Wednesday, March 18, 2009

Doing Financially Well During a Recession

In case you’ve been hiding under a rock for the last year or so, the U.S. is in the middle of an economic crunch. Personally, I have fared pretty well so far. I would go so far as to say that I’m doing ‘good’. Certainly, I’m in the best financial shape of my life so far. I still want to improve this in the future, but for right now, I’m doing pretty good.

I understand that as I write these words, I am speaking from a position of privilege. Not everyone has had the opportunities that I have had, and not everyone has fared as well through the current economic crisis. Just bear with me, as I get out some thoughts that have been floating around my head for a couple of months.

Looking around at current news, it seems that it is assumed that everyone in this country is down on their luck. Thousands of people have lost their jobs and we’re hitting double digit unemployment rates. I am not one of those people. Should I feel guilty for doing well financially when it seems everyone else is having such a hard time? Intellectually, I know that the answer is no. I’m not living high on the hog by any means, but I still have a nagging voice in my head when I spend money on ‘luxury items’, such as blu-ray movies or the new computer that I just purchased.

As am example, I was talking with an acquaintance about the new computer. The question of games came up, and I admitted that while I’ll be using the new system for some actual work, I picked out components specifically geared towards playing games, which increased the price significantly. He than made the comment that it must be nice to have money to throw around. I mumbled something and ended the conversation.

My first reaction following that conversation was to second guess myself and try to figure out if I was flaunting my money. No, I wasn't. Somehow the conversation had turned to computers and I mentioned that I had just purchased a new one and that it hadn't arrived yet. The conversation progressed from there. So, yes, it is nice to have some money, but I fail to see why I should pretend to be hurt by the economic crunch when I am not.

Perhaps the theory is that we need to show solidarity with others who are less fortunate and are going through hard times. I find that to be complete bullsh*t. My pretending to struggle financially isn't going to do anyone any good and it probably won't make anyone feel any better, other than in a miserly loves company kind of way.

So why the everyone must be down on their luck attitude? I have come to the conclusion, and I may be completely off base here, that the people hardest hit by the economic downturn are people accustomed to a higher standard of living than I am. I also have a hunch that this is why it has been dominating the news so much. Things get silly when we try to put on struggling airs.

Magazines are filled with articles offering 'money saving tips'. Some of the tips are good, some are silly, and all are aimed at the middle to middle-upper class; people with less money have already learned how to make it stretch and have little else to cut from their budgets.

We now have the phrase 'staycation', meaning people can't afford to take a 'real' vacation and instead stay home during their time off. This, of course, assumes two things; first, that you have a job that allows you to take (assumedly paid) time off, and second, that you could previously afford a yearly trip. I have come to realize that most of my vacations have been 'staycations'.

To top things off, human interest stories abound, all showing previously well off people who have hit hard times. This usually involves a lovely family standing outside of the home that they can no longer afford, with a giant SUV in the driveway, talking about the impending foreclosure of their home. Now, it may be because I am currently very frustrated with my inability to afford my own home, but, seriously? It's never a struggling family that purchased a modest home. It's always a huge house in a lovely neighborhood.

I remember seeing a human interest story last summer on the local news. It involved boaters on Lake Champlain who could no longer afford to buy fuel for their gas guzzling boats. Instead, these poor people were forced to hang out in their boats at the marina, as opposed to tooling around the lake. The story was meant to garner sympathy, but it had the opposite reaction in me.

The thoughts that I'm struggling with are that I, personally, have not been hit by the recession, and for that fact I'm told that I should feel guilty. I also fail to see how pretending to be hurt financially will do anyone any good. Finally, I find it silly and pretentious who we point to as evidence of economic hard times.

I'm interested to hear other people's thoughts on this.


BlueMule said...

Interesting discussion. I think the key reason that you or I have not been negatively impacted by the recession (ignoring the damage my retirement has taken because of the stock market), is that we work in fields that are not taking as much damage as others. We're lucky that we chose to work where we have!

I believe that we should be grateful for our luck and that our hard work has put us in relatively safe positions, but I do not feel that we should "pretend" to be suffering.

I think your point about the hardest hit being the folks who were living beyond their means is probably legitimate, although I'm sure there's a lower level of income that is taking it hard also. Americans have been buying on credit far too long and it has finally come around to bite them in the ass. As an example, I was listening to a woman complain about a horrible situation she's in with regard to her home equity loan. She and her husband are only part way completed in building a house (living out of a tent) and the bank is now calling in that note. She's pretty screwed. In the next breath, she just told me that she bought a used SUV for $25,000. I found myself biting my tongue during this conversation. We bought our cars for $5000 each with high miles because we don't have the money to buy a more expensive car. They run great. They work well.

As our friends know, Farmer Girl and I have been struggling financially for decades. The reason? Almost entirely bad choices. Money spent where it shouldn't have been spent. Money not paid attention to. As a culture, it seems to me that this recession will be good for us, because it will teach us to live within our means.

I'm also a firm believer that we need luxuries. They are what keep us from feeling like work is for no other purpose than the daily grind. This past fall, I finished up a second job I had been working for months, and half of the money made bought me a 42" television. It was a lot of money for that stuff. But, since we don't travel (staycations rule) and we rarely eat out, this is the luxury that was right for us. I have no regrets, because during our slow season, we watch a lot of DVDs.

Most of the money I make pays my bills. Why shouldn't I be allowed to have one or two nice things?

Anonymous said...

Okay, I mostly just wanted to say the last two word verifications I got were: pooplac, and minglap. I think you probably know who is writing since you know why I would think such gibberish was funny. I feel bad that people are hurting from the recession, but I think the way the press covers it is a bunch of pooplac. I don't feel bad for people who have to sel their million dollar homes, but I do feel bad if someone is losing their apartment.
PS-I'm totally paranoid that I'm going to make a grammatical error,:;"?! so I will not use my real name. Just call me Minglap.