Times are tough. I do not envy my kids, who are fresh out of school and trying to make their way during the worst recession that my generation has ever experienced. It is only natural for us to want to lend them a hand, wrap them in a cocoon, and protect them from the cold, cruel world. But if we do that, are we really helping them, or are we just making ourselves feel better? The more I think about it, the more I believe that we help them most by teaching them to deal with the reality of now.
My parents were once living high on the hog. Dad owned a thriving business, and they were spending the money as fast as he could rake it in. I seem to remember, faintly, that they were both very nice, cheerful people back then. But, life hit a snag, as so often happens. Dad lost his business and had to go to work for a friend. They sold their lovely home and moved into something smaller, and borrowed from friends to pay off debts and avoid bankruptcy. It shocked me, when I started counting back just now, to realize that they were only about 37 when this happened. They still had a good 40 or 50 years ahead of them, and could have rebuilt a wonderful life together, but they were never able to face the reality of now. They spent the rest of their lives pining for what they had lost, trying to keep up appearances, punishing one another, and making themselves and everyone around them absolutely miserable.
So, here is my advice to any of you who are beginning to feel the pinch. Learn to live in the reality of now. Do not spend according to what you hope to earn one day, or what you might have earned before, or what your parents earned, or even what you think you deserve to be earning. Deal with the here and now, for that is the only way to keep from digging a hole that you may never manage to crawl out from.
Most Important Financial Advice You Will Ever Receive: Spend less than you bring in! Why? Because shit always happens. There will always be a leaky roof to deal with, bald tires or a busted water heater to be replaced, health emergencies and vet bills, and any number of other things that can go wrong. Count on it! If you spend every penny you make during the good times, and don't set a bit aside each month, then you will end up having to put the emergencies on credit cards, and each time you do this, your hole will get deeper and deeper.
Now, a lot of you are probably thinking "Well, that's easy for her to say! She leads a charmed life, and doesn't have a clue what it's like not to earn enough to even meet your basic needs!" Well, maybe so, but I promise you, it wasn't always this way. I was pretty much self-supporting from the day I turned 16 and landed my first job. I put myself through college with no help from anyone, by saving every penny I earned each summer and juggling different jobs on campus during the school year. And yes, my husband has always been a good earner, that much is true. But he's not so good, I'm afraid, at holding on to what he earns. I, on the other hand, am the exact opposite - a lousy earner, but a whiz at holding onto it, socking it away, and making it stretch - another reason we make such a good match!
So, back to the reality of now. If you are not currently earning more than you spend each month, you really have only two choices: figure out a way to spend less, or figure out a way to bring in more. Sound impossible? Well yes, I suppose it might, but if you are willing to make a few "lifestyle" adjustments, and are determined to ride this out and end up in a better place down the road, there is quite a bit you can do. Take it from my daughter, Alexis. Lex is an interior designer out in southern California. As you can imagine, design services are not in high demand amongst those who are being foreclosed upon, so times are tough for Miss Alexis and her cohorts. Fortunately, adversity seems to bring out her spunk and determination. The first thing she had to do was re-define "necessity": shelter, basic nutritious food, decent healthcare, library card, paying off debt? All absolutely necessary! Fourbucks coffee, travel, restaurants, movie theatres, alcohol and cigarettes, buying new books, clothing and accessories, fancy phones and cable TV, having a house or apartment to oneself, or even working only 40 hrs. per week, or holding down only one job ? Definitely not! (See disclaimer in comments below) Then she made another discovery - it's amazing what you can get, simply for the asking:
- got a 20% low-income-family discount on her electricity bill
- asked for company-paid health insurance in lieu of a raise after the first year with her present company, reducing her payment from $80/mo. to $0
- called AIS for quotes on car insurance, and reduced her payment by $20/mo.
- called her cable/internet provider, and asked them to peel her service down to basic cable, no tivo box, downgraded internet (but not down to dial-up) and got a temporary discount, reducing her bill by $40 per month
- got a customer loyalty package from her cell phone provider, with less minutes and texting, which she rarely used anyway, and reduced her bill by $40/mo.
- stopped going to movies, and reduced her Netflix down to the minimum number of DVDs at once
- started cooking at home more, buying more "real" food and less processed, and started taking lunches more often, reducing her food bill by at least $50/mo.
This is just the beginning though, for I'm sure there are a million other ways to cut back, without sacrificing happiness. When we lived in Indonesia we had plenty of money, but nowhere to spend it, so we had to make our own fun. Believe you me, I wouldn't trade those impromptu parties where we played cards or charades and had simple refreshments made from scratch, or movie nights when the whole community got together to watch a video, for all the noisy theme restaurants and mega-movie theatres in the world. When one of my favorite bloggers got married, her mother told her "You are never too poor to entertain friends. One can always afford to make a big bowl of popcorn, fix a pitcher of tea or lemonade, and pull out a deck of cards or a game." I'd say her mom was one smart cookie!
I've heard of people renting out a spare room or garage apartment, or leasing their home out temporarily, and moving into someplace less expensive. Others are planting Victory gardens, to supplement their food budget and reduce their carbon footprint. Some are paring down to only one car, and ridding themselves of the things they no longer need, like those extra sets of china and fancy silver and crystal that haven't been out of the cabinets in years. There's a great shop in Houston, called The Guild. It's one of those church-related resale shops that are operated for charity. Every time I go there for the weekend, I try to clean out one more cabinet and make a Guild run. Not only have their monthly checks helped to support my writing habit, I have also made a huge dent in the amount of clutter I will have to clear out, when it comes time to shut down the townhouse. Know what? I don't miss any of it one iota!
So what about you? Any suggestions for navigating "the reality of now" with aplomb?
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2 comments:
Well Geez! I appreciate what you said about all the ways I save money, but the paragraph right before that makes it sound like I was a coffee swilling, tobacco smokin, alcoholic who went to movies every week and never ate a meal at home!
Granted, before this I really did eat most meals out, but i never smoked and coffee tastes like burnt dirt to me. Gimme tea any ol day.
Love you mommy.
Well, I was trying to direct this to a broader audience, and list all the things they might be able to do without. I was thinking about your ex with regard to smoking, and what a drain that was on your joint finances. But now that you mention it, I guess this does make it look like these were all your own personal vices, which is ridiculous, since everyone knows you HAVE no vices - you're my perfect Pitootie!
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