Organically Inclined » debt

Are You Poor?

Mish — Sat, 21 Mar 2009 11:00:34 +0000

When we moved back to Vermont in 2003, I was terrified. Without a steady job, I didn’t know exactly from where our money would come. We were always on what I believed to be the edge of poverty. But then I started to think about it. Were we truly poor?

Everywhere I look “books, radio, television” there is someone telling me how to “eliminate debt” or “build wealth.” And the majority of these programs are geared for people who have high-paying jobs, huge homes and new cars and are feeling the “burden” of too much debt. What I don”t see a lot of are books or shows dedicated to helping people live ” and live well – off $10 an hour. In order to be on a “debt diet” one needs to be able to acquire debt. I dare say that most financial experts would argue that you can”t live well off $10 an hour. Those families who make $10 an hour are impoverished and should be educated as to how to make more money. And that”s where the help ends: “Get a better job, get some debt and then I can help you.”

So what is poverty?

Is it families who try and exist on Mom’s salary of $10 an hour? Or is it not having food in the house? Or is it not having the house? Is it not having electricity? Running water? Heat?

I read a story in the newspaper once about a man who didn”t have heat and was in line at soup kitchen. He didn’t have any money because he had to pay his electric bill and for his cable TV.

Think that’s crazy? How many Americans, when asked, do you think would pause if they were asked if TV, the Internet or their cell phone was a luxury or a necessity? I bet you just did. How many times have you cut back on your budget for groceries so that you could pay the credit card, cable TV or cell phone bill?

A professional man, let’s call him “Ben,” I once had a conversation with told me that cutting back on groceries was the only way to cut back on spending because all of the other expense were fixed. The car payment had to be paid, the credit cards, the TV. All of them had to come first.

But did it ever occur to him to eliminate the car payment by buying a used car and paying cash for it? Or to cut up the card, turn off the TV or use the Internet at the public library?

But Ben was right in one regard. Food is one area where we as a nation can cut back. I had always thought of myself as being pretty frugal. My family doesn’t eat out much and I don’t buy a lot of junk food. So I did a little “receipt” searching and after recording each and everything we spent money on for about two months, I discovered that I spent a little over $1,000 per month in food costs alone. No, we didn’t eat out at restaurants, but how many times on my way to a soccer game did I buy Gatorades to go all around, plus a box of granola bars or a bag of chips? That’s an easy $10 or $15 nearly everyday.

After careful consideration of our spending habits, I was able to cut our food spending, “all of it,” down to an average of $300 a month. That’s less than $100 a week for seven people. I also found that we eat healthier on less money than we ever did before.

By eating healthier “and teaching our young and new mothers how to feed their children healthier” we will curb our need for medical attention. I am horrified by the amount of mothers, particularly teen mothers, who are talked into formula feeding their babies because someone tells them that their baby will be healthier, or will gain more weight or whatever. Not only is this untrue, but by breastfeeding a child throughout the child’s first year or more (no, not until kindergarten!), a mother can, on average, save as much as $160 month. That’s an electric bill and a phone bill! That’s also money that can go towards the other children in the family’s food budget.

Children who aren’t breastfed are more susceptible to a wide range of medical issues from food allergies to illnesses. All of which put single working mothers in precarious positions with their employers because they constantly have to take off work to take their little ones to the doctor. Another point to be made is that if doctors didn”t hold such “regular” bankers hours, mothers who work might not have to take time off to get their little ones there ” thus reducing the image that such mothers don”t care about their baby”s well-being.
Our nation”s desire to consume is overrunning a mother”s desire to care for her child.

And further, we have begun to believe that poverty is when you can”t afford a new car. Or cable TV. That’s not poverty. That’s just living. We can’t all have everything and until we realize that, we can’t have happiness.

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Technorati Tags: debt, financial crisis, frugal, homeless, poor, poverty

Debt Reduction Blog Carnival

Mish — Mon, 04 Feb 2008 13:41:54 +0000

Another great carnival…this one is hosted by Broke Grad Student.

http://brokegradstudent.com/carnival-of-debt-reduction-125-super-bowl-xlii-edition/

Technorati Tags: blog, debt, miscellaneous

The $100 Christmas? Well, not quite…

Mish — Mon, 17 Dec 2007 14:50:02 +0000

I did some Christmas shopping over the weekend. I decided to suck it up and brave the crowds – and we did, my daughters and I. But it was some of the most difficult shopping I’ve ever done, because I couldn’t just buy anything. I kept looking at all of the cheap, plastic crap and would think – “yeah, this will be broken in a week” – or “I’ll be sweeping this up off the floor in May.” Not to mention the fact that my children just don’t want that much. That’s one of the great benefits of not having television – they never see the commercials for all of the cheap plastic crap that they used to “need.”

Now, my 3 year old is difficult because I do want to buy him everything, but I have to stop myself and remember that there is a very real joy curve when it comes to Christmas. There is the Christmas Eve build-up. We open one small gift and talk about Santa. Then there is the sheer thrill of Christmas morning when the littlest ones come downstairs and see all the gifts under the tree. We open stockings and eat candy for breakfast and then start to pass out gifts. But how many times in the past have I made my little ones wait to assemble things until everything was opened? And then they get exhausted – or overwhelmed – and the thrill is gone. And now we’re just crabby.

How can such a wonderful day turn out so badly? Well, I believe it’s the joy curve. A small child peaks out with joy after just a few gifts. And last year, I decided to take advantage of it. We bought just a few, well thought out gifts for each child. We assembled and put together as we went along. We enjoyed the morning.

And you know what? We had a great time. We enjoyed each other and the gifts we each received. We spent less money, ate more food and had a wonderful time all around. My kids said it was much more fun than the frenzy that had ensued the year before when our whole family gathered and there were more presents than anyone could handle. They liked it quiet and laid back, they said.

We also didn’t go into debt. I didn’t sign up for one credit card – even to get the 10 percent off. Because really 10 percent just isn’t worth it. So not only did we have less madness – we went into the New Year debt-free.

Now, I’ve read bill McKibben’s “Hundred Dollar Holiday” and while I agree with many of the principles, I’ll never be able to get out for $100. But I’m OK with that. I like the magical part of Christmas where you receive things that you don’t get in the normal course of your year. I like to surprise my children and see their faces light up when I get them something truly cool. But I will not go into debt for it. And I will never again buy stuff just so they have more under the tree.

I always ask my kids at the beginning of the holiday season, “If you could only get one thing for Christmas, what would it be?” And it really makes them think.

We also spend a lot of time doing family things (not that we’re not pretty close already). We make it a point to load up in the car and look at lights; go to a fun family movie (quite a splurge for eight of us!); and we bake a lot!

Technorati Tags: christmas, debt, frugal, miscellaneous, money