A middle-aged man dreaming of the day when he can stop begging for scraps and write for a living.

Friday, April 25, 2014

Struggling With Money

It's been a common talking point over the past twenty years: Americans have a spending problem. We have too little money saved up and too many of us have nothing saved for retirement. Everywhere you look the message is the same: our debt to savings ratio is too high and it's a serious problem.

Yes, it is. But why are we having this problem? I find it very curious that when I try to track the changes to the cost of living I get a lot of confusing data. We have easy graphs to track spending for the federal government, graphs on health care and driving and gun violence and just about anything else you could want that's pertinent to our daily lives. But not so much for inflation and prices even from official government sources. It's like they don't want us to know how much we're spending just to meet our daily needs.

I live in a nice apartment with one and a half cars (my Lady got her scooter), very little debt (which takes some doing, believe me) and a few creature comforts. I don't live in anything resembling luxury and it took me a long time to get some very good deals, which includes extremely low rent for the area where I live. If I were to move closer to my work as I really want to I'd have to pay half again what I do now in rent and related expenses. Every time I manage to accumulate some savings something inevitably comes up and makes it disappear again. I've taken to tracking my spending and expenses in a spreadsheet, and even using that to identify excessive spending the prognosis isn't good. I simply don't earn enough to do much more than tread water even if I were to cut everything back and live like a monk. Consequently I haven't a prayer of coming up with the 20% deposit for a small home without putting myself at the mercy of predatory lending practices.

When my father was my age he was making approximately a third less than I am today. Yes, my parents also struggled with money but they had a three bedroom house they were almost finished paying off, three cars and two teenaged sons. So what changed between 1986 and 2014? Six years ago someone I have come to admire very much was able to put the numbers together and figure it out.

Yes, we have a spending problem but the problem isn't that we're being irresponsible with our money. The problem is that we're spending too much just to break even. Between the rising cost of living (the CPI doesn't track food or transportation costs!) and our stagnating wages there simply isn't any left over to save. It's not that we're eating out more often, because we're not. It's not that we're buying more toys, because that isn't it either. It's not that our houses are too big or any other factor suggesting that we're too greedy for our own good. The problem is that we're like a frog in a pot of water and someone is slowly turning up the heat. They don't want us to notice before it's too late to jump out.

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