Balance
The end of every calendar year has always been a time for me to sit back and look at the past year, and other year-ends past. There have been some great ones, and some not so great ones.
This year, looking back, it seems like we have been on a money jag in this country since about 1985, give or take a few years. Is it my memory or did the big money shift during the Reagan and Clinton years really change this country?
Prior to the mid-1980s, I don’t remember many people owning BMW’s. I remember the first time I rode in one that was owned by a friend. I was in flight school in Pensacola. The owner of what I thought was an amazing car was a Coast Guard officer who had just come off a drug interdiction tour in the Gulf of Mexico. I jokingly asked him if he had been pocketing and selling some of the drugs they had seized. I couldn’t imagine affording a car like that. He wasn’t amused.
But seriously, a BMW? We were kids, 23, 24, making what we thought was a great income, with flight pay, I felt rich. But own a BMW? Crazy. Today it seems half of all new college grads have one.
Owning a home. This is where I am certain we have lost our minds. McMansions, 6000 sq ft homes with 15-foot ceilings for a couple with one child, or empty nesters. Mortgages that are insane. Sure our homes say something about who we are, what we’ve done, how far we’ve come, but come on.
Looking back, I don’t remember things like McMansions. These things have popped up in the last 20 years. Of course, there was the occasional large home in our town with a nice yard, but not entire cow or cornfields full of them, 15 feet apart. I must be missing something. Multi-million dollar homes right on top of the one next door. Strange.
Credit cards and financing. Recently I started using cash again. Not for everything, you can’t use only cash anymore, but I have been trying to avoid the urge to just “put it on the card.” I have never run up credit card debt, but I have a reason for my change of heart.
My grandfather had what I use to think was an arcane philosophy about buying. Pay in cash so you have to count it out. By counting it out, he felt you got a real feel for how much you were really spending. Ever counted out $23,000 in $100 bills?
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INTERNAL ENDORSEMENT
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$23,000 doesn’t seem like a lot to spend for a car, not anymore. Count it out in bills sometime; it’s a hell of lot of money. After state, local and federal taxes it’s about $40,000 dollars. Yet, we sign it away as if it were a bargain.
Charging everything is a relatively new concept, great for retailers, bad for buyers. Growing up we had a charge account at the local food store. It was paid off every two weeks when my father was paid. Other than that, cash was the way. People saved to buy the next car, saved to buy a color TV, you saved a little to get a new coat. You just didn’t run up bills. Running up bills was a bad thing.
Seems we’ve lost that sense of paying for what we need and want. But there isn’t any difference anymore. If we want it, we need it.
Without sounding like a grumpy old man, if people were happier or more fulfilled because of this spending explosion I would be all for it. But most Americans are miserable. Beaten up, run down, used up. Being in debt does that to you. It wears you down, it beats you up and you feel really bad. Nothing feels better than being debt free, or almost, and having some money in the bank. Oh, we don’t do that anymore, either.
Add to the equation the downturn we have seen this year in the economy and folks have moved from unhappy and unfulfilled to scared, really scared. For most people this is the first really bad economy they have ever seen.
There are people I work with who have never been in a bad economy, not like this one. They missed the late 70’s and early eighties and are just now, in their thirties. Their parents didn’t live through the depression. My co-workers are beginning to understand what the terms unemployment and recession really mean.
A friend of mine just recently returned from three years in Australia. He had a job that required him to be there full time. He said something about the Aussies that really struck a chord with me. I asked the usual, “How did you like it.” He replied, “It was really nice, it was nice because they aren’t all trying to be rich. They earn their living, not a fortune, but a living, and seem happy with their lives.” Maybe I’m just feeling a little sentimental because it’s the holiday season, but that sounds pretty good to me.
It sounds like balance. We used to have that in this country.
If everything does happen for a reason, then we have lots of reasons for a good jolt to get some reality back into our thoughts about money. Maybe a return to some semblance of balance can be the best outcome from our present money problems.
Here’s to a great 2009 and more balance.
Steve