The managing of money

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Broadway tickets always a splurge — worth it?

By Caitlin Kelly

Few things are as frightening to some people as managing money.

For many, it’s a question of sheer survival — when the American federal minimum wage, shamefully, hasn’t risen from $7.25/hour in 10 years — while the cost of living now dictates a minimum of $14.84 an hour in Cleveland and $24.30/hour in San Francisco.

For others, it’s the best barometer, literally, of their worth and value to the world, to their family, to their industry — and to themselves.

One freelance writer bragged this week about making $10,000 in a month and how she’s about to hit her $50,000/year income goal.

Which inspired many others but also annoyed me and some other writers I admire. I really tire of money being held up as the sole metric of success.

Income is not one-size-fits-all.

Expenses, as well.

I recently had an interesting conversation on Twitter with a stranger, a mechanic earning $40/hour, about my use of the words “working class” — wondering if that meant him. I suggested “blue collar.”

I’m endlessly fascinated by what we earn, how we earn it, what we spend it on and how much (if any) we save and for what purpose. As subscribers to the Financial Times, we also get its glossy oversize magazine called — no kidding — How to Spend It, which often features $10,000 dresses and $100,000 watches, pocket change to the bankers and other HNW (that’s high net worth) readers it’s aimed at.

I’m fascinated by money partly because my maternal grandmother inherited a lot of money from her father, a Chicago stockbroker and real estate developer — and spent it so fast and so freely you would think it burned her fingers. She lived a life of opulence: homes designed by the city’s top decorators, limousines everywhere, custom-made silk muumuus and matching turbans and enormous jewels. It was quite something!

She also never bothered to pay any taxes to anyone — so when she died there was little left after paying off the Ontario, Canadian and American governments.

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Our weekly indulgence, fresh flowers

So I’ve seen the effects of both privilege and profligacy.

 

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Don’t end up in trouble!

Living in the United States for decades — without doubt the meanest and most punitive developed nation when you are poor, ill, vulnerable and struggling — has also really opened my eyes and taught me to be extra cautious about what I earn and how much to save. It’s not a place you ever want to be in trouble with no lifelines or savings, reliant on charity or the shards of government help potentially available to you.

We were offered a huge break this year, a tax credit that has saved us $1,000/month (!) on our health insurance. But we’re also now required to account for every penny of our income and expenses to bureaucrats who have no understanding that — as full-time freelancers — we do not have an employer, yet keep hounding us for more and more paperwork.

That’s when I get libertarian in a hurry and would rather just pay for things myself.

I’ve stayed put in the same one-bedroom apartment for decades; our housing cost is $2,000 month, (half of it the maintenance fee we owe to the co-op,) fairly cheap for New York (suburbs.)

But we don’t have children or pets or dependent relatives, when so many others bear the costs of all of these. So we’re usually able to save money and that gives us some breathing room — helpful when we lost $27,000 worth of anticipated income overnight thanks to the pandemic.

We were also lucky to each graduate college with no debt, (Jose had full scholarships and I attended university in Canada), another enormous burden for so many Americans, even into their 30s or far beyond.

So much of the money we have access to, and how we manage it, is circumstance and luck: where we were born and raised, what resources were made available to us and when. The job market.

Good health — or its lack.

This year has, oddly, been a busy one for us. We have both had steady work and found new and appreciative repeat clients.

But we both really know how fragile it all is.

My husband grew up in a wholly different way, his father a small-city Baptist minister living in church housing. So Jose tends to be very risk-averse and I tend to be bolder when it comes to spending and investing. It makes for some challenging moments!

We work really hard, splurge when we can, and pray for ongoing good health.

Does handling your finances cause you stress?

Do you enjoy it?

Did anyone teach you money management skills?

The Boomerang Kids Learn a New Word — Budget

Factors contributing to someone's credit score...
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budget n. An itemized summary of estimated or intended expenditures for a given period along with proposals for financing them.

In today’s New York Times, personal finance writer Ron Leiber tackles the challenge of managing life with adult children who return to their parents’ home to live. In the piece, one college student is interviewed and photographed at his parents’ home in a wealthy town in a wealthy county. He tells the Times he has no idea what a budget is. The accompanying photo shows his  Dad. And Dad looks mad.

Who taught this kid how to not budget? Has he not been responsible for taking care of his own finances for a while? Apparently not. I was out of my Dad’s house — which had been sold, so there wasn’t much choice in the matter — at 19. I’ve never been back and it’s never been an option. He re-married, lived in a smaller apartment and had a second family whose needs took precedence. My mom, similarly, never suggested this was a back-up plan for me either. They both expected me to figure it out. And so, living alone in a studio apartment and going to university full-time and freelancing for national publications to finance this life, I did. During that time, I really wanted to take a ballet class. The shoes, tights and leotard were $30. It took me three months to save that $30. I missed a few ballet classes and I hated that. I learned what it feels like to be thisclose to what I want and have to work and save and work and save and not buy other stuff to leap the gap to get there. Continue reading “The Boomerang Kids Learn a New Word — Budget”