Monthly Archives: July 2011
Now, when I say you, I really mean me, so don’t take this as some kind of angry judgement on your (my) terrible spending habits. I’ve made many mistakes and I am just barely figuring it out, so allow me to analyze a few reasons why you’re (I’m) in this boat…
10 Reasons You’re in Debt (And What to Do to Get Out of It)
1. You Spend Like You’re Rich. Wow, have I been there. I almost think my credit cards encouraged violent spending (note to self: trademark the term “violent spending”). I used to be amused at ridiculous bar tabs and buying designer pants. If I was spending less than I earned, then there’s nothing necessarily bad about buying designer pants or eating at every fancy restaurant in the city. But it is a problem if your income doesn’t support that lifestyle. Eventually, you have to put away some of those expensive tastes until you can afford them, which means you can afford them while still saving and investing 10% or more of your income.
2. You Have a Vice that’s Gone Unchecked. Is it gambling, drugs or alcohol, shopping, or maybe something freaky, like a silicone doll collection? Whatever it is, there are obviously some issues you have to deal with, but maybe just as important is the fact that that vice takes up a portion of your income that could be going elsewhere. There’s obvious ones like cigarettes, but there’s also less obvious stuff like buying shoes every week at TJ Maxx because they’re only $12.99 and that shouldn’t even count.
3. You Buy Stuff You Think Will Impress Other People. Case in Point: BMW 3-Series. Enough said.
4. You Think You’re Going To Make It Big With Zero Planning. I know that you’re talented and smart. You are probably working on a few things to move your career along. You should have the same kind of plan with your finances and investments. What would you like to save each month? How much additional debt payments can you make each month? What would you like to invest in in the future? Start researching those things you might be interested in and just learn as much as you can. Talk to people who invest. DON’T follow their advice. Just learn from them and observe their methods. They could be totally wrong, but you will still be learning more about the markets, not to mention people’s irrational trading strategies.
5. You Have Never Made a Monthly Budget. If you’re anything like me, the idea of a budget seems unnecessary at first suggestion. You already know how much you make each month and you know when your bills are due, and if there’s anything left over, you’ll pay your debt or put it in savings. Well, the budget reinforces everything. It shows you exactly where you’re spending your money, and you can compare your spending to your income (Hint: Spending should be < Income). A budget is like a mini New Year’s resolution, you have good intentions and you may or may not stick with it 100%. But since you will keep making a new budget every month, your budget will slowly begin to reflect more of reality and you’ll feel more confident with each month.
6. You Don’t Look at the Price. This can be a killer at the grocery store. Food prices vary from chain to chain (one place has cheap produce, expensive personal care items, the other place has cheap meat and expensive produce, etc). Consider the price of items and hold off on an item if you can when it’s not on sale. If it’s at the mall, look for the price, ask if there’s a sale coming up, or consider reason #7…
7. You Don’t Ask for A Better Deal. This one is so easy and anyone can do it. Negotiating is an art, and not everyone is comfortable with it, but you owe it to yourself to just start trying it, and you might even decide you like it. Here’s the rule: Never accept the first price on anything where the price is not on a price tag (or even if it is on a price tag when the price is over $300). You don’t have to be rude or demanding, it’s just a question: Can you do anything better for me? Is that your lowest price? What’s the Good-looking Chick Discount? (The last one may not work for everyone). If you’re buying something online, you should always do a quick Google search for coupon codes for the store or check RetailMeNot. What about Craigslist? Did you check it? This is the only area of financial matters I’ve always excelled at, so I’ve probably tried everything you can think of.
8. You Think More About How to Spend Money VS. How to Earn It. It actually doesn’t take any special skill to spend money. I KNOW. It’s shocking. Has anyone told Paris Hilton this? The point is that anyone can walk into Louis Vuitton and buy a $5,000 purse. But figuring out a way to (legally) earn money by creating a product, offering a service or some other way of making money takes time and skill to develop. I tend to spend a lot of time thinking about how I would like to spend money (I just need a Canon 60D and new set of living room furniture), but I am slowly letting those go and focusing on things (this blog, investing, etc) that will earn money for me.
9. You Aren’t Prepared for Emergencies. Last year, my boyfriend and I found a charming little guest house for rent in a nice part of LA with all utilities included for $1,000 per month. The landlord was so nice. We met his kids, he invited us over just to hang out and talk while the kids did their homework and tried to join the conversation. He totally didn’t mind that we didn’t need to move in for 2 months. We gave him our $1,000 security deposit and planned to call him as the move-in date got closer. Well, it turned out he also accepted the security deposits of ten other people, who were also planning to move in within a couple of months and the house wasn’t his but a lady’s whom he was housesitting for. He ended up being arrested, serving three months in jail for fraud, and then being deported to Austria without ever paying back the $1,000 judgement the DA had awarded us. So we were out $1,000 and had to find a new place to live in about 10 days. Crazy stuff happens. It’s good to have a cash reserve. Start putting aside just a little bit of money into a separate banking account, even while you’re paying off debt.
10. You Don’t Look at Your Bills/Statements. I get a little depressed thinking about how much I am paying in interest fees each month. But I still look at my statements and keep track of balances and due dates with written reminders. At the end of the day, money isn’t real, it’s just a tool we’ve created as humans to make different moves in this society game. But it’s still more fun to win the game, so staying on top of your bills and statements means you are taking the first step towards winning the game…
Want more lists about bad money habits? Keep reading:
Got any more bad habits? I would love to hear them!
Did you know Robin Williams was in the music video? Keep this song in your repertoire boy!!
“Don’t take assumptions for granted. Begin by taking a skeptical attitude toward anything that is conventional wisdom. Make it justify itself. It usually can’t. Be willing to ask questions about what is taken for granted. Try to think things through for yourself. There is plenty of information. You have got to learn how to judge, evaluate, and compare it with other things. You have to take some things on trust or you can’t survive. But if there is something significant and important, don’t take it on trust.”
(Excerpt from Death of the Liberal Class by Chris Hedges)
Have you heard of Chris Hedges? The dude’s a rebel! A former New York Times reporter with a Master of Divinity designation from Harvard rebel. On a radio interview in July 2011, he talked about how he was “never a careerist” because those reporters who were closest to the most powerful figures in the government, military or whatever would also generally acquiesce to those figures of power. This was never his interest, as he says, and it shows in his work. His stories in the New York Times were never the “big” policy pieces, but more concerned with talking to the soldiers on the ground and their stories from the field rather than decision-makers at CENTCOM. Overall, I found Empire of Illusion to be a dark, probing look into what is taking hold of America and its citizens.
Empire of Illusion: The End of Literacy and the Triumph of Spectacle is Hedges’ second-most recent book, published in 2009. I found much of Hedges’ assessment of American society and culture (or its lack thereof) to be fascinating and disturbing. The book warns in the most dire tone of the imminent end of the American Empire, which can sometimes feel downright uncomfortable for those of us raised on the snarky and cheeky view of politics a la Jon Stewart and Stephen Colbert. Hedges touches on the state of affairs in literacy, love, education, happiness and the country in general, and his overall assessment is that we have been cast down the wrong path by those in power, and that power continues to become more and more concentrated at the detriment of the majority of the people. More simply, Hedges says we’re all getting stupider, the institutions that once served the people are a joke, and pornography is some twisted, freaky business. Below are a few great quotes from each section of the book, which was divided by the different illusions (and delusions) we suffer under.
The Illusion of Literacy: We’ve rewarded reality television, fake wrestling, and the ostentatiously rich.
The cult of self dominates our cultural landscape. This cult has within it the classical traits of psychopaths: superficial charm, grandiosity, and self-importance; a need for constant stimulation, a penchant for lying, deception, and manipulation, and the inability to feel remorse or guilt. This is, of course, the ethic promoted by corporations. It is the ethic of unfettered capitalism.
The Illusion of Love: I want to believe the best of Hedges, but I am not sure why he “had” to attend the Adult Video News (AVN) Awards in Las Vegas to write this section, which is the biggest event of the pornography industry, complete with convention, after-parties and every big name in porn in attendance. His intention is to expose the violence and cruelty that women are exposed to within these films and this section is more graphic than a Bret Easton Ellis novel. You might skip these detailed descriptions of violent, commercialized and soulless sex, but even creepier is the tale of the man who lives with eight silicone dolls:
Dr. Z hides his hobby from most of his friends. He keeps the dolls locked in his bedroom closet. He positions them around the house, including in his bed, when he is alone. He shops for their clothing. He poses them for photo shoots. He carefully applies their makeup. And he talks to them. He began using blow-up dolls when he was married…He kept his habit secret from his wife. He is now divorced. “Hey,” he says, “I wasn’t cheating.”
The Illusion of Wisdom: This section focused on the shift in higher education away from true intellectual inquiry and the fact that even the our elite, private universities are focused on creating systems managers and not people who are going to think critically and challenge the systems in place. Having attended an elite, private university myself, I had to assess my own education in a different light than the warm-and-fuzzy views I’ve given my school since graduation. Business has become the most popular major (also my major) and careers on Wall Street are some of the most sought after positions for new graduates (also true on my campus where the big Wall Street firms came to recruit, wine, and dine the business, economics and accounting majors). Hedges sums up the future imagined by these kinds of graduates as dim:
They have no concept, thanks to the educations they have received, of how to replace a failed system with a new one. They are petty, timid, and uncreative bureaucrats superbly trained to carry out systems management. They see only piecemeal solutions that will satisfy the corporate structure. Their entire focus is numbers, profits, and personal advancement…The human consequences never figure into their balance sheets. The democratic system, they believe, is a secondary product of the free market-which they slavishly serve.”
The Illusion of Happiness: Hedges cites corporate culture and positive psychology as tools that are used to promote social conformity within society, the workplace, and every other institution. I think anyone who has worked for any company with over 50 employees can relate to this section, where an example of a meeting held at FedEx Kinko’s reminded me of Office Space. A “woman from corporate” brings toys, candy and markers to get the employees involved and keeps an upbeat attitude even though the employees are initally reluctant to get involved. In the end, this scene feels uncomfortable because the employees are being “spun” to think they are happy to work for the company.
Positive psychology, like celebrity culture, the relentless drive to consume, and the diversionary appeals of mass entertainment, feeds off the unhappiness that come from isolation and the loss of community.
The Illusion of America: Hedges looks back at America with nostalgia, because, he says, what is still here is not really America anymore. The quote I want to cite here actually comes from economist Jared Diamond, who lists five factors that lead to social decay:
1) a failure to understand and to prevent causes of environmental damage; 2) climate change, 3) depredations by hostile neighbors; 4) the inability of friendly neighbors to continue trade; and 5) finally, how the society itself deals with the problems raised by the first four factors.
In case you were wondering like I was, depredation means an act of attacking or plundering. Although I think that the depredation going on in the United States is mostly carried on by internal forces.
Overall, I thought Empire of Illusion was a great read. I learned about some disturbing trends in each section that Hedges focused on, and the overall message that the people are being distracted and entertained with spectacle and noise while the country and the environment is plundered is definitely a thesis I can agree with. But I’m always weary of books that prophesy apocalypse and offer nothing in return to a reader. Although Hedges ends on a note of hope (“The power of love is greater than the power of death”), he doesn’t offer a path to readers which I think would include education that encourages critical thinking, less apathy overall within the United States, and an inclusive society that offers a larger percentage of people a path to a middle class lifestyle. I guess in the end, I have an unbounded (and maybe unreasonable) optimism that’s hard to dampen, even though I respect Hedges’ way of presenting the story.
Have you read any works by Chris Hedges? What do you guys think?