Affording Life

I read this article today about middle class financial fragility. It really struck a nerve for me so for this post I’m going to depart from my usual light(er)-hearted tone.

The article contains many solid points, but I feel the author missed a key aspect. I wanted to voice my thoughts on the subject and, oh hey, blog! Kinda long, but who doesn’t like to hear themselves speak?

Ahem, moving right along…

The author talks about the hardship created by a stagnant economy, unexpected life events, and the bad choices (example: credit card debt) that helped lead to such a poor situation for the middle class.

But he neglects to mention sufficiently those of us who have inherited this economy.

I would expect that the credit use by boomers and gen-x-ers drove prices up in every spending category in the 80s, 90s, and early 00s–as per the concept of supply and demand–but did so in an artifical way. That is, the demand was higher than it otherwise could have been, so the prices are higher than they could have been without credit use.

He also said that he had no other way to pay for his kids’ college educations than to take the money from the kids’ grandparents. Again, he neglects to mention that his kids are the lucky ones. His children are a part of my generation, and most people in my generation who went to college didn’t have such an option. Most of us middle class kids are bearing the burden of our own student debt, in addition to inheriting a crappy economy!

Not only does the money we earn now buy much less than it did 20 or 30 years ago, but a good part of the next generation of movers-and-shakers begins their adult lives tens or even hundreds of thousands of dollars in debt.

And to everyone of previous generations who would say, “Well, you chose to go to an expensive college,” I would have two responses. One, tell me you don’t regret any decisions you made  between the ages of 16 and 18. Hindsight is 20/20 and all that. And, two, I was screwed over in the exact same way he describes in the article.

I went to college with people whose parents could afford it outright. I went to college with people whose parents made so little that they managed to graduate with nothing more than a government-subsidized Stafford loan, thanks to generous financial aid. But those in the middle like me? My school told my parents that they should be able to contribute 20% of their income to my tuition costs.

………..?

That 20% is 2/3 of the recommended maximum for spending on housing, the biggest and most important expense anyone could have. Full disclosure: no, they couldn’t contribute that much. Hello, private loans! The experience was common enough that, at 18, I figured that’s how it was and that there were no other options. My husband, whom I met in college, and I started out our married life at the fresh age of 22 with a combined student loan payment of about $1000 per month.

Take a moment to let that sink in.

We have, since college, done everything right financially (more or less). We have no credit cards. We have two kids, three years apart. We can’t consider having more because we can’t afford it. We waited until 2010, the low point in the housing market, to buy a house. We bought a small rural house outside of the city where my husband works (much cheaper house prices), next to a commuter train stop, and are able to be a one-car family as a result. I stay home with the kids, and the work I do at home (childcare, cleaning, yard work, gardening, cooking, extensive budget planning, etc…all documented in my past blog adventures) more than makes up for whatever income I could be making in our area. We streamline every cost that we can by doing as much ourselves as we can.

But, gaaaaaaaah, those student loans! Unexpected housing and car maintanence costs! Holy crap, kids are expensive! Midwife costs inexplicably not covered by our very expensive health insurance! Health insurance!

The list goes on. This list is not composed of things for which most people could say, “Well, you just made a series of bad choices.” Our list represents normal, even prudent, choices.

But the struggle is real.

We are still living paycheck to paycheck. We get down to our last $20 three or four times a year. Every time we thought we could start saving, a new large monthly expense would pop up. Like our last lemon car unexpectedly dying right about when we would have paid it off, had we not worked extra hard to pay it off a little early. Like our (original-with-the-1987-house) central A/C unit dying 3 or 4 years after we bought the house. Like our very expensive health insurer (did I mention how expensive they are?) disagreeing I should have the right to choose where and with what care I give birth and consequently refusing to cover the (1/4 the usual cost of birth!) home birth midwives. Like getting sick way more often than we used to (especially me) because a 12 hour workday (thanks to the husband’s lengthy commute) is sucktastic.

We just paid our current car off, and now I’m apprehensively wondering what the next unexpected cost is going to be.

We have scrupulously worked on our student loans, paying off one at a time with annual employment bonuses until the payments are down to $400 per month. Down. To. $400. We have another 6 years to go on them. When we pay them off, we’ll be about twice the age we were when we incurred them. And that’s early for a lot of people in my generation!

I find it ridiculous that this is considered normal now.

You know, when we bought The Curious Pup, we spent what was, to us, a great deal of money on him (thank you, annual bonus). We researched and found a good, local, small-time Papillion breeder, whose puppies came complete with genetic scans that showed they would be very unlikely to develop certain costly genetic ailments in later life. He arrived in our lives as healthy as a puppy could be. We specifically got a small breed because it would mean being able to afford the expensive food that would help him to remain healthy lifelong.

We named him after a character from the depressingly hilarious book Catch-22. The catch in the book, if you don’t know, was that you could get out of flying the dangerous missions in the war only if you were insane. If you were insane, you had but to ask to be removed from the duty roster. But asking to be removed from the roster for flying dangerous missions was a clear sign of sanity. End result? Avoiding the missions was impossible. Catch-22.

We named Curious Pup (not his real name) after a character in the book as a reminder of life’s great catch.

In order to save money, you have to have money.

The cheapest any expensive thing will ever be is when you front load the cost. In the short term, things bought with credit are ultimately more expensive by virtue of the interest added on. In the long term, they are made more expensive by virtue of the artificially high demand that becomes possible.

We are all feeling the effect of the latter condition, whether we have debt or not. But millenials, my generation, inherited, rather than created, this economy.

And however much we are dismissed by mainstream politics and media as being young and stupid (the internet generation can’t do their own research, srsly?), we are thinking more than anyone else about the quality of life we’ll be passing on to our own, (at this point) very young children.

Huzzah for the American dream.

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