Other People’s Money

26. May 2009 · Write a comment · Categories: Uncategorized · Tags: ,

I’ve been following the Edmund Andrews story as it’s been unfolding via various blogs, mostly via Megan McArdle. In case you weren’t following, Andrews excerpted part of his book on his succumbing to the subprime mortgage market in the New York Times. Since the story came out, lots of blame has been going around, a lot of it focused on his wife, who had been a stay at home mom, struggled to get jobs and, it turns out, had two prior bankruptcies.

Reading the numbers makes me sick. As far as I can tell, these people make about as much as we did when we were both working. And yet, thanks to putting themselves into huge debt, they have a lot more than we do: a larger house, kids in private school, expensive clothes. Granted, they are on the verge of losing much of that, but it’s still depressing. I’m glad I didn’t run up $50k in credit card debt in order to have fancy clothes, fancy cars, and private school. Are there things I wish I had? Sure. But instead of getting in over my head, I’ve lived (mostly) frugally. Like the anger over the AIG bonuses, I think much of the anger directed at Andrews is about the relative wealth they displayed compared to most people. While many people went into debt to live a modest lifestyle–finally getting into a home in a decent neighborhood, for example–a lot of people lived within their means, forgoing an expensive lifestyle. Many people being foreclosed on now did not have 3000 square foot or larger houses. They are now living with family, don’t have jobs, etc. And yet, Andrews still has a job, still has a house even, and a book out that will certainly bring in some income.

My father in law used to say, “Poor people have poor ways.” And it’s sometimes true that poor people make some bad financial decisions, but it’s also true that they sometimes get hoodwinked into doing so or simply have no other alternative than a payday loan in order to put food on the table. Increasingly, though, I think the phrase should be “Rich people have poor ways.” As more stories come out about wealthy Wall Street bankers and mortage brokers as well as people like Edwards, it occurs to me that many of them weren’t so financially savvy. Unlike the poor, however, who tend to only suffer personally for their decisions, the poor ways of the rich are dragging us all down.

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Money Can Buy Happiness

09. March 2009 · Write a comment · Categories: Uncategorized · Tags: ,

Gretchen Rubin has been writing a series of posts that outline 10 happiness myths. Today’s is Money Can’t Buy Happiness. She argues that it can. As people are losing their jobs or seeing salary cuts and experiencing depression as a result, it seems obvious that money does buy some happiness. I agree. When we were young and poor, one or both of us in grad school, we were constantly running into situations involving money that made us unhappy. It was not fun to juggle bills, to put off much-needed car repairs, or eat meals made up of whatever canned goods are left in the cabinet. I can remember days of going to the mall just to have something to do and being thoroughly depressed because I couldn’t buy so much as a cup of coffee.

We’re way past that now, and boy, am I glad. Having enough money to buy the essentials and pay the bills on time is a blessing. But, we have taken steps backwards financially over the years. Moving here was one such step, and my recent decision to quit was another. Both decisions, despite the financial setbacks, were made to make one of us happier. And I’d say that both decisions were good ones. We may have to think a bit more about purchases, budget a little more carefully, plan longer into the future for even small things, but all in all, the stress of having to do that is minor compared to the stress of working in a job that no longer appealed and that took me away from my family more than I wanted it to.

As Gretchen suggests, even though money may be a bit tighter than usual, I still spend money on little things that improve my life. I’m not a regular coffee shop patron, but every once in a while, I like to sit down with a latte and a muffin. I like bubble bath and magazines and books. Those are all things I could give up if I had to, but they’re also things that make me pretty happy with just a small investment of cash. And, of course, there are things that don’t cost money that make me pretty happy, too. But sometimes, a few bucks will buy a little joy.

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More fun with economics

20. November 2008 · Write a comment · Categories: Uncategorized · Tags: ,

In the comments, Janice points out this article in the NY Times also discussing the math problems people have when trying to figure out what’s reasonable to save on. Mr. Geeky and I have spent hours in the past doing the back and forth of deciding whether to buy something or figuring out how to save money. For me, saving $80/mo. on school lunches isn’t worth the time I’d have to spend making the lunches. But both kids have indicated they’d like me to do this. We’ll see.

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Poor people have poor ways

20. November 2008 · Write a comment · Categories: Uncategorized · Tags: , ,

This is a phrase I’m sure you’ve heard and one my father-in-law said to us a lot when we were in grad school. There’s an interesting conversation going on over at Half-Changed World about the cost of food and how low-income people are buying more Spam and other not-so-healthy options. I have written about health, food, and class twice before. Yes, it’s true many of us do not have the survival skills of our grandparents. I can make my own pasta and bread, but I don’t like to mostly because I lack equipment, time, and space to do so. Of course, I’ve been spoiled by watching food shows. My grandmother’s kitchen was 2/3 the size of mine and she made everything from scratch. I think mostly it’s a matter of establishing certain habits. We have a good farmer’s market, but I forget to go. Many of the CSA’s are $700/yr or thereabouts, which is a bargain really, but if you’re poor, you don’t usually have that kind of money and don’t know what to do with half that food anyway. And growing my own? Well, I have a postage stamp of a yard, which I’ve joked about growing potatoes and cabbages in and then guarding those with a gun, but really, I don’t know much about growing either. I’ve done it. I could do it, but could we really save a lot by doing that?

I spend on average $150/week on groceries. I buy a fair amount of produce, but I do use a lot of shortcuts–frozen veggies, pre-made dough, the occasional frozen entree or side dish–and I buy meat. But I could live without it if I had to. These days, I tend to see what’s on sale and then think about what kinds of things I could make from it. Ground beef was two for one last week. That made a spaghetti meal and tacos. And it wasn’t the lean meat either. And that’s the thing–and what I said 3 years ago too–the good stuff is expensive. You can complain all you want about poor people not knowing how to prepare healthy meals, but when you’re just looking at the bottom line, you’re likely not to pay as much attention to the nutrition labels.

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Why I Work

10. April 2007 · Write a comment · Categories: Uncategorized · Tags: , , ,

It’s kind of funny that this is even a question, but for women with children, it is. I guess it should be a question for men with children, but it isn’t. I’ve been thinking about my recent post and stumbled onto another one with a similar theme. Before I was married, I never questioned whether I would work or not. I knew a couple of women from both high school and college whose goal was to marry, have kids and stay at home, but for most of the women I knew, the question of whether to stay home or work didn’t arise until after kids came along. For me, the question didn’t arise until pretty recently. When our first kid came along, I was our only income, so there was no question about whether I would work or not. I had to. I had a pretty heated argument with someone who suggested I was shortchanging our son by returning to work. I remember nearly shouting, “Well, who’s going to pay for our food and shelter if I don’t work!” I was pretty steamed. In hindsight, it wasn’t that I felt my adversary was right, but that I resented the dilemma in the first place. Somewhere inside I kind of wanted to stay home. After all, the job I had at the time was just for the money (and the insurance).

Back when my kids were little, I felt like they got good care. I didn’t feel like I needed to be there to read books or play or whatever. We did all that when we were with them and I knew they were getting lots of attention from their caretakers. Now that they’re school age and they’re not really getting anything special out of aftercare programs (or don’t even have aftercare programs), I feel more of a need to be with them, to help them with homework and to help them negotiate social issues that arise. This year, Mr. Geeky has been meeting Geeky Boy after school. On days when he can’t, he calls us and discusses homework and other things. Not ideal, but it works.

Despite the tug of wanting to be at home, I work for three main reasons. First, I work purely for my own personal satisfaction. I need intellectual stimulation. I need to be challenged. I need to be around people. I enjoy solving problems, thinking about issues, etc. I’m not creative enough to create that environment for myself at home. Second, I do it for the money. I enjoy the extra income, and for a long time, we actually needed it. We could probably get by now without it, with a few sacrifices, but I know I appreciate the buffer my income generally gives us. Third, I feel the need to contribute and chose my job accordingly. I think if I were just working for the money, I would not feel as satisfied nor would I feel as compelled to work. If I were a corporate drone of some kind or a salesperson or something along those lines, I don’t think I’d enjoy working. Being part of an educational institution and mission makes me feel like I’m doing some good in the world, even if it’s only for a handful of people. That’s not to say that I feel that if I’d been at home, I couldn’t contribute in some way. It simply reflects my own perception of how I need to contribute. I’m just not the type of person who could get satisfaction out of volunteering by itself.

In other words, my decision to continue working is an individual one and probably different from many other women. There may be women who work purely for the money and are satisfied with that. There are women who don’t work and are satisfied with that. It’s often a complicated decision for many people. A two income family juggles many things in order to make things work. A single income family may have to make certain sacrifices in order to make that situation work. And the world of work doesn’t make either situation all that easy. For one, there’s no in between really. Some jobs are inflexible and involve working long hours, keeping people away from their families and placing undue burden on the spouse at home (if that’s the situation). I feel lucky to have enough flexibility that I can take days off when I need to and could take plenty of time if something tragic happened. That, too, helps me continue to enjoy work, knowing that my workplace would want me to put family first when I need to. If only every workplace had that attitude.

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