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Pay off debt and live your life. Don't compare, contrast.

The Yakezie Challenge Starts Na-Now!

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I am joining the Yakezie challenge.  This is a special “internets” challenge for people who blog about finance and what-not, and it’s a commitment to stay the course for the next 6 months and try to improve the traffic to your blog.  I stopped watching the traffic to my blog because it was pretty depressing and got back to the business of writing about what interested me.  But I still want to do this challenge and see where I end up in 6 months, which will also be the One Year Anniversary of this blog.  Plus I get to put a badge on my website.

So here are my stats as I enter the Yakezie Challenge:

Start Date: December 5, 2011

End Date: June 5, 2012

Currrent Alexa Ranking: 1,724,790

Target Alexa Ranking: Within the top 200,000

That’s all I know for now.  Just like I entered blogging blindly, I’m entering this challenge blindly and haphazardly.  And I’m pumped!

My debt is my own fault.

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I haven’t been able to write anything lately because I’ve been really busy watching four seasons of Breaking Bad and not studying for this exam for work which I really should be doing and maybe doing a little bit of self-back-patting because I really feel like I’ve made a dent in my debt AND I haven’t felt totally crazed and in an urge to spend a chunk of money to make up for this stretch of non-spending.

Having a blog is confusing.  I want to write and inform the world but I don’t want to misinform.  I’ve been following and supporting the Occupy movements and I believe in the power of the 99 percent finally speaking up for itself on its own terms, and I think that is the most exciting thing that has happened in America in a long time.  I don’t agree with 20smoney when he says that the Occupiers are uneducated about the issues and aren’t saying anything of substance.  This is a large group with a variety of views, but they are trying to do something different (inclusive, not centered around a single leader or single demand) and that is what counts.  But you wont see me posting on the http://wearethe99percent.tumblr.com/ page any time soon, and here’s why.

I Got Myself Here (with My Dark Passenger Known as Immaturity)

Yes, Dexter, we all have Dark Passengers. Mine just guides me to impulsive decisions and reckless spending.

My debt situation is my own fault.  I am the 99 percent but I am not in this situation because somebody stuck it to me, or some corporation pulled the rug out from under me, or I got hit with million-dollar medical bills due to evil health insurers.  I had a nearly full-ride scholarship for my undergraduate career and paid off my $6,000 in student loans just 9 months after graduating from college.  My parents helped me out until I graduated college and even up until last year were paying for my car insurance.  I have been lucky enough to always have work when I wanted to work.  Sometimes, through a fault of my own thinking, I have worked for way less than I should have.  But that was my own choice.  I have friends who make similar salaries to me and yet they are not in debt.  Why is that?  My best friend is a teacher and she has worked from age 17.  She has personal savings in the SIX FIGURES.  God damn!  How did she do it?  I asked her to explain herself.

She said that one reason that she was able to save so much is that she “has never paid a cent of interest” to anyone, for anything.  On the other hand, I’m paying all kinds of fees and interest.  Interest on my credit cards, auto loans, and personal loans.  A $10 fee each month because I pay my auto insurance monthly instead of every 6 months.  Those things add up.

She has also always spent way less on clothing.  Brand name jeans that cost $150 which looked super-cool to me, only seemed ridiculous to her.  I think women’s spending habits on clothing/accessories is a HUGE factor in predicting how well they save.  I am not so sure if it’s true with guys, but I have noticed that all of the women I know who don’t spend a lot of time shopping and rarely buy designer brands are generally not in debt and have been able to save for other things.  I wasn’t there before, but I am now.

You like these overpriced jeans? No! Bad girl!

Be Less Impulsive

My best friend (who’s reading this and will probably call me and tell me to not use her as blogging fodder) is also less impulsive.  I have noticed that she takes a lot more time to make decisions and she doesn’t shop impulsively.  Sometimes I try to push her but she makes decisions in her own time and they have worked out for her.  I was always impulsive in my actions, whether it was buying things or making decisions about my life.  I had a very strange mentality of making decisions and then charging forward with them no matter what (which we’ll analyze in my next post reviewing Sway: The Irresistible Pull of Irrational Behavior).  But impulsiveness is a sign of immaturity.  Becoming less impulsive and being more thoughtful and deliberate means you are becoming mature.  That’s bittersweet for me.  I love being impulsive, immature and never worrying too much.  Reckless is hilarious and makes for interesting stories.  But if I continued that way it would be very hard to achieve my dreams and make big things happen.

So maturity is good.  It doesn’t mean your life is suddenly devoid of color and all things fun, it just means you don’t act on every single impulse.  For me, it’s about taking responsibility for having never considered the price, pretending like I could afford everything I wanted and deserved to spend money.  It would have been nice if my parents had instilled frugality in me, but it’s not the end of the world.  I would rather they taught me everything that they did teach me, which instilled in me a natural curiosity, a love of all people, a true desire to give and be a part of a community, and a healthy sense of humor that makes me who I am.  I guess for all those good things I can forgive them their lack of sensibility when it comes to saving for retirement.

Book Review: Green with Envy by Shira Boss

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I am doing more regular book reviews at American Debt Project, and Green With Envy: Why Keeping Up with the Joneses is Keeping Us in Debt was right on topic.  I read constantly, but never many topical books.  You know those books with paragraph-long titles?  Like Rule and Ruin: The Downfall of Moderation and the Destruction of the Republican Party, From Eisenhower to the Tea Party or Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History?  Hello, too many words, I almost blacked out. (But Griftopia sounds interesting.)

Besides their rambling titles, topical books often seem short-sighted to me.  I prefer to read the classics in non-fiction that dissect important events in history, like All the Shah’s Men: An American Coup and the Roots of Middle East Terror (OK, so that has an extended title too, but I highly recommend it).  Books that are written about things that are happening right now are usually topics better analyzed in newspapers and magazines.  But I picked up Green with Envy because it caught my eye from the first sentence: “It started even before the couple next door moved in.  The comparison.  The envy.”

Green with Envy is not full of advice nor is it an in-depth analysis of our society and its relationship with money.  It is about our relationship with money, but on a personal, individual level.  Beginning with herself, Boss examines the personal stories of different types of people in varying financial situations.  I was impressed by her level of honesty about openly envying her neighbor’s Bloomingdale’s packages that arrived on a daily basis.  Her neighbors of the same age seem to have it way better than Boss and her husband, who are deep in student loan debt and living on one income.  But she soon gets the real story as she begins writing this book, and her new neighbors very openly discuss the details of their not-so-perfect finances.  From there, she details the story of another couple in Florida who seemed to moving up and up until they were in over their heads.  This particular couple ended up in bankruptcy court but there was no happy ending where they reined in their spending and happily lived on less: Boss eloquently captures how they continued to envy their more comfortable friends and neighbors.

A surprising section of the book was dedicated to analyzing the personal finances of the Representatives of U.S. Congress.  When the book was published, the salary of a Representative was $160,000 per year (it’s now at $174,000).  While many Representatives and Senators are independently wealthy and could work without a salary (check this out for the wealthiest members of Congress), there are members who have only their salary.  At first, this section seems ridiculous.  Who cares if Congress doesn’t receive any housing allowance for their residence in Washington or travel stipends for their family to visit them at the Capitol?  These fat cats have it made and they’ll have it even more made when they take their lobbyist gig after congress paying $500,000 a year!  But as the stories of Congressmen with high credit card balances continued, it became clear that this wasn’t about pity or empathy for the poor little old Congressmen who have to make it on less than $200K per year.  It was about revealing that there is always a set of Joneses to compare yourself to, and there will always be those who are doing better and doing more.  The comparisons will never stop and they are challenging for those in the public eye who have to maintain an image of order and perfection at any cost.

Green with Envy also devotes a section to Baby Boomers, who have been the most prosperous generation of recent history, although that doesn’t mean many of their finances are not in disarray either.  This generation, like many of us, hasn’t planned for retirement or planned for a time when they would be earning less.

The last chapter of the book, which does delve into a few ideas and pieces of advice, begins with Boss and her husband training for a marathon.  The training became more about mental training than just physical training, and some of the mental training techniques used by marathon trainers could easily be applied to other great challenges in life.  Consider:

The marathon folks teach the technique of using the phrase “but it doesn’t matter” after every negative thought or disappointment.  As the authors suggest, I tried out this technique in other parts of life, at first for little things like when the line at the grocery store was taking forever (But it doesn’t matter!), and then for more seemingly significant things, like the neighbors jetting to Tahoe for the weekend (But it definitely doesn’t matter!).  In this way, you start training and shaping your mindset so that you can start making life what you want it to be.

I tried it out already in my own life and loved it (not that I’m going to be running any marathons any time soon- those people are crazy! Maybe a half-marathon).

Green with Envy is a great read on our perceptions of our own money and other people’s money.  It considers not only how we view money but how we view work, whether we would work if we didn’t need the money and how people who do have millions are not necessarily fulfilled (especially if it is inherited and not earned).  I really enjoyed how the author took uncomfortable revelations to a new level, and she never excluded her own situations from being put on display.  I thought this last quote from the book fit the idea of American Debt Project about understanding and talking about our finances:

In stepping forward to make changes in how you think about your personal financial situation and how we talk to one another about it, in confronting the taboo, keep in mind something the anthropologist Margaret Mead said: “We are our culture.” The taboo lives because we are keeping it alive by following it. When we act boldly, when we make our own decisions about what we’ll talk about and how we’ll view things, we improve our own culture.

Bold, baby.  She is Shira, hear her roar.

(Note: Shira Boss wrote this book in 2006 and the paperback version that came out in 2007 is entitled Green with Envy: A Whole New Way to Look at Financial (Un)Happiness.  I believe the content remained the same and my review is of the 2006 first edition.)

Quotes of the Day: On Persistence and Innovation

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Two great quotes from the November WSJ Magazine.

The Idea of persistence...persists.

 

And from the artist Tom Sachs:

from Tom Sachs interview in WSJ Magazine

 

Like I was saying, we’re not here to count money.  We’re here to get out of debt and keep doing the exciting stuff that makes life interesting.

Buying Things Will Not Make You Happy

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Buying things will not make you happy. But when I walk into the kitchen, I think about how nice a good set of knives would be.  Real chef knives, dangerously sharp.  Or maybe the ceramic knives that Ming Tsai uses.  And it won’t make me happy but I want a new refrigerator.  One that’s stainless steel with a French door and Energy Star compliant.  And I’d like to find a cool painting to hang on the only wall in the kitchen to bring some color into the space.  What about a non-slip rug by the sink?  To make it feel homey.  But none of those things will make me happy.  I just find myself wanting them.

This was me riding back from the store the other day when I realized maybe I don't need so much stuff.

Having more stuff will not make you happy.  But I want to create a space for us in our tiny, rented apartment in Los Angeles.  I want it to be beautiful because our life is beautiful.  Everything we share is beautiful and in my mind our home doesn’t reflect that.  It doesn’t say what I want it to say.  It doesn’t say we live a life I love, we make meals together and for our friends, we follow each other around the house talking about our day while we do other little things at the same time.  But putting pretty stuff in this place that isn’t mine and feels temporary won’t say all that.

There is one material thing that I want.  And that is my own home.  I’ve wanted it for as long as I can remember.  Little girls are supposedly always imagining their weddings and how amazing it would be.  I was always dreaming of a gourmet island kitchen with French Country antique white cabinetry, dark granite countertops and wide-plank walnut floors.  A little bit of land to plant fruit trees and grow vegetables.  A study with floor-to-ceiling bookshelves to give a home to all of the books I have stored in my parents’ garage.  An open floor plan.  A master bath.  And lots of sunlight on a quiet street in a beach town.

Kitchen I've Fantasized About #882. I hope I don't have to kill anyone to have a kitchen like this.

So maybe it’s not just one thing.  It’s an idea: of a home to share and love.  I’ve never felt secure financially.  So I’m trying to feel secure, even though security is never guaranteed, even with no debt and a pile of cash.  If you try to get rich, you’ll never have enough.  If you try to keep up with your friends, neighbors, coworkers or even your family, you’ll always overspend.   Relentless advertising and media reinforcement over the years has pretty much ingrained into my mind the idea that having lots of stuff and lots of money to spend is the easy road to happiness. But I’m working towards a goal.  I am paying off my debts slowly but surely and instead of thinking about little things I want to buy, I remind myself of the home that will be possible if I just keep my head down and power through.  The hardest part of paying off debt is that it isn’t fast.  There is no instant gratification like what sleek new kitchen tools could provide or the silent hum of a refrigerator that isn’t 25 years old.  There are results, but they are fragile.  You could go out and buy new stuff and wipe out all your hard work.

But there is momentum.  And momentum builds.  And it affects the rest of your life- your relationships, your work, your side projects.  This thing, this American Debt Project and this grown-up life of mine, is just beginning.  And like every beginning, it is full of possibilities.