As some of you may remember, I wrote a post for Blog Action Day last year when the theme was the Environment. That was easy. I had a lot to say about that. This year they emailed me to tell me the theme was Poverty. I had to think a bit. Did I have something to say about poverty?
Well, yes, of course I did. As I thought longer, I realized I had quite a bit to say. But I’m going to try to stay focused and not go off on some long diatribe that will take you six hours to read. We’ll see how I do.
My first thought is poverty is a very relative thing. Let me illustrate what I mean by that.
Just a few months after my ex-husband and I were first married, the company he worked for lost their government contract. He kept his job for a few months after that while they tried to get the contract back, but attempts were fruitless and the company ceased to exist. That was the end of his job. He was unable to find another one and ended up writing, self-publishing, and selling rocketry books to make a very meager living. Meanwhile I was working as an artist in a bead store, designing and making jewelry. The pay? Let’s just say I was not fairly compensated.
For several years we were convinced we were going to end up living in our cars within the next 6 months. But somehow we always managed to scrape money together out of somewhere. We never got our power cut off or our phone service cut off. We always managed to pay our mortgage.
But we ended up over $38,000 in credit card debt. It took years to get that deep in debt, mind you. For a long time we didn’t even know how deep in debt we were. It was too depressing to think about it or actually look at the numbers. We just paid the bills.
We had no health insurance. I didn’t go to the dentist for seven years. I fell once, hard, when I was going down the basement stairs, and I thought I was already on the floor but I was still one step up and I took a step forward. As I was falling, my first thought was, “Oh, shit, if I broke something, I’m bankrupt!” After I hit the floor, I was in a lot of pain. I don’t think I broke anything. I was in pain for about two weeks. I didn’t go to the doctor though. I couldn’t afford it.
But we had a roof over our heads. We had clean running water and indoor plumbing, and hot water. We had a stove, and an oven, and a furnace. We had a refrigerator. We had clothing. We had shoes. We had winter coats. We had food to eat. We had glasses so we could see.
So, were we poor?
Well, it’s all relative. It depends on who you compared us too. If you compared us to someone in some developing nation, we were much better off.
If you compared us to someone else in the US, well, we were better off than some people, but a lot of people were better off than us.
If you compared us to someone in some other industrialized country, where everyone has healthcare, they’d probably be better off, at least if they fell down the stairs. There are rich people and poor people in other countries of course, but the gap has gotten much wider in the US in recent years.
Eventually I realized my job in the bead store was going nowhere and I went back to school to get another degree, which I hoped would be more useful than my BA in linguistics had been. I got a BS in geography and $14,000 of student debt. The geography degree did get me a job with health insurance (but not dental insurance, which I never understood. Is my mouth not part of my body?), but it only paid $19,000/year, and I had to drive an hour each way. Oh, and I actually had to pay $2000/year for the health insurance. It didn’t take me long to start looking for another job.
Two years later I found a job close to home which had health insurance and dental insurance. I didn’t even have to pay for the health insurance. Yeah, the salary was only $17,000/year, but I no longer had to put gas in my car every three days. That made a huge difference.
We slowly paid off the credit card debt and my student loan by throwing massive amounts of money at them and living like total misers, paying much more than than the minimum to pay off the highest interest card first while paying the minimum payment on the others, and when that was paid off closing that account and picking the next highest rate to throw massive amounts of money at. We accepted balance transfer offers only when they were really good deals (no increased rates later — we read the fine print very carefully), and transferred the highest interest card’s balance onto the new card, and if that had paid it off, closed the account. We paid the same total amount every month; the distribution just changed over time. It took a few years to pay off all the credit cards. In the end, we each had one low rate card left, paid off in full, that we would only use in emergencies.
I recommend the approach we took to anyone trying to get out of debt. Don’t think you have to wait until you get a huge salary or win the lottery or something. You’ll probably be waiting a long time. Use the money you’ve got and spend less.
Now, I’ve read a lot of hints on ways to save money, and most of them just annoy me because they were written with the assumption that I’m spending a lot more money than I ever have. If hints like “quit buying a latte every day” will save you money, that’s great, but I don’t even drink coffee, so that doesn’t do me any good. I drink water. Tap water. I’ll be damned if I’m going to buy bottled water. And I also sometimes drink decaf tea if I’m at home. You know, the kind you make yourself with a teabag that comes in a box of teabags. Cheap.
Anyway, the things I did to save money were stop eating out except for special occasions, stop buying so much processed food, and actually learn to cook. It’s amazing how much money that saved, and how much weight I lost too.
Eventually I started bike commuting for environmental reasons, but that saved a lot of money too. After a while I sold my car because I just didn’t need it.
Unfortunately my husband and I divorced after all of this, but at least we were debt-free when we went our own ways, and we had learned to be frugal so we would be able to live on our individual meager incomes.
I’ve been at my job for ten years now. I’ve had one reclassification, one promotion and ten years of raises, so my salary is more than I’ve ever earned before. Enough so that compared to the entire world, I’m in the top 5.61%. But compared to the US? Well, I’m solidly in the lower middle class quintile. I earn enough so that I can afford to live alone, but only because I live a very frugal lifestyle. I don’t earn enough to live like a “normal American.” For instance, when I sold my car, it was because I simply didn’t want it anymore. I still don’t want to drive, but if I did, I couldn’t actually afford to own a car now. It’s not just the cost of the car, it’s the registration, insurance, maintenance, parking, and of course let’s not forget the gas. The average cost of owning and operating a car is now over $8000/year. There is no way I could afford that.
But then, I probably never could. That’s probably a good part of how my ex-husband and I got over $38,000 in debt. Charging car repairs, oil changes, gas… Right. When I had a car, it never occurred to me to ask, “can I afford a car?” I had just grown up in the culture which told me “you must own a car.” I’m so glad I eventually realized it just wasn’t true.
I just feel a bit poor sometimes, like when I find out I’m getting a 3% raise but the rate of inflation is 5.6%. Ok, a raise is good, but…but…but I’m not even keeping up with inflation. But then I wonder how they calculate the rate of inflation? How much of that is based on the cost of gas and other things which I don’t buy? I have seen the price of groceries go up a bit, but I was able to grow some of my own food and all of my rabbit’s food in my garden this summer.
Now that I have a larger kitchen I’m able to stock up on non-perishables when they’re on sale, e.g., Meijer organic whole wheat spaghetti (a great substitute for Chinese noodles!). And now that I’ve been cooking longer, and especially since I’ve gone vegan, cooking is really more enjoyable. I experiment more, and I have a better idea of what will go together, just off the top of my head, with whatever I have on hand. Food can be cheap and really good!
I feel a bit poor when I realize that I probably won’t be able to afford to paint my walls until…well, probably a few years from now.
But hey, I’ve got walls. I’ve got a roof over my head. I have clean running water and
indoor plumbing, and hot water. I have a stove, and an oven, and a furnace. I have a refrigerator. I have clothing. I have shoes. I have a winter coat. I have delicious, healthy food to eat. I have glasses so I can see. I can pay my bills.
I live in a low-income neighborhood, because honestly, where else could I afford to live? It’s a nice place to live, and it’s a safe neighborhood, and some people have good incomes, but a fair number don’t. I have one neighbor I’ve gotten to know fairly well. She has some problems that have affected her ability to work a steady job, so she does odd jobs for people. She does all kinds of things, gardening, giving people rides, washing windows, cleaning houses, you name it. I’ve hired her to do a couple of things that I wouldn’t be able to do myself, e.g., she got all the rocks I used to edge my garden beds. She’s busy. She works hard. But her income is erratic and she hasn’t been able to keep up with her bills. Her power got shut off. I lent her some money so she could pay the minimum amount on the same day they shut it off so they wouldn’t charge her an additional fee. Two months later they still haven’t turned it back on.
I can’t afford to pay her for any more odd jobs or lend her any more money. But I don’t feel so poor when I compare myself to her. She’s poor. I’m not poor.
But then I read the news about robber barons on Wall Street wanting a $700 billion bailout. Wait, hang on. We’re talking about executives who make more money in one month than I will earn in my entire lifetime, they’ve screwed up so badly at their jobs that they should be fired, but they want to keep their jobs, keep their huge salaries, and they want me to give them my money?
I’m really good at my job. Still, every year my raise is less than the rate of inflation. It’s like I’m getting a pay cut every year (they started having employees pay a portion of our health insurance premiums years ago, and the cost of our prescription co-pays also went up, so that was like another pay cut). I don’t think I will ever be able to retire. Even though I work for an institution with a really good retirement plan, it’s based on the amount of my salary, and my salary is low. I’m pretty sure I will have to work until I die.
I can’t afford to travel. I hear people talk about where they went on vacation, and a part of me thinks, “oh, you can afford to go somewhere…” I can’t.
Day to day, I don’t really feel poor. I’ve got my routine. The way I live is extremely frugal, but it’s just normal to me. I only feel poor when someone with a lot more money than me thinks they deserve more, and especially when they think they deserve some of my money.
The Wall Street bankers have plenty of their own money to use to bail out their banks. Let them try living on my salary for the next few years. I manage. No, I don’t buy fancy suits or eat in expensive restaurants. I buy my clothes in thrift shops, and I buy about $40-45 worth of food each week and cook it all myself. No, I don’t drive a luxury car. I take the bus and walk everywhere I go.
So let them live on my salary. They don’t have some god-given right to be obscenely wealthy.
Next, end the war already so money can be spent on other things. It’s bad enough that people are dying for a war that never should have started, but spending so much money on it is draining the country. States don’t get the funding they used to. Infrastructure is crumbling. Universities don’t get as much funding from states as they used to because the states aren’t getting as much money. Tuition has to be raised. And university staff get smaller raises every year, much smaller than the rate of inflation, so they’re essentially pay cuts.
I’m sure this happens at other institutions as well. I just happen to work at a university, so I’m writing what I know. I do ok at living within my means until an expense comes along that I don’t regularly have, like when I needed new glasses (good wool, bifocals are expensive!), or when I want to save up for a large expense, like painting my house. I try to look at where I could cut expenses to free up some money, and at first glance, I have a hard time seeing anywhere I reduce my spending. But sometimes OCD is an advantage. There’s always somewhere.
These are the things I’ve been doing already, either for several months, or several years, or my entire life, that help me spend less money than “normal people.”
- I’ve never had children.
- I don’t own a hair dryer. I have thin, fine, curly hair that actually looks best if it air dries.
- I cut my own hair. This obviously wouldn’t work with all hairstyles, but with my hair? Takes about 5 minutes.
- I don’t wear make-up or perfume or nail polish or any of that stuff. I don’t dye my hair. I do wear a moisturizer with a sunscreen on my face because if I don’t, my skin gets so dry it hurts, but that’s it.
- I make my own lunch to take to work.
- I hardly ever eat out.
- I use cloth napkins, including one that I keep in my lunch container.
- I eat a vegan diet except for honey in my tea.
- I only drink water and decaf tea, and very rarely, juice. No coffee. No alcohol. No pop.
- I buy nearly all of my clothes in thrift shops.
- I do not and will not own anything that requires dry cleaning.
- I quit driving a car years ago. I take the bus and walk everywhere I need to go. I use my employee ID as my bus pass, so my transportation costs are zero. Less than zero actually, since riding the bus gives me time to knit. I end up with socks.
- I don’t buy very many books anymore, only ones I know I will want to keep. I usually get books from the library now. So if I buy a book, it’s really special.
- I don’t have any newspaper or magazine subscriptions anymore. There’s so much information online, I don’t have time to read half of what I want to read. Occasionally I’ll buy a single issue of Interweave Knits or Spin-Off if there’s something in it I want, but not very often.
- I don’t own a television. I don’t want one.
- I rarely go out to a movie, maybe once a year on average.
- I have a checking account that doesn’t charge me any fees and allows me to use a debit card as a credit card.
There’s probably more. Like I said, I’ve been doing most of these for so long, they’re just a part of how I live. I don’t really think about them. They don’t make me feel like I’m depriving myself. I’m listing them here partly so they may be of help to someone reading this. But also partly to illustrate my sense of frustration when I felt I needed to cut my expenses more. More? What else was there to cut?
Well, there were a couple of things, as it turned out. I have a cell phone. I use it about 4-5 times a year. I am really just not a cell phone person. But I have needed it when I’ve needed it. I had the cheapest plan I could find. 20 bucks a month, although after taxes and whatnot, it was more like $23. Well, that might be a good deal except for the fact that I hardly ever use the damn thing. I make a call, and it was like, what, a $60 phone call? That’s crazy. So I realized I had to find something cheaper.
I started looking at prepaid plans, and they all pissed me off because they expired after 90 days. Until I found the one that was perfect for me. T-Mobile’s $1 a day prepaid plan. I pay a dollar only on the days I use the phone, plus 10 cents a minute during the daytime if the call is to/from a non-T-Mobile number. And there’s no expiration on the money I pay. So the next 3 minute call I make will cost me $1.30 instead of $60. And most months my cell phone bill will be zero instead of $23. I switched to that pretty fast.
Next, I enrolled in a Flexible Spending Account for my Healthcare costs, which is something I should have done years ago, but the idea of losing any money left over at the end of the year made me panic. But I’ll be able to use the money in the 2009 account through the end of March 2010. And I finally realized, even if I do lose a few dollars (not likely), it will still be less than the money I save from all my healthcare costs being tax free.
I have this problem sometimes. You know when they talk about people not being able to see the forest for the trees? I see individual trees, leaves, bark, lichens, mosses, fungi, soil, snakes, turtles, deer, squirrels, chipmunks, birds, ferns, wildflowers, really cool rocks, shrubs, butterflies…I could go on and on and on. You see what I mean? Where do people get the idea that a forest is only trees anyway?
Um…my point was I tend to get so engrossed in the 12,348,692 details that I sometimes have a hard time focusing on the larger whole. But I realized with my assemblage of chronic conditions, I’m spending about $100 a month just on doctor’s visits and prescription copays right there, on average, and that doesn’t even count my other costs. Well, shit. Ok, yeah, time to make that pre-tax.
Also, I realized that since it takes me a while to get around to watching my Netflix DVDs, while I really love Netflix and didn’t want to give it up entirely, I’d be better off switching from the $8.99/month for an unlimited number of DVDs one at a time to $4.99/month for two DVDs/month one at a time. Most months I probably wasn’t getting around to watching more than two anyway.
So right there, those three changes are going to save me roughly $70 a month. Nice. It’s not enough to make me wealthy, but it means I’ll be able to paint my house eventually, and after that, save and throw extra money at the mortgage.
I still may never be able to retire, but if I can be healthy and have enough money to live with a roof over my head and a furnace and hot running water, etc., etc., while I have a job I enjoy, that’s good enough, you know? I don’t need much. I just don’t want to end up living in a cardboard box. That would definitely be poverty.