<image via 68751915@N05 on flickr>
A couple of posts recently about debt, poverty and money management have spurred me to revisit this post I started some time ago and bring together various threads I’ve been reflecting on of late. I think, especially if you’re from a comfortable background, it’s difficult to understand what vastly different lives some people lead – I know it was for me, but after having observed one of these families up close, I wanted to share my observations.
It’s weird being 18, and a student, and yet being asked (and able to) lend money to an older grown adult. It’s weird being 22 and ferrying those people around, because they have no access to a car. (True stories).
What is the difference between a person who lives in overdraft week-to-week and someone with a surplus? Why are some people savvy with finances and some are not? Is it instinct?
I grew up being taught to always save (not for anything in particular, but for the sake of it), saving all the money from my paper route, and having my parents also pitch in. I had money invested for me. “We can’t afford it” meant “It’s not in the budget” or “I’m not spending that much on ___”, not “We literally do not have the money for it.”
It was an eye-opener to be introduced to a way of life where:
– jobs are more common than careers, yet still not as common as welfare
– you’re always short a few dollars
– everyone in the family has bad credit
– nobody knows how to check their credit reports
– nobody has a savings account
– you pay the same amount toward their power bill every week because it’s easier than figuring out how to pay it at the end of the month
– everything is bought on hire purchase
It’s about the way you’re brought up. Is it any wonder that when someone from a background like this gets their first job, they go out and spend it all? Maybe give a little to their family to help out with essentials. Buy the things you need to get started in life (but probably not at the best prices), plus the things you may have wanted before but couldn’t afford.
You know nothing else. Kids don’t talk about money, after all. What do they know about it? And they don’t teach personal finance in school. There are no role models for success. Maybe the first you hear of another way of life is when you get to be 20-something and hear of others taking overseas trips and buying reliable cars – all through the power of savings. Of TVs bought with cash, not on tick. Of daring to have dreams, within reach.
And it goes hand in hand with values and a general way of life. One where education and reading are not necessarily prized. Where it’s going to be entirely up to you to break the cycle.
There is a fabulous comment on this One Dollar Diet Project post I wish to quote:
“I know that it’s ridiculously hard to get out of a situation if no one has ever taught you that it’s important or possible. It’s hard to save any money or advance at all when there are friends and family around you who are not; so you share when you have money or goods, and they share when you can’t, and no one ever gets enough to advance because it’s better for all to have some, rather than one to have all. And if no one is there to teach or set an example, saying “If you’re selfish for a little while, and you keep your successes for yourself and move up, then you can truly share with others.”
This is very true. At least from what I’ve observed, it’s about communal spirit, and sharing everything (what little?) they have. Family member needs something? If someone else can help out, then damn straight they will. Everyone pitches in. But if you’re sharing everyone’s successes subsequently no one ever really does spectacularly well because it gets spread around. (Perhaps another example of tall poppy syndrome, which we so love to trot out in NZ?)
“Too many times it’s lack of the basic necessities that keep the poor poor. Housing, medical care, food, education, child care, transportation: how do you choose which ones are a priority, or are you even given the choice?”
And then of course, getting out of that cycle takes incredible individual drive, and it takes education (if you haven’t checked out PlaySpent, you should – I’ve never had to make any of the tough choices posed there, and I can’t imagine being truly faced with them). Though I would like to note here another observation – of the immense importance placed on birthdays and Christmas. No matter what, the kids always get presents, and LOTS of them. Personally, I think that’s commendable, but shouldn’t be a priority if you’re not otherwise stable. I didn’t get presents at birthdays and Christmas – even though my parents could afford them – and I turned out fine, I think…
It was difficult enough for me to figure out the best way to manage my money at the age of what, 20? And that’s without even having come out of a debt-ridden or shopaholic phase. It was easy enough when it was just me, in high school – while my income was ridiculously low so were my expenses. Then T and I moved in together: cue more income, bigger expenses and a more complex budget. I would venture a comparison to trying to lose weight, or dieting – something countless people have tried and failed at time and time again.
How do you do it at 25, 30, 40 – and coming from an ingrained background of living hand-to-mouth? And what if you’re not – sorry, this is probably not quite the right word – intellectually inclined? When all you have outside of work is knocking back beers, and you’ve been doing it for as long as you remember – are you really going to start taking an interest in spreadsheets and number crunching?
I don’t mean to say that it’s hopeless, or inescapable. Far from it. I know some of you know all this already having lived it yourselves, but for the rest of us, I’m just seeking to offer some insight into a different mindset – and why in theory it seems there’s no excuse to be broke, it’s not as easy as we’d like to think. I truly believe it can’t be understood unless seen firsthand.
Even though my fiance and I are the same age financially I am far better off – and that’s partly due to bad decisions on his part, but also a run of bad luck. (I’d say the number of incidents are about even – but I won’t list them in detail as it’s really not my place).
You’ve heard me talk about how fundamentally I’m the saver and he’s the spender enough times; well, the only consumer debt he’s ever actually had was a small car loan. The vast majority of his debt was not incurred by him, but he was stuck with it. (Again, probably not my prerogative to explain). He’s never even had a credit card of his own. I can understand why he might feel bitter about money and even life in general, sometimes. To me, there is no better personified example of what upbringing + lack of education/knowhow + a couple of unfortunate setbacks courtesy of fate can yield – and how having a financial role model/coach can help turn things around.
It’s strange being 22 and better off than all of your folks. It can be a great source of guilt, when they’re essentially good people trapped by a cocktail of bad luck, circumstance and poor choices.
But guilt is a useless emotion. Good people don’t have to be broke to be good. You only get one life, and if you don’t put yourself first, getting sucked back under will make it that much harder to climb out again.