Into this neutral air
Where blind skyscrapers use
Their full height to proclaim
The strength of Collective Man,
Each language pours its vain
But who can live for long
In an euphoric dream;
Out of the mirror they stare,
And the international wrong.
September 1, 1939
Read the entire poem @ http://www.poemdujour.com/Sept1.1939.html.
No economist, I. I am a wordsmith who has surrounded herself (due to some universal quirk) with people who handle money. Most people I know who work or worked on Wall Street feel our country’s economic struggles a) were unpredictable; b) couldn’t have been prevented; c) are complex. This kind of thinking does not bode well for our nation’s financial future (or futures). The entirety of my economic wisdom was learnt in two university semesters, which left me with the clear conclusion: “We can’t control it. No one can.” That information was gleaned from lectures given by two more economists. Yet lately, I’ve begun to think they may be wrong. We can’t do anything about decisions made by Wall Street brokers, international financiers, or people on the Hill. We can do our part in small, personal ways, which I list below. We can lead by example, instead of from behind.
This week, I offer my list of 12 personal finance principles, which I was taught from grade school onwards. I believe they may apply to macro economics. I’ve proven they apply to personal finance. I post it here in case guidelines that have been successful for me may help others. Take what you want and leave the rest.
- Work hard. I’ve always worked at three different jobs at a time. It keeps my brain mobile, and me marketable, and my family from drowning in debt. When first out of college, I worked at National Geographic, I transcribed tapes for a radio station, and I clerked at a boutique. Now, I have my communications business, I write fiction, and I volunteer for local non-profits. Oh, and there’s that mom job. So, maybe it’s four.
- Spend only what you earn. When I began working in 1980, I made $10,600 a year. I thought this a small fortune when I first saw the figure. I soon found out it wasn’t. Hence, my first three simultaneous jobs. When I left my job for a management position in Europe in the early 90s, I was making $50,000 annually. I was comfortable. A local PBS “expert” recently called a $50,000 income “poverty level.” I’m shocked at this statement. I realize that $50,000 is not what it was in the 20th century. Still, I was comfortable, saving, and sending money home to my parents when I was making $25,000. I was still sending money home at $10,600. I was scrimping and saving but I never felt poor.
- Save what you can. Yes, I was saving a little money when I was making $25,000 a year. Not much, but enough that I never had to dip into it. I also never knew what I would be able to salvage for my personal account because I helped out family and friends. I made do, and I still try to never, ever spend capital, pay interest rates, or extend my debt.
- Buy what you can afford, with cash if possible. When I started out, I was the thrift store queen. Goodwill had my good will and most of my extra spending money. I was creative. If anyone knew, they never commented. These days, you can’t give your gently worn clothes to those in need. They only want new merchandise. I didn’t have credit for five years; I was too poor and had no credit history. There was no way to go but used. For that, I will always be grateful.
I ate rice and peanut butter sandwiches at the end of each month. That was tough, but it didn’t last long, because I eventually earned more and could buy more, including a car (which had a hood that flew open if I surpassed 45 mph). The day I drove to the local supermarket was a day I’ll never forget. I was nearly 25.
- Buy what you need, not what you want. Televisions come to mind here. My first TV was a prize, the only possession I ever won. I used it until it broke, sometime in the mid-1980s. I still have the TV that replaced it from 1983, the TV from 1992, and the TV from 1997. No, none of them are flat screens, let alone 3D. I can still watch shows on them. TV isn’t reality, even though Big Business wants us to think it is. On the other hand, I do have an iphone. I found that it saved me money, because I could work anywhere, anytime. I needed an iphone much more than I needed a new TV screen. My choice was simple.
- One is enough; two is more than enough; three is too much. OK, maybe we do have too many TVs. I know I have too many pairs of black pants. I definitely have too many books. (Maybe I’m joking around a little.) But do I truly need as many pairs of pants as I have? Probably not. We all probably have too much of something. Look around. Adjust. Give it away to someone who needs it more than you do.
- It’s no use trying to keep up with the neighbors. They are always going to have something better than you. Even if you haven’t enough money to get “buy” on, you have something they may not: peace of mind. Plus, you may not the whole story of their private domain. For example, I have a beautiful antique chest in my foyer. It is envied by many. When I inherited it, it was falling apart. It had come over on the boat from Ireland with a long-deceased ancestor. I had to save to rent a U-Haul to get it home. Then it sat forlorn in my garage for years. When I finally saved enough to have it appraised, the appraiser warned me against rehabilitating it, because it would DE-value it. I had someone restore it anyway, because it had sentimental value, and because it was rotting in my garage. (Still another lesson: USE what you are given or GIVE it someone who will.) I paid the craftsmen on installment; it took three years to renovate it. I now have a beautiful chest, worth almost nothing monetarily. I love it; it makes me happy. See, peace of mind.
- Who cares what the neighbors think anyway? I had a dream about my neighbors’ deck last week. It was burning, and I kept going over, warning them that the flames might overtake their house. They just went on partying. The deck had already burned down, they told me. The house was brick. They were going to have rebuild anyhow. What was I so worried about? Have a drink!
- Neither a borrower or a lender be. My parents warned me of this in first grade, when Kathy Sue and I exchanged shoes. I continued to do so behind their backs. (She had great penny loafers.) I paid the price in the end. I’ve paid the price again and again when I’ve borrowed or lent money. Now, I either say, “It’s a gift; forget it.” OR “NO.” The times I’ve asked to be repaid, I haven’t been, so why should I expect it?
- Give whatever you can, whenever you can, but don’t give when you can’t.Exactly. That’s when I say no. I say no a lot these days because I am getting older and may eventually need to retire, because I am about to put two children through college, because our savings has been depleted like most Americans, because I pay for my own health insurance, and because I work for myself and need money for overhead. Once you give to one charity, you continue to get other charities interrupting your workday with pitiful voices asking for more. The “do not call” list does not work if you’re charitable. I tell the paid callers that if they continue to interrupt me, I can’t work to make money to give to them. On weekends, friends show up in your driveway with nothing in their wallet to make it to fill up their gasoline tanks but wanting you to come out to lunch with them. Homeless people without limbs stand with signs, pleading for my money. I send a prayer up to the heavens to help them find shelter and food, but if I don’t have it, I can’t give it. Period.
When I was 21, I used to give this blind homeless woman money when I was catching the metro each day. The end of that month, I had nothing for food or metro money. I’m not sure what happened to the woman, but she taught me a huge lesson about putting the oxygen mask on yourself before helping others breathe. I still give to a homeless shelter, my church, to a village in China, to my college (which I attended on scholarship), and to the Parkinson’s (Disease) Foundation. They are the causes closest to me and those I’ve been giving to the longest. I could have changed from the Parkinson’s Foundation to the American Cancer Society when I had melanoma, but I didn’t. I had a relationship with the former, and it seemed as though it wasn’t as common a cause. I knew I didn’t have enough to give to both. I wish I had enough money to save the entire world. But I don’t.
- Do not judge; lest that you be judged. Oh, you may think I’m judging. I don’t believe I am. I have many financial foibles myself. I spend money on books, travel, weight loss schemes, education, and someone to talk to because I hate to dump on my friends. I have too many black pairs of pants. I bought the automobile of my dreams five years ago. I know I could cut back here and there. I know there are some people who can’t cut any more from their budgets, or have lost their only income, or are ill without insurance. I pray for them each night, and I cry a lot. I’ve been there. I come from humble beginnings. My mother got Parkinson’s disease when I was 12, my brother was 6, and my father was in career transition with no health insurance. They had no one to rely on, and so we were on food stamps for a while. We lost our home. Even though I empathize with those who are struggling, even though I’ll never forget the desperation of foreclosure and bankruptcy, even though I still fear living paycheck to paycheck, I felt the need to share what worked for me because I have a feeling that a few people think money grows on trees–when fairly soon, if we don’t watch it as a planet, even leaves won’t be growing there. Others may think that ATM machines and plastic will do the work for them, but they’re not going to for much longer. We’ve got to cut back as individuals, as a people, as a nation, and as a world.
- History always, always repeats itself. Learn from it. Find Auden’s poem online, if you dare. Tell me it doesn’t sound like another September that we all were alive to witness. He was no more a conservative than I am an economist. Yet he did share what he could: his voice. I’ve waited a long time to share my thoughts on my country’s financial situation, because I’m basically independent and apolitical and laissez-faire. But the last five years have left me stunned, and as Graham Greene once put it in The Quiet American, “Sooner or later…one has to take sides – if one is to remain human.” Grief is always near the surface with me. I miss my country, or what I thought my country was. It had already become Auden’s picture long before I was born in a hot Chicago August, 13 years after the U.S. dropped the first atomic bomb. The future was already underway, just as it is now. Let’s change the economy as much as we can. Let’s stop trying to find a quick fix for our lives and instead, make the world livable for our children.
Start saving today with me. It’s all about balance. From today on, I plan to spend ONE penny, save ONE penny, and give ONE penny. Eventually, it will all add up. Join me for a month at least, even if you disagree with my viewpoint. Together, if we balance our pennies, we can change our lives and the lives of others.
Please comment. I’d love to know what you think![wpsqt name=”Rules Survey” type=”survey”]
NEXT WEEK: Tune in for a hard look at how we can improve this nation’s financial and international standing, based on these same 12 financial principles.