointed out was that if these people continued to spend as they did, within a few years they would owe hundreds of thousands of dollars. More than a house costs, and yet they would not have a house. They are ruining their future while indulging their todays. Big time. They’re all living like the grasshopper in the fable. But winter does eventually come, and where is the preparedness we need to survive tough times?
Don’t we all have moments when we are these silly people? When we know we’re behaving foolishly with money and credit, but we do it anyway? Yes, and that’s what is scariest of all. You don’t have to be perpetually in denial as these two women were to be in scary, intractable debt. All you need to do is have flashes of ignoring your reality. A few minutes here and there, and you can throw away another few hundred or thousand dollars without even noticing.
It’s got to stop. We’re the richest country in the world, with more individuals having significant money beyond a bare subsistence living than in any civilization that ever existed. And we’re throwing our wealth away on trifles.
Sunday, January 10, 2010
New Year, Same Old Debt
Someone I know is in credit card debt again. The person was in a similar situation several years ago. At the time, I was able to help the person get out of it. I also tried to model the habit of making the regular, on-time payments that creditors like. I stressed this as the number one rule. But it did not stick. My friend’s credit score (FICO) is very low, so a car loan has been denied—which is bad, considering those are secured loans and they could just come get the car, so what’s the risk? My friend is flummoxed. But unrepentant, I suspect.
I wonder how many of us really change our disastrous financial habits for better ones? Or, after we recover from a dangerous low period, do we limp along, much in the same manner as before, slowly but surely ramping up our mistakes? Worst of all, paying little or no attention to what others want from us? The friend is indignant about the car loan, citing having paid off a car loan from that very bank a few years ago. But that was then, and this is now. Missing scheduled payments is one of the classic signs of shaky financial stability. The bank fears that the car loan will not be paid back, and the bank does not need a car; my friend does. The bank is understandably wary of lending in this scenario.
Of course this situation would be different if my friend had a good, steady job. (Pause to laugh hysterically.) Right. Like that’s happening anytime soon. So what can be done? Does my friend even have enough money to make regular minimum payments? And assuming so, how quickly can my friend’s credit score be rebuilt—again!—in this rocky economy? Would six months of perfect, on-time payments make a difference? Or will it take a year or more to climb out of this pit? And to what lengths must my friend go to fix things? Sell something major that would be painful to part with? Live without a car for a year? Or two?
Or is this simply an organizational issue? Some adults have serious attention deficit issues. Serious. They collect too much paper and they can’t seem to open their bills promptly (or even their bank statements) and they never are able to put everything in one place neatly so they can find it again. My friend is but one of thousands, if not millions, of these people. They’re more likely to buy a new set of storage containers or get a new checking account than to put all documents in one place or balance their existing checking account. And these people, these thousands if not millions, are walking around as supposed functioning adults. They’re being allowed, even encouraged, to sink deeply into debt through systems that work for people like me (Little Miss Organized), but never work for them. Unless they are very lucky, their chronic inability to cope makes them the financial dupes of the banks and every other financial transaction.
Some of these people are married to spouses who can handle money sensibly. Or even to spouses who can’t, but who earn enough to keep everything covered. But some people are alone and trying to deal with words on papers from financial institutions that they simply do not understand. They don’t understand the words. Or the banks. Banks don’t really care about your payment record of ten years ago. They care about your recent payment record. They’d also prefer that you have substantial income and assets—and that you do not need the loan you want. That’s right: banks prefer to lend to people who don’t actually need their money. If Warren Buffet asks for a loan, he’s going to get it. Or Bill Gates. You and me? Not so much.
The bottom line with financial hassles always comes back to paying attention. My friend will now have to enter into a penitent period of being very careful to make all scheduled payments on time. I’m sure my friend will do it, too, because the danger and excitement of this situation will be a constant reminder. For a while. And then, the ennui with paying attention to numbers will rise again. And the trouble will start all over.
I don’t know the answer to this one. Spend less money than you earn? Sure, but if you don’t pay your bills on time, that’s irrelevant. Pay cash for everything? That plan does not get the electric bill paid on time. Go off the grid? Okay, now you’re just being silly. The buy-in for going off the grid is very steep. Who has that kind of money—without getting a bank loan?
I wonder how many of us really change our disastrous financial habits for better ones? Or, after we recover from a dangerous low period, do we limp along, much in the same manner as before, slowly but surely ramping up our mistakes? Worst of all, paying little or no attention to what others want from us? The friend is indignant about the car loan, citing having paid off a car loan from that very bank a few years ago. But that was then, and this is now. Missing scheduled payments is one of the classic signs of shaky financial stability. The bank fears that the car loan will not be paid back, and the bank does not need a car; my friend does. The bank is understandably wary of lending in this scenario.
Of course this situation would be different if my friend had a good, steady job. (Pause to laugh hysterically.) Right. Like that’s happening anytime soon. So what can be done? Does my friend even have enough money to make regular minimum payments? And assuming so, how quickly can my friend’s credit score be rebuilt—again!—in this rocky economy? Would six months of perfect, on-time payments make a difference? Or will it take a year or more to climb out of this pit? And to what lengths must my friend go to fix things? Sell something major that would be painful to part with? Live without a car for a year? Or two?
Or is this simply an organizational issue? Some adults have serious attention deficit issues. Serious. They collect too much paper and they can’t seem to open their bills promptly (or even their bank statements) and they never are able to put everything in one place neatly so they can find it again. My friend is but one of thousands, if not millions, of these people. They’re more likely to buy a new set of storage containers or get a new checking account than to put all documents in one place or balance their existing checking account. And these people, these thousands if not millions, are walking around as supposed functioning adults. They’re being allowed, even encouraged, to sink deeply into debt through systems that work for people like me (Little Miss Organized), but never work for them. Unless they are very lucky, their chronic inability to cope makes them the financial dupes of the banks and every other financial transaction.
Some of these people are married to spouses who can handle money sensibly. Or even to spouses who can’t, but who earn enough to keep everything covered. But some people are alone and trying to deal with words on papers from financial institutions that they simply do not understand. They don’t understand the words. Or the banks. Banks don’t really care about your payment record of ten years ago. They care about your recent payment record. They’d also prefer that you have substantial income and assets—and that you do not need the loan you want. That’s right: banks prefer to lend to people who don’t actually need their money. If Warren Buffet asks for a loan, he’s going to get it. Or Bill Gates. You and me? Not so much.
The bottom line with financial hassles always comes back to paying attention. My friend will now have to enter into a penitent period of being very careful to make all scheduled payments on time. I’m sure my friend will do it, too, because the danger and excitement of this situation will be a constant reminder. For a while. And then, the ennui with paying attention to numbers will rise again. And the trouble will start all over.
I don’t know the answer to this one. Spend less money than you earn? Sure, but if you don’t pay your bills on time, that’s irrelevant. Pay cash for everything? That plan does not get the electric bill paid on time. Go off the grid? Okay, now you’re just being silly. The buy-in for going off the grid is very steep. Who has that kind of money—without getting a bank loan?
Thursday, December 24, 2009
I'm Having a Semi-Stressed Christmas, How About You?
First of all, I was baptized and raised as a Christian, so I call it Christmas and always will think of it as Christmas. It’s not “the holidays” to me. It’s the season for Christmas lights and Christmas decorations and a Christmas tree and even some Christmas carols. Including “Adeste Fideles.” That’s my personal heritage.
However, more and more, Christmas is simply a time of year when I try to do the minimum that is socially acceptable, and bag the rest of it. Our family situation is that none of us gives gifts anymore. Lack of vast amounts of money to waste, lack of lots of young children who hope for presents, and also, lack of false pride. I am proud to say that my family members (and friends) don’t try to front with each other, or pressure each other into a spiral of unwise spending. Some of us give a gift or two informally, but these are all modest (under $15) and casually delivered at random moments. A book, a calendar, that sort of thing. There is no more presents-under-the-tree ceremony. I’ll miss it. I was the last holdout, for years carefully shopping and then going into orgies of wrapping. But no more. I didn’t buy any gift wrap in 2009 and I’ve got plenty left from prior years. Only there’s nothing to wrap. It’s over, and I’m not fighting reality.
My major stress originates with the traditional holiday baking. I’m still baking cookies and pies and tarts (yes, of course I make all these from scratch). But it’s a struggle against reality. Everybody I know is dieting or else does not want to eat officially unhealthy foods (white flour, white and brown sugar, real butter). So who is there left to bake for? And as for ingredients, I’ve tried whole wheat flour in several incarnations and it makes a lousy cookie. I’ve experimented with cutting sugar and fats, replacing them with nothing or with applesauce or whatever, and that produces a lousy brownie with the heft of a chiffon cake. (Never heard of a chiffon cake? Too bad you missed the 1950s. They had desserts then. With frosting.) And there is the hassle of replacing sugar with supposedly safe substitutes only to discover that there isn’t a substitute that someone on the Web isn’t claiming is toxic. And don’t get me started on baking with substitutes for wheat flour. There’s not much joy left in this traditional Christmas endeavor except the physical pleasure of handling the ingredients and making something edible out of them. Which no one wants to eat. In the next few years, I may finally stop baking entirely.
But even though I am not buying Christmas presents, and the baking is tailing off, I am still spending money regardless of my cash flow, and that of course causes stress. I bought a new lawn tractor this week. My 20-year-old Craftsman tractor was pronounced dead at last. So now I have a new one. Brakes that work! An engine that doesn’t smoke! A mower deck that doesn’t drag on the ground! This winter will be fun. I use the tractor all season to haul wood, so that’s why I bought it now.
Unfortunately, a lawn tractor is expensive. Start at $1,000 and go up, way up. I didn’t. Go up, that is. My John Deere dreams are fated to remain fantasies, I fear. I went for low-end practical and no frills. And yet another credit card balance transfer in my future again, I expect. This is not my ideal way of paying for major purchases, but in this economy, considering my cash flow (and those still locked-up CDs I won’t be able to and am not willing to touch for months) it is practical. What I find humorous about it this time around is that Sears was not offering a six-month or one-year payment plan as they often do, and which their employees told me is offered through Citibank. So when I get the bill and I balance transfer this to one of my credit cards, Citibank won’t be in the running. (Because it would be in effect a Citi-to-Citi transfer, and they don’t allow them.) Citi’s rivals will get my balance transfer fee. It would have been smarter for Citibank to offer that six-month deal directly through Sears, but huge corporations aren’t very flexible even when there is an easy profit to be made. They are massive and I am not, and they won’t make any adjustments for me.
That’s why I am content to work this system in my favor as I can, and will feel no sadness or guilt when our government finally, years from now, allows Citibank and its ilk to die. Or Sears goes the way of other classic American corporations. Compare them to ocean liners if you will. Eventually too big to move with agility. Hard to slow down or turn around. A dying breed, or rather, a product that was once cutting edge and now is merely specialized (cruise ships, oil tankers, and container ships). Even though I still do use credit, I can see our mammoth credit systems coming to a natural end of their cycle and with it their ruthless hegemony over us. What comes next I can’t guess. But something will, and I won’t shed a single tear when it happens.
I’m much more likely to sigh over not baking apple pies anymore.
However, more and more, Christmas is simply a time of year when I try to do the minimum that is socially acceptable, and bag the rest of it. Our family situation is that none of us gives gifts anymore. Lack of vast amounts of money to waste, lack of lots of young children who hope for presents, and also, lack of false pride. I am proud to say that my family members (and friends) don’t try to front with each other, or pressure each other into a spiral of unwise spending. Some of us give a gift or two informally, but these are all modest (under $15) and casually delivered at random moments. A book, a calendar, that sort of thing. There is no more presents-under-the-tree ceremony. I’ll miss it. I was the last holdout, for years carefully shopping and then going into orgies of wrapping. But no more. I didn’t buy any gift wrap in 2009 and I’ve got plenty left from prior years. Only there’s nothing to wrap. It’s over, and I’m not fighting reality.
My major stress originates with the traditional holiday baking. I’m still baking cookies and pies and tarts (yes, of course I make all these from scratch). But it’s a struggle against reality. Everybody I know is dieting or else does not want to eat officially unhealthy foods (white flour, white and brown sugar, real butter). So who is there left to bake for? And as for ingredients, I’ve tried whole wheat flour in several incarnations and it makes a lousy cookie. I’ve experimented with cutting sugar and fats, replacing them with nothing or with applesauce or whatever, and that produces a lousy brownie with the heft of a chiffon cake. (Never heard of a chiffon cake? Too bad you missed the 1950s. They had desserts then. With frosting.) And there is the hassle of replacing sugar with supposedly safe substitutes only to discover that there isn’t a substitute that someone on the Web isn’t claiming is toxic. And don’t get me started on baking with substitutes for wheat flour. There’s not much joy left in this traditional Christmas endeavor except the physical pleasure of handling the ingredients and making something edible out of them. Which no one wants to eat. In the next few years, I may finally stop baking entirely.
But even though I am not buying Christmas presents, and the baking is tailing off, I am still spending money regardless of my cash flow, and that of course causes stress. I bought a new lawn tractor this week. My 20-year-old Craftsman tractor was pronounced dead at last. So now I have a new one. Brakes that work! An engine that doesn’t smoke! A mower deck that doesn’t drag on the ground! This winter will be fun. I use the tractor all season to haul wood, so that’s why I bought it now.
Unfortunately, a lawn tractor is expensive. Start at $1,000 and go up, way up. I didn’t. Go up, that is. My John Deere dreams are fated to remain fantasies, I fear. I went for low-end practical and no frills. And yet another credit card balance transfer in my future again, I expect. This is not my ideal way of paying for major purchases, but in this economy, considering my cash flow (and those still locked-up CDs I won’t be able to and am not willing to touch for months) it is practical. What I find humorous about it this time around is that Sears was not offering a six-month or one-year payment plan as they often do, and which their employees told me is offered through Citibank. So when I get the bill and I balance transfer this to one of my credit cards, Citibank won’t be in the running. (Because it would be in effect a Citi-to-Citi transfer, and they don’t allow them.) Citi’s rivals will get my balance transfer fee. It would have been smarter for Citibank to offer that six-month deal directly through Sears, but huge corporations aren’t very flexible even when there is an easy profit to be made. They are massive and I am not, and they won’t make any adjustments for me.
That’s why I am content to work this system in my favor as I can, and will feel no sadness or guilt when our government finally, years from now, allows Citibank and its ilk to die. Or Sears goes the way of other classic American corporations. Compare them to ocean liners if you will. Eventually too big to move with agility. Hard to slow down or turn around. A dying breed, or rather, a product that was once cutting edge and now is merely specialized (cruise ships, oil tankers, and container ships). Even though I still do use credit, I can see our mammoth credit systems coming to a natural end of their cycle and with it their ruthless hegemony over us. What comes next I can’t guess. But something will, and I won’t shed a single tear when it happens.
I’m much more likely to sigh over not baking apple pies anymore.
Thursday, December 3, 2009
The Money Rehab Spa
Wouldn't it be great? You'd sign up for a stay at the money rehab spa, and trainers would teach you how to deal with your money. All aspects. You'd get lessons on making your paycheck last. Lessons on not letting your cash drain away on frivolous daily extras. Lessons on how to properly use ATMs so you still have the rent money by the end of the month.
They'd bring in experts to explain exactly how behavioral psychologists play on your feelings to get you to buy bigger houses, cars, and wardrobes than you need. Fashion professionals would let you in on the secrets behind making your clothes look "so last year." Electronics nerds would teach you how not to get suckered into constantly upgrading your equipment.
And then you'd role play so you'd gain the confidence to go shopping for the things you need without getting ambushed by tempting marketing tricks. You'd also practice telling relatives that you won’t attend their ruinously expensive destination weddings, as well as turning down other social occasions designed to part you from a huge chunk of your money, like rent parties or showers where you pay for everything. You'd get tips on how to politely say no to your best friend's network marketing sales pitch or wonderful stock market tip--without wrecking the friendship. As a bonus, you'd be coached to negotiate buying a car and getting a fair price.
After a long day of learning all the dos and don'ts about your money, you'd relax in the evening secure in the knowledge that no bill collectors would call, no shifty friends or relatives would press you to loan them money, and you would be totally safe from any retail marketing ploys. Heaven!
The next day, you'd get up and do more of the same, until it becomes second nature to save your money, spend it wisely, and resist pressures by others to part with it foolishly. It all sounds so wonderful.
And nonexistent, alas. We don’t have money rehab spas. But we should. If you would like to be in control of your finances instead of feeling confused, helpless, or under attack, you can create your own personal version of a money rehab spa. Start by determining a time frame between one week and one month. Experts say it takes a few weeks to learn a new habit. Internet challenges often run for a month, and you might want to find some online buddies to whom you can report your successes and insights during your home rehab spa stay. Or get them to join you. Or you could start a journal or blog. You probably won’t have the luxury of getting away from your usual work or family responsibilities, but you can decide that all of your slender spare time for two weeks or even a month will go to your money rehab.
Next, outline your rehab program and gather your supporting materials. Because I am a reader and a writer, naturally I am going to suggest that you borrow a stack of books on personal finance from your local library or your friends. Then there are the television and radio programs that address personal finance issues. Record a batch. If you are lucky enough to have some regular programming on this topic, consider writing it into your rehab plan: “Saturday night, watch Suze Orman,” for instance, or “Monday night, watch Hoarders.” If crashing the Internet looking for frugal websites and money tips sounds more appealing, then put that on the agenda instead. Not every resource you collect for your money rehab will speak to you. Some will be disappointing, or concentrate on people whose circumstances are too different. That’s why it’s best to stockpile more than you can get through in the time you have set aside. If a resource annoys you, you can drop it and go on to the next.
Then you begin. Even if you only have one hour in a day to spare for your money rehab, put that hour to studying personal finance in whatever medium works best for you. Vary them. Read a chapter of a book in the morning, grab a few minutes of a television show late in the evening, and snatch some Internet time at lunch. If you can catch a few more minutes to listen or read during the day, so much the better.
Advice is not one-size-fits-all (the late great Erma Bombeck said that was the biggest lie ever invented). As you review the many excellent attempts to teach you about personal finance, slowly but surely you will gain a sense of what changes might fit your specific circumstances. There is no one right way to run your own personal economy. But there is a general direction in which you want to head, and that direction is financial control. This does not mean that you will never have any money worries; life happens. But you will have gained valuable knowledge and tools to help you chart your own course through the often confusing mishmash that is the American financial system.
Sadly, your self-made money rehab spa won’t have mud baths and massages. Even so, you will emerge from your self-made spa experience invigorated, better able to cope, and with luck, on the road to shaking your addiction to random spending. And that’s what rehab is all about, isn’t it? Breaking addictions and showing people a better way to live.
Spa time, anyone?
They'd bring in experts to explain exactly how behavioral psychologists play on your feelings to get you to buy bigger houses, cars, and wardrobes than you need. Fashion professionals would let you in on the secrets behind making your clothes look "so last year." Electronics nerds would teach you how not to get suckered into constantly upgrading your equipment.
And then you'd role play so you'd gain the confidence to go shopping for the things you need without getting ambushed by tempting marketing tricks. You'd also practice telling relatives that you won’t attend their ruinously expensive destination weddings, as well as turning down other social occasions designed to part you from a huge chunk of your money, like rent parties or showers where you pay for everything. You'd get tips on how to politely say no to your best friend's network marketing sales pitch or wonderful stock market tip--without wrecking the friendship. As a bonus, you'd be coached to negotiate buying a car and getting a fair price.
After a long day of learning all the dos and don'ts about your money, you'd relax in the evening secure in the knowledge that no bill collectors would call, no shifty friends or relatives would press you to loan them money, and you would be totally safe from any retail marketing ploys. Heaven!
The next day, you'd get up and do more of the same, until it becomes second nature to save your money, spend it wisely, and resist pressures by others to part with it foolishly. It all sounds so wonderful.
And nonexistent, alas. We don’t have money rehab spas. But we should. If you would like to be in control of your finances instead of feeling confused, helpless, or under attack, you can create your own personal version of a money rehab spa. Start by determining a time frame between one week and one month. Experts say it takes a few weeks to learn a new habit. Internet challenges often run for a month, and you might want to find some online buddies to whom you can report your successes and insights during your home rehab spa stay. Or get them to join you. Or you could start a journal or blog. You probably won’t have the luxury of getting away from your usual work or family responsibilities, but you can decide that all of your slender spare time for two weeks or even a month will go to your money rehab.
Next, outline your rehab program and gather your supporting materials. Because I am a reader and a writer, naturally I am going to suggest that you borrow a stack of books on personal finance from your local library or your friends. Then there are the television and radio programs that address personal finance issues. Record a batch. If you are lucky enough to have some regular programming on this topic, consider writing it into your rehab plan: “Saturday night, watch Suze Orman,” for instance, or “Monday night, watch Hoarders.” If crashing the Internet looking for frugal websites and money tips sounds more appealing, then put that on the agenda instead. Not every resource you collect for your money rehab will speak to you. Some will be disappointing, or concentrate on people whose circumstances are too different. That’s why it’s best to stockpile more than you can get through in the time you have set aside. If a resource annoys you, you can drop it and go on to the next.
Then you begin. Even if you only have one hour in a day to spare for your money rehab, put that hour to studying personal finance in whatever medium works best for you. Vary them. Read a chapter of a book in the morning, grab a few minutes of a television show late in the evening, and snatch some Internet time at lunch. If you can catch a few more minutes to listen or read during the day, so much the better.
Advice is not one-size-fits-all (the late great Erma Bombeck said that was the biggest lie ever invented). As you review the many excellent attempts to teach you about personal finance, slowly but surely you will gain a sense of what changes might fit your specific circumstances. There is no one right way to run your own personal economy. But there is a general direction in which you want to head, and that direction is financial control. This does not mean that you will never have any money worries; life happens. But you will have gained valuable knowledge and tools to help you chart your own course through the often confusing mishmash that is the American financial system.
Sadly, your self-made money rehab spa won’t have mud baths and massages. Even so, you will emerge from your self-made spa experience invigorated, better able to cope, and with luck, on the road to shaking your addiction to random spending. And that’s what rehab is all about, isn’t it? Breaking addictions and showing people a better way to live.
Spa time, anyone?
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