Occupy Your Own Future
I know writing this blog post may just alienate or outright anger some of my friends and readers. But I want to make this perfectly clear: I do not feel “lucky.” I do not feel I got any more of an advantage in my life than anyone else. I made choices, good and bad, that brought me to this place I am now. Choices are what it is all about.
So, I watch with some interest the “Occupy Wall Street” crowd, listening to some of the rhetoric. I’m a registered Independent, but I also know I have some Democratic leanings. I also have some decidedly Republican sensibilities. Someone I knew once said they were “socially liberal, but fiscally conservative.” That probably describes me as well. I believe in health care for all, but I don’t believe in welfare. I believe in religious freedom (not just tolerance), but not in government support of any religion in any way, shape, or form. I believe in jobs programs, scholarships, and access to education, but not in student loans. I believe in cash spending, but I don’t believe in buying on credit.
I also believe that money is what makes the world go ’round, and that if you want to change your world, you have to be choosy about where you spend your money, and how you spend your money.
The “Occupy” folks have plenty of things going for them – righteous anger about how banks and other financial institutions have behaved, about how the government has bailed out these corporations that have been close to failing (while being touted as “too big to fail”), about the high unemployment numbers and the huge discrepancy between the very rich and the rest of us. For all that, however, I have yet to hear one speaking intelligently or convincingly about their goals. What I hear is a lot of “you you you” accusations, but no talk of a solution. How, exactly, do we fix this?
We fix it with our pocketbooks. If we’d had not been holding our wallets hostage to our desires for the last twenty or thirty years, we wouldn’t be in the mess we are in now. We bought ourselves into where we are. And worse yet, we bought ourselves into this mess with money we didn’t have. We borrowed it. We borrowed lots of it.
Borrowed money isn’t magic. It isn’t invisible nor does it go away just because we didn’t see ourselves spend it because it was virtual money. Borrowed money is money enhanced: enhanced with interest and penalties. Lots of penalties. A house bought the traditional way, with a 5% down-payment and a 30-year mortgage actually ends up costing three times its original sales cost. A car bought with a tradition 5-year payment plan even at a reasonable 8 or 9 percent interest rate ends up costing the buyer almost twice the original sales cost of that car. A refrigerator purchased with a store credit card, at a 16 or 18 percent interest rate over a three-year loan will cost the buyer as much as three times the original cost of the refrigerator. If you purchase things with a standard credit card, depending on your payment cycle and amount of payments, you could be paying ten times what those items cost originally.
Many Americans have been convinced that they must live beyond their means to be “happy.” A bigger house is better than a smaller house, even if we can’t really afford those payments. A new car is better than an old car. “Making do” isn’t part of the vocabulary. Reusing isn’t even considered. And that habit, which is now ingrained in almost two full generations of Americans, has brought us to this place.
It is time for us to rethink, as a people, and as individuals, about what is important. New clothes vs. used clothes. New fancy big gas-eating car vs. used older gas-efficient car. New furniture or recover the old furniture. Putting everything on the credit card because it’s easy, or using cash or debit instead because it’s cheaper and less of a temptation. I can “want” a lot of things, but what I need are three or four decent pairs of jeans, seven shirts, and a pair of sturdy shoes. Everything else is gravy. I can “want” that Subaru or Toyota 4Runner I slobber over, but what I need is a fuel-efficient car to get me to work and back every day. I can “want” to eat out every day for lunch, but what I need is to eat up those leftovers in the fridge so they don’t go to waste. I can want that fancy Swiffer cleaning system, but all I really need is a broom, rag mop, and bottle of cleaner from the Dollar Tree.
There are those that will argue that they pay their credit card bills off every month, and that they haven’t made some of these poor choices in spending. But I dare say everyone (including me) can do better. We live in a very consumer society where we are bombarded with advertising and a push to buy buy buy no matter what the cost. I see my neighbor’s pretty truck, and wish I had one too. “I wonder if I can manage to find the money for a monthly payment on that,” I might muse to myself, especially when I see my old, rusting, not-so-shiny-anymore Corolla in my driveway.
But I know that the biggest reason why I’m able to continue to live in my house, have THREE cars for the three drivers in the household, eat a home-cooked meal every night for dinner, have a bowl of fresh fruit on the counter, and have plenty of Diet Coke in the fridge, is because I’ve made deliberate choices elsewhere. I do not buy on credit, for any reason. I don’t eat lunch out but once a month when it’s required of me for a meeting at work. I buy second-hand whenever it is possible, which is most of the time. I take care of the things I have, and find ways to make things work. I could have gone and bought a fancy cover for the swamp cooler that lets lots of cold air pour into my kitchen, or I could just cut a piece of cardboard from an empty box to fit the front and tape it on with a little duct tape.
Do I wish I had more money, and could be more careless with the money I have? Sure. Everyone does. But in the end, I refuse to pay anyone to borrow money. That’s just a waste, in the short AND the long-term.
As for those Occupy people out there. Time for them to take some responsibility as well. Banks cant make money unless we are giving them ours. Banks aren’t the problem. WE are.
P.S. Just read this in a weekly newsletter I get through email for living thrifty. This is in regard to a credit card balance you may carry and pay on:
“If you have a balance of $5,000 with an APR of 14%, and you only pay the minimum of $100, it will take 22 years to pay off the debt in full, according to a Federal Reserve credit card calculator. You’ll also hand over $6,110 in interest. Boost your monthly payment to $150, however, and you’ll be debt-free in four years and pay $1,369 in interest.”
