Women and money

One place I do love to splurge — Via Carota in NYC

By Caitlin Kelly

This story surprised me, that millennial women are less likely to handle their own finances than us Boomers:

A study published in June by the Swiss banking group UBS underscored that point. It found that even the most educated and high-achieving millennial women were not as involved as their husbands in long-term financial decision making.

In fact, millennial women — part of a generation thought to have pushed for open-mindedness about gender roles — exhibited less financial independence than boomer women did. Among millennial women living with male partners, 54 percent said they deferred to their partners for long-term financial planning rather than sharing that responsibility or taking the lead themselves, compared with 39 percent of boomer women, according to the study, which surveyed 1,320 women with at least $250,000 in investable assets.

This — initially — made sense to me:

Sallie Krawcheck, chief executive and co-founder of Ellevest, an investment platform for women, said millennials might not have realized that if they do not have financial equality, they do not have independence.

“Younger women haven’t had as many hard-won lessons,” she said.

But I know several millennial women (ages 23 to 28 in 2019) and they’ve faced a difficult economy and massive student debt, both of which can make anyone fearful of money matters.

The reason the women surveyed for not handling more of the money offered was their assumption that their husbands knew more.

This is madness!

The ability to manage money well — whether debt or investments — isn’t a male skill. I’ve seen this in my marriage with Jose, who did not grow up in a wealthy family, while my family of origin (at the grandparents’ level) had some serious money.

So I was fortunate at 19 to have a fat $350/month (thanks to my maternal grandmother) I had to make sense of and, throughout three years of full-time university, use for all my costs, including living alone in a major city.

Living on $350 a month was hardly luxury — my rent consumed 50 percent of it.

So I learned young to hustle hard for more income, through freelance writing and photography assignments.

I still remember what clothes I owned then, bought new, but very few of them and nothing as shiny as my live-at-home fellow students.

Jose and I have been able, without the additional costs of raising children or carrying student debt, to accumulate a decent amount of savings, enough that we really do have to pay attention.

He got a buyout package when he left The New York Times in 2015 and it’s our job to keep it safe and grow it when possible as we’re not going to get hired into another well-paid full-time job again, and never again enjoy job-subsidized health insurance — thanks to age discrimination.

So the pressure’s on to be smart and savvy.

I read the Financial Times every day. It’s really written for the professional experts who work in capital markets in London, New York, Hong Kong — not for me! But I learn a lot and keep an eye on companies worth investing in. If you refuse to pay attention to the global economy you’ll always be surprised by what happens.

I’ve read a few financial self-help books — the best takeaway? Don’t put your money anywhere that you just don’t understand! For me, that’s ETFs. They’ve been explained to me several times but my brain just freezes so I stick to what I know — a wide variety of mutual funds and a few individual equities (i.e. stocks.) We have no bonds at the moment.

If you’re willing and able to invest you do need to learn some lingo:

— asset allocation (where you invest)

— diversification (making a range of different investment choices to balance out the risk of individual ones failing)

— capital (i.e. money!)

That’s just a super bare bones start!

The level of poverty in the U.S. is deeply shocking — given the astonishing wealth here

Even if you’ve got some savings in a mutual fund, have you checked how it’s doing? Do you know the top 10 holdings? I was stunned — a few years ago — to see how dominant China was even then.

Do you know what a fiduciary is? They’re the only people whose financial advice you should heed.

I also learned the hard way never to play ostrich with how your money is doing — and lost about $11,000 that way on an investment my first husband made. I was an utter fool, too scared to open the envelopes they sent, and discovered that my own money (already saved) had been used to keep paying the company every month after I lost my full-time job and could not get another.

Back when, like these women, I assumed he knew better than I.


He didn’t.

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?

A rough week

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So tired of financial thin ice

 

By Caitlin Kelly

By December 15, any American who doesn’t have health insurance has to sign up for it.

If you want to change plans, same.

I had to make four separate calls to get the information I needed. We are keeping our plan — now going up to $1800 a month.

There are no bargains.

 

If your plan costs less per month (and I’m talking $800 a month, not $200 to $400), you’re hit with huge “deductibles” — more money to pay out of pocket.

A plan that would offer dental “coverage” would limit us to basic care, and charge us a $25 co-pay every time we actually used it.

This is absurd, and our dentist is fine letting us pay over time. No co-pay.

American health insurance, when you work for yourself and it’s not subsidized by an employer, is a crippling cost. We’re reduced now to using retirement savings for it…wasting our hard-earned money to stave off potential bankruptcy.

I’ve recently been told to add two new medications, so a comprehensive plan is essential.

Having grown up in Canada, this “system” is just barbaric. But I left Canada seeking better work opportunities, and until recently, this was true.

Journalism, now, is in free fall.

Freelance pay rates are one-third of the 1990s.

And this is not the time or place to suddenly re-train for some whole new career. Just not going to happen.

Plus this week offered a nasty surprise financial disclosure that stunned me, not in a good way.

Not feeling the holiday spirit at all right now.

 

Life, wealth adjacent

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A program that gets low-income New York students out onto the water — into boats they built by hand

 

By Caitlin Kelly

Have you heard of the Gini coefficient?

It’s a measure of income inequality, invented in 1912 by Italian statistician Corrado Gini.

I pay attention to it since I live in the United States — whose income inequality is the greatest in a century — and grew up in Canada, a nation with a much greater sense of the common good, and which creates public policy accordingly.

I’m also so aware of this because, living in a wealthy county north of New York City, I see it every day.

My town, 25 miles north of New York City, has massively gentrified in the 30 years I’ve lived here, as Brooklyn hipsters, priced out, have stampeded north, bringing man buns and McLaren strollers and Mini Cooper cars with them.

The other day a black Maserati blasted past me on the road and I’ve even seen a Lamborghini in town, a place once mostly filled with dusty Saturns and Civics. Today we have a local restaurant whose owner and whose ambition we love, but we watched three separate customers look at the menu and leave, saying his prices were too high.

And yet, our town retains real diversity — with public housing projects, multi-family homes, many rentals and, recently, million-dollar riverside condos.

I drove into Manhattan the other day to my hair salon and watched a woman laden with shopping bags struggling into her West Village 1800s brownstone townhouse door — a home that today would easily sell for $5 million or more; here’s one — just down the street from my salon — for a cool $28 million.

We are OK, compared to so many Americans, in even having savings, in owning our apartment (OK, still with a damn mortgage!) and having decent health and work.

But it’s bizarre to be surrounded by people with so many more zeros to their annual income, property values and assumptions about what’s “normal” — many women casually sporting a Goyard carryall that sells for $1,150, more than our mortgage payment.

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The organ was a $250,000 donation — from one parishioner

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We attend a gorgeous little church, built in 1853 by the same architect who designed New York’s famed St. Patrick’s Cathedral, and some parishioners are extremely well-off. (The photos on their website are all by Jose Lopez, my husband.)

Some women live nonchalantly supported  by husbands working in corporate law or on Wall Street, in enormous houses. Annoyingly, they seem to think my  career in journalism is some cute hobby, as they chirp: “Are you still writing?” or just ignore me because I’m clearly not rich and raising a brood of ferociously ambitious children,

This is the time of year when we’re asked to pledge, i.e. make a firm monthly financial commitment, to the church. There’s a chart in the parish hall showing a small group of people — fewer than 10 — give $20,000 to $30,000 a year, which is more than I’ve earned in some freelance years.

We’re debating how much to give. I admit that we’ve never pledged, but almost always add to the collection plate.

My family of origin had plenty of money, on both sides, and I enjoyed a childhood of material privilege, attending boarding school and summer camp. So wealth doesn’t intimidate me, nor do I spend my days lusting for more stuff.

But American “success” is always predicated on highly visible signs of wealth and power — hence the need for status-signaling clothing, accessories, housing, cars, nannies (some have three), exotic vacations, etc. So if you’re not “keeping up” you must be some sort of loser.

 

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East 70th Street, Manhattan

Jose and I chose a much less lucrative career path, journalism, which is why we drive a 20-year-old Subaru and have lived for decades in a one-bedroom apartment. (We also have decent retirement savings, a less visible decision.)

And yet, you have to be wilfully very ignorant to ignore the incredible poverty that also surrounds us, poverty I finally confronted personally for 18 months when I was a Big Sister to a 13 year old girl, a formal mentoring/matching program.

Sharing a squalid house with a bunch of relatives, her mother having disappeared years before, she lived only a 20-minute drive east across the county from me, but might have lived on another planet. I had never grasped that even knowing how to use a public library was a specific and essential skill for future success in a highly competitive economy; she didn’t know.

It snapped me into a deeper awareness of how wide these divisions are.

I wish I had some smart answer to this.

I do not.

 

Do you see this kind of income divide in your area?

 

 

Having extra means feeling rich

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Custom made pillow covers. A splurge.

 

By Caitlin Kelly

 

She had in her early teens what some would call “a reversal”, my late step-mother, and so, later in life when I knew her, she owned a lot of stuff.

She never talked about her family of origin; in 40 years of knowing her, I only learned the names of her mother, brother and sister — none of whom I ever met — but never that of her father, who had been well-off, then wasn’t.

Never having gone to university, needing to work right away, she later worked as a highly successful writer and editor of TV show scripts and, in good years, made a lot of money, which she spent on expensive shoes and jewelry, amassing garment racks filled with designer clothes, her cupboards bursting with products and cosmetics…all of which proved even more overwhelming to dispose of for my father when she died of lung cancer at 63.

I never understood why having so much stuff — basically, extras of everything — could feel so satisfying.

Now I do.

When Jose and met and started dating 20 years ago, times were tough for me and he was extremely generous, buying me everything from a colander and toaster to new air conditioners. I was living alone,  divorced, paying — in the 1990s — $500 a month health insurance as a freelancer. There was very little money left over after paying all the bills.

 

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I certainly had no need for this lovely early 19th. century tea set. But it gives me such pleasure to use.

 

Now we do have extras: cloth napkins and tablecloths, rolls of toilet paper, candles, rubber gloves, multiple computers. Summer and winter clothing.

We own sports equipment for bourgeois pursuits like skiing and golf.

I feel alternately guilty and weird for having more when so many have less,  but I admit it also comforts me.

When you’ve run in survival mode for years, extra is luxury.

Who exactly is “middle class” in the U.S.?

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Can you afford a house? We can’t. Not anywhere near where we live….Maybe this is why I enjoy reading about others’.

 

By Caitlin Kelly

And, another hate read from The New York Times, somehow insisting that an annual income of $100,000 to $200,000, even $400,000 (!) or more means “middle class”:

This is the introduction, while the story focuses on seven families, with only one single man.

Being middle class in America used to come with a certain amount of leisure and economic security. Today it involves an endless series of trade-offs and creative workarounds, career reinventions and an inescapable sense of dread.

We asked readers to tell us what it’s like, and more than 500 people, with widely varied incomes, submitted responses. They described not just their financial worries but also he texture of daily life. Even those with very good incomes expressed fears of instability. They have seen their wages and bargaining power stagnate and wealth spiral to the top, while they struggle to acquire the markers of middle-class life — a college education, health care, the deed to a home.

As one reader, Kristin DePue, put it, “There is an extraordinary burden on my generation to fund our own retirement and also afford college costs for our children.” Indeed, “middle-class life is now 30 percent more expensive than it was 20 years ago,” the journalist Alissa Quart writes in “Squeezed: Why Our Families Can’t Afford America.” And yet, for all the talk of “everyday Americans” among the presidential candidates, politicians do not seem to understand what it takes to get through the day, or what would really help.

 

 

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Georgetown, DC. Pricey but lovely

A few thoughts:

 

— No American — unlike some Britons who will proudly say they are “working class” — will use that language to describe oneself, even if it’s true. There are so many euphemisms for poor: broke, impoverished, low-income, underprivileged, each of which is vague and subjective. One man’s “broke” is another man’s notion of luxury.

— Many factors affect how far one can stretch a budget: housing, health insurance (if you’re on Medicare or Medicaid, free), educational costs, number of children, etc. If you’ve chosen to raise a child, or many children, that’s an assumed cost bringing many additional costs with it: food, clothing, medical care, etc. Plus childcare!

— Some areas of the country are brutally and punitively expensive for housing and if, for reasons of employment, health and/or reliable family support you can’t leave, that cost alone is going skew what you need to survive.

— If you have multiple children and every one of them attends a private university or college, let alone graduate or professional school, it will cost a fortune. Yet it remains a very loaded and un-American idea to suggest trade school or vocational training instead, even though many such workers, unionized, make very good incomes, have plenty of work life-long and tremendous pride in their skills.

— This story generated 1,358 comments (that’s a lot for the Times), as “class” is a loaded word for Americans, raised from birth on the “American dream” of social mobility.

Here’s one of them:

The median household income is $59,000 per year. All of these people in the article are far above that, but they are still struggling to afford basic things like education for their children because life is very expensive. Imagine what a family making $25,000 is going through, trying to send children to college. Everyone that is thinking about this election needs to realize that the real middle of the country is hurting. All of our security has been turned to risk, and the billionaires pay themselves as if they carry the risk, instead of us. The corporate establishment “center” has completely discredited itself, by telling us how great the economic numbers are, how “free trade” has really been great, and that there “is no money,” for the things that most people need, because, according to the owners of capital and the media they own, the only way for capitalism to work is for their corporations to get fat, no-bid, cost-plus contracts, while those same corporations have their taxes cut to zero.

Jose and I live in a suburb of New York City, in a one-bedroom apartment. Our monthly housing cost is $2,000, health insurance $1,700, various other insurances another $400+. Add food, gas, the $95 cost of a 10-trip off-peak train trip into New York City for work or pleasure, parking, dental, etc.

In our good years, we make just over six figures, as full-time freelancers — i.e. wholly self-employed; in bad years, we have had to tap our retirement savings (and thank heaven we have some.)

That, for many people, is a fortune!

But our combined income can also disappear at any moment without warning if one of our clients cuts their budget or management changes. We have no paid time off or paid sick leave.

At this point, effectively shut out of any full-time job (that would cut $20,000 a year in costs with job-supplied health insurance) by age discrimination, we are OK, partly because we have no children or dependents, and have stayed in this home for decades, driving a 20 year old vehicle.

 

How about you?

 

Where do you fit?

More notes on freelance life

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By Caitlin Kelly

It happens to all of us.

This time, it’s The Pool, a popular and terrific five-year-old UK website aimed at women, now “in administration” (i.e. bankrupt) and screwing lots of furious freelancers out of the payment we earned and are owed and rely on.

Here’s a story about what happened.

But here’s the tricky part:

You don’t think to check the records at Companies House in case an outwardly successful, much-loved, well-read website is in fact £760,000 in debt, has an outstanding personal loan of £40,000, borrowed £250,000 against the company’s assets and lost £1.8 million in the previous financial year. As a freelancer, you can’t possibly be aware of office politics, or worrying signs such as the fact that the entire board bar one resigned in August 2018. None of the staff tell you. Why would they? Maybe they don’t know.

Besides, they need your copy. They keep commissioning you, right through the Christmas period and into early January, only stopping — or so it seems — once they are outed first on Facebook and then on Twitter by a mounting number of freelancers who haven’t been paid.

I’m out about $300 — a hit we can afford to take (reluctantly!) because we have savings and a fairly low overhead. But many others relied on The Pool for our due payments — to pay for rent, food and other necessities.

Creditors don’t care why we’re suddenly and unexpectedly short.

They just expect to be paid on time.

 

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I learned young to be wary of others’ glossy appearance or promises of payment.

I’ve been selling my photos and writing as a freelancer since I was 19, when, one summer, I sold my photos on the street in Toronto. I was so flattered when a smooth, well-dressed, charming woman ordered a large color print of my work — and sent me a rubber check. She assumed I was ill-equipped to fight back.

I sent her a lawyer’s letter and got paid in full, quickly.

I see too many people now desperate for emotional or professional validation — “I’m a writer! I got published!” — when some of those commissioning this material are shysters or going broke and no one tells us this — until, suddenly, we’re all screwed.

As soon as I started to fear (and hear rumors of this disaster at The Pool) I might not get paid, I Googled the company and found everything I needed to know; senior editors quitting months ago en masse, financial chaos, huge debts.

No one selling their skills to strangers — basically what we do when we work without a steady, secure salary and benefits –– can afford to be wilfully ignorant about the ethics and financial health of their clients. It’s why finding and using reliable networks of writing peers is crucial — intel!

 

Everyone who wants to freelance needs savings!

 

 

 

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In other recent freelance writing news…

— Was excited to write about a cool new Montreal company last year — it, too, just went bankrupt. I successfully re-pitched as “What happened to this great idea that sucked up $17 million in investments?”

— Was coaching a young writer for about six weeks but that work (and income) abruptly ended when the student ran out of money.

— Picked up a new anchor client (i.e. steady income!), and now scrambling to meet weekly deadlines for them.

—  Made the error of politely disagreeing on Twitter with a highly opinionated science writer who went batshit on me until I blocked her. Later, privately, a writer who knows her (and her shitty temper) reached out to comfort me. Both were strangers.

— Interviewed a fellow journalist/author via Skype about his new book, gobsmacked by the opulence of the room he was sitting in. Was this a luxury hotel? Was that his living room? Good Lord, what am I doing so wrong?!

— Last fall I’d hoped to pitch a great little story perfect for The New York Times’ Metropolitan section, one of the few sections left there I haven’t written, for but my radiation treatment/exhaustion scotched that. I finally traveled to Brooklyn to interview middle school students for it, with Jose as my chauffeur. It’s so comforting to have him help me!

— Finally emailed an editor with whom I feared we’d had a rough ending last fall. He wrote back immediately to say, No, not at all. Whew!

— Have a new book idea. Will have to see if it’s even worth writing a proposal.

— Sent an unsold book idea to a colleague and now await news if her agent is willing to read it or even rep it.

 

The usual hustle!

Money, money, money

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Storms can descend any time — without warning

 

 

By Caitlin Kelly

There’s an American expression I’d never heard before I moved to the U.S., a “come to Jesus” meeting, defined by one online dictionary as:

 

Any meeting in which a frank, often unpleasant, conversation is held so as to bring to light and/or resolve some issue at hand

 

Few subjects are as fraught with emotion, for many of us anyway, as money.

Here’s a great/long/helpful New York Times column on when, how and why to discuss money effectively.

My husband and I recently had yet another CTJ meeting about our finances, our budget and how — again — we might try to trim our expenses and boost our earnings. We both work full-time freelance, I as a journalist, writing coach and editor, and he as a photographer and photo editor.

And we’re both at an age when no one is likely to offer us a well-paid, full-time job in our industry and we do apply.

Survival is wholly on us.

 

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I love living on the Hudson River

 

Money is a proxy for power, influence, access, status.

It’s how many people — especially in the United States — measure success. If you aren’t flaunting your wealth, you must not have any. Loser!

It also buys food and gas and housing and medical care and clothes and shoes and school tuition and books and music and beer and trips to visit people we love.

We live (in a one bedroom apartment) in a very wealthy area, wealth-adjacent as it were — one man in our small church wrote a personal check for $250,000 to buy the new organ. The women here who stay at home full-time focusing all their Ivy educated energy on their children chirp at me: “Are you still writing?” as if my life’s work, albeit in a poorly-paid creative field, were a hobby, like macrame or raising chickens.

I grew up in a family that had a lot of money, at times. My father and his second wife worked in film and TV, the household income dictated by the whims of whoever they were trying to sell their talents to. We had, as I’ve blogged here before, cotton years and cashmere years.

My maternal grandmother, whose father was a Chicago real estate developer and investor, inherited a massive sum in the 1960s — and spent it as if it were something radioactive to be gotten rid of as fast as possible. Hence, I witnessed, with a mixture of awe and envy, an extraordinary solo life of gold-topped canes, lush furs, raw silk custom-made muumuus with matching turbans, enormous jewels and limousines everywhere. When she died, in 1975, my mother had to sell everything to pay off death duties to the Ontario government and decades of unpaid income tax to the Canadian and U.S. government.

I own only two objects that were Granny’s — a 60’s-era gold ring and an antique pocket watch. Interestingly, Jose’s only family object is also a pocket watch, and a small black native American piece of pottery.

Jose grew up the son of a Baptist minister in Santa Fe, NM, in church housing, and attended four years of state university on a church-supplied scholarship.

I was lucky enough to have a monthly income at 18, thanks to that grandmother, just enough to live alone and pay my own way through four years of university, (plus a lot of freelance work.) I’ve had decades thinking/worrying about money every day and how best to manage it.

I’ve had staff jobs, two of them well-paid,  but knew they would never last. They just don’t, in our industry, especially if you don’t schmooze or flatter those in power.

 

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A cafe table in Montreal, one of our many pleasures…

 

For me, money is a tool: when there’s enough left over, you travel and renovate and buy a decent used car for cash and buy the best clothes and shoes and household goods possible because it can, and will, disappear overnight, and often without warning.

 

So you also save and save and save and save and save!

 

I lost income in 2018 producing two (unsold) non-fiction book proposals, then six months’ dealing with breast cancer diagnosis and treatment.

We do have decent savings, some of which — again — we’re going to have to access to survive 2019.

Our single greatest cost?

No surprise here for any American reader: $1,700 a month for our health insurance plus another $2,000 in co-pays (out of pocket payments) for specific medical visits.

It is more than our monthly mortgage payment —- and is non-negotiable. Even if we lived in a hut in the woods, we’d still need it.

 

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Both my parents grew up rich, and each promised to eventually leave me some of their money but one lied for decades and spent every dime on herself.

 

How does money — or the lack of it — play out in your life?

 

 

 

Why we’re all so weird about money

By Caitlin Kelly

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Few issues are as fraught with emotion as how we get, spend, save or give away our money.

If you don’t have enough to survive, every day becomes an emotionally and physically exhausting battle.

And when you live in a country devoted to bare-knuckled capitalism like the United States, if you don’t have enough, the social safety net is weak and thin.

The federal minimum wage is still an absurd $7.25 an hour — I’ve never paid any of my part-time assistants less than $12 an hour, even 15 years ago.

American unions now have the lowest membership in a century, even as one third of American workers lurch into what’s now widely and risibly called the “gig economy”, a jaunty and inaccurate euphemism for fiscal insecurity.

This week Richard Thaler just won the Nobel Prize for Economics.

From The New York Times:

 

Professor Thaler’s academic work can be summarized as a long series of demonstrations that standard economic theories do not describe actual human behavior.

For example, he showed that people do not regard all money as created equal. When gas prices decline, standard economic theory predicts that people will use the savings for whatever they need most, which is probably not additional gasoline. In reality, people still spend much of the money on gas. They buy premium gas even if it is bad for their car. In other words: They treat a certain slice of their budget as gas money.

He also showed that people place a higher value on their own possessions. In a famous experiment, he and two co-authors distributed coffee mugs to half of the students in a classroom, and then opened a market in mugs. Students randomly given a mug regarded it as twice as valuable as did the students who were not given a mug.

This “endowment effect” has since been demonstrated in a wide range of situations. It helps to explain why real markets do not work as well as chalkboard models.

Money is so often a proxy for other, often deeper, darker issues: power, control, status, humiliation, (why Hollywood power broker Harvey Weinstein could be a sexual predator and so many people who relied on his goodwill to help them get or stay rich remained silent for so long.)

I’ve been fairly obsessed with money for a long time.

It’s caused no end of drama within my family and I’ve been handling my finances alone since I was 19 and moved out of my father’s home to live alone in a large city and pay for university from my earnings as a writer and photographer, with a small monthly income from a grandmother.

It taught me very early to know my worth and to bargain hard for it. I still remember the joy of earning 18 percent on a Canada Savings Bond, whose value quickly doubled.

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One place I do spend money freely — travel

 

I also remember vividly being so strapped then that it took me months to save the $30 I needed to buy tights and slippers so I could attend a free ballet class.

My living expenses were phone/rent/tuition/books/clothes/groceries/answering machine.

No car. No TV. No cable.

My family has plenty of dough, but made clear to me to never ask for a penny of it, nor ever expect to run home for help. I inherited some money from my grandmother in my mid-20s, which helped me to to buy an apartment, a security for which I’m very grateful as I’ve bounced in and out of the job market, survived three recessions and work as a full-time freelance journalist — an industry now in complete chaos.

I break into a sweat when spending money on more than the basics; (except for making our home lovely and travel.)

My cellphone and computer are probably four or five years old, (no big deal.)

But our Subaru has 180,000 miles on it, is 16 years old and cost us $1,800 in repairs in recent months — so we’re finally about to lease a gorgeous luxury vehicle.

The thought of committing to anything beyond our monthly health insurance and mortgage payments is scary even though we have the cash, (money we’ve saved for years), and emergency savings, so this is not — as Thaler would nod knowingly — 100 percent rational thinking.

 

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Airfares? I’ll splurge on those…

 

Some of the financial challenges I see so many women struggling with:

1) being scared to ask for more (i.e. raises, bonuses, negotiating a higher salary or fees)

2) giving money and gifts to children and grand-children to their own financial detriment

3) under-earning because of sexism, racism or other institutional barriers

4) under-earning while taking time away from paid work to care for children and/or others

5) failing to understand the devastating financial impact of divorce and planning for that. I had a prenuptial agreement in my first marriage and could have ended up in very dire straits without it.

 

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Does handling and managing your money cause you anxiety?


 

Writing for money

By Caitlin Kelly

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“No man but a blockhead ever wrote, except for money”

— Samuel Johnson (died 1784)

Few subjects will so quickly divide a room than writers talking about how much money they make from their work.

If you write blockbuster fiction, made into Hollywood movies, you might own a lovely home, or several, and shiny new cars.

If you write non-fiction that hits a cultural or political nerve — like over-rated “Hillbilly Elegy” — you might also hit it big.

If you write poetry, you might get “paid” with a copy of the journal that deigned to accept your work.

If you’re a full-time freelance writer, as I am, you probably earn a fairly wide range of fees, unless you’re primarily writing for Hollywood, or the elite tier of top-flight magazines and/or producing a Niagara of material, with very little time off.

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There’s also a steady oversupply of people desperate to say: “I’m a writer!”

Blogging doesn’t pay most of us, (unless sponsored.) And yet, blogging here since July 1, 2009, has brought me more than $10,000 in income, teaching my skills to others. (I offer webinars.)

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My first book, published in 2004. As someone who grew up with no exposure to guns, I was deeply intrigued by this most American of obsessions

I began writing for money — for national magazines and newspapers — in my second year at university, in Toronto, where I was doing an English degree. It’s the center of Canadian publishing, home to most major newspapers and magazines. I just had to gin up the nerve to start approaching them, and one of the magazine publishing houses was, literally, a block south of campus.

I got my first assignment for a national women’s magazine after writing a furious letter to the editor, asking them to run better material. That editor, (bless her!) called me in for a meeting, and said: “I’d rather have you writing for us than to us.”

Yes, a hugely lucky break.

But I already had two years’ experience writing every week for our demanding university newspaper, so I brought developed skills.

The money I earned writing helped put me through university and paid my rent and groceries, living alone from the age of 19 in an apartment.

That taught me to negotiate for better pay, early and often.

I also overheard an editor pleading with a fellow writer, (a man, older than I), out-earning me for the same kind of weekly column by 50 percent, not to quit.

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My second book, published in 2011

So when I see — and I see it every day — writers accepting shitty pay, or no pay, and refusing to even try to negotiate for more, or to build their skills to a level they can ask for more and legitimately get it, I lose it.

I also see some Big Name Writers telling the world they have no savings and no money put aside for retirement, as if to glorify the de facto penury of being a writer.

Bullshit!

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If you have no savings and are perpetually broke, even while earning your full-time living as a writer, consider:

Your skills are weak and no one will pay you properly for them — since so many competitors do it better, or say they can.

You’re unwilling or unable to negotiate higher rates.

You’re living beyond your means, possibly sabotaged by high rent/mortgage in an expensive city; (Toronto, New York, London, San Francisco, Vancouver.)

You didn’t realize that writing for a living is no less serious — and often just about as glamorous — as sanitation work. Just because you enjoy it doesn’t mean it isn’t work. (Sanitation workers, at least, have a union, paid sick days and a pension.)

You haven’t done enough work yet to acquire a consistent track record of achievement, when it’s more reasonable to ask for higher pay rates..

You have a weak or inexperienced network — or people don’t like and trust you enough (yet) to refer you to their decently-paying contacts; most of my work now comes through referrals.

You need to improve your marketing and sales. While people think writing for a living means actually writing, about 75 of my time and energy is spent finding and qualifying new clients.

You need more help with domestic chores or other tasks. It takes time and energy to find well-paid markets for your work, often in addition to teaching.

You write only for low-paying outlets, almost all of them digital, offering $50 or $100 or $300 for long, reported stories, (some writers think this is a lot of money). No one can earn a living at these rates, or work a healthy number of daily/weekly hours to do it. Aim for a higher-paying mix — agency work, print work, non-profit or custom publishing or branded content. 

You might need a job, part-time or full-time, until you have a decent financial cushion and can turn down low-ball offers. You can’t refuse lousy jobs and terrible payment if you’re always desperate for the next gig.

You’re too slow! You have to know your minimum hourly rate and stick to it. If you waste  time or work inefficiently, you’re cutting into your profit margin. It’s a business!

Caitlin Kelly, an award-winning non-fiction author and frequent contributor to The New York Times, is a New York-based journalist. Her one-on-one webinars and individual coaching, by Skype, phone or in person, have helped writers and bloggers worldwide; details here. Contact: learntowritebetter@gmail.com.