Whew. I never thought I'd be writing this post sitting here with a baby, but here we are. Little Philip Joseph decided to come early...after a bout of gastrointestinal flu that held up the gravy train just long enough to convince the little guy to give up on me, I guess.
Mary says that can happen sometimes. And 37 1/2 weeks was just long enough for her to feel comfortable with having the birth at home. Last week when I had a touch of early labor, she said we'd have to go to the hospital if it didn't stop. She said I should have bed rest for 2 days, but whaddayaknow? My husband got the stuff next, and it laid him up so bad (along with the kids), that I had to be up and about caring for everyone.
So when I started getting more contractions yesterday I just lay still and told Dean I couldn't get up. He tottered around and did his best taking care of the kids while I lay in bed staring at the clock. This went on from early morning until about 2. Finally, the contractions were intense enough so I had to brace myself on the nightstand and breathe through them (although they weren't coming along as regularly as I expected). I picked up the phone and called Mary.
"I'm going to have to get on the toilet," I explained. "I'm starting to have to moan through these contractions."
"How far apart are they?" she asked.
"It's still irregular," I said. "They'll be ten, seven, four, then ten minutes apart. They'll be weak one time and then really strong the next."
"OK, I'll be there in 30-40 minutes."
Funnily, the contractions were a lot slower if I sat on the toilet. As soon as I realized Mary was coming, I thought of a few things I had to bring out and organize, so I got up and started to move. Then--wham--I would have to brace myself every two minutes as wave over wave started to come over me. I looked around. No birth tub. We hadn't had time to get it yet, what with everyone being so sick. Where was I going to give birth to this baby? Laying in bed was not a good position, Mary had said. And there was no way I was going to use that medieval birthing stool again!
I prayed. I told Jesus that He would have to do this birth through me, because I really didn't feel up to it. I told Him I had confidence in His will. His timing was perfect. And He had put everything together for this birth to give me exactly what I needed, so I pushed fear aside. This wasn't a one-time thing, mind you. We are all weak, and I was afraid of the pain without the tub. I had to push the fear aside again and again. And as it turned out, that is the key to the whole process.
With every contraction I would feel the fear rise, and then I would push it away, push it down, down, down. Compression of breath. Sensation. I squeezed my rosary in my hand (trying to relax everything else), because the points of the crucifix digging into my palm distracted me from the relentless pressure going on around my cervix.
You do get tired. I think natural birth without a birthing tub is the most tiring thing there is, because you have to squeeze something or brace yourself or hang onto something to feel anchored enough to get through the contractions as they get stronger. With the tub you can float and moan, float and moan. Then you can hang onto the side and stretch out and the water supports you. Without it, gravity mostly works against you. And my midwife was fond of the squat position, because it opens up the pelvis. I was terrified of the squat position--how many times had I had to squat through that 36-hour labor with my first son? Too many times to count.
But I was stuck. No tub. Mary showed up, and my friend Rachel with the needed birth supplies and groceries. Dean perked up, I heard a lot of talking. Mary hauled all her cases upstairs. She dresses for a birth as if she were going to the theatre. She had on a pretty ruched burgundy top and gauchos and high-heeled boots. That was one of the things that had made Mary stand out, of the midwives I interviewed. She was the only one who didn't have a sort of "tired" aspect to her. She seemed to have some juice left. She had pert opinions, a perky haircut, and jazzy clothes. And 25 years of experience.
"Well..." she said with a little laugh. "I guess I'd better check you." Ugh. I hate this part. Even though she checks as little as possible, I always dread it. So I got up on the bed and opened my legs. "Four centimeters," she pronounced. "You're in active labor." Whew. At least this whole party wasn't for nothing. "Now there's no need to try and slow things down. You've got a healthy baby there, and you just need to get in your zone, your birth zone."
I wanted to laugh. I imagined birth happening as it might in an Olympic event, with all the athletes scattering before the starting shot in order to repeat their mantras, or visualize their success. I had successes to visualize. But I couldn't foresee how this birth was going to go. Where was I going to have this baby? "You might try squatting through some contractions," suggested Mary. "Your cervix is still posterior. It needs to come forward. I want you to visualize that cervix coming forward and opening up, just like a beautiful flower."
I got some pillows and kneeled beside the tub. By hugging the side of the tub and kneeling with my legs far apart, I got through some contractions. Here I had what I felt had to be a God-given insight. As I was squeezing my rosary and visualizing those huge, blooming roses they have over in Portland, I heard a thought: "The contractions are going to reach a peak...and they won't get any worse. The only thing that will happen is that the baby will move down. Nothing's going to happen to you. Just relax through it and let the baby move down." I squatted and visualized through more contractions. Soon, it seemed, a tingling sensation was gripping the side of my legs with each contraction and I could feel a slight burning sensation inside me, my cervix probably. I told Mary about it. "Good, good!" she cheered. "That's what we want to hear."
By then, all the midwives had shown up. Mary's assistant was her daughter, Emily, who had three children of her own. There was also a Japanese midwife, who had been hoping to observe a waterbirth. I was dimly aware of a constant flow of conversation in the background. "Oh, I never leave a multip who's at four centimeters. This one time..." "Do you think we should try and call her?" "I hope she gets here in time..." "Is this how they do it in Japan?" The house seemed full of people, but I was deaf to everything but my own struggle to stay on top of these contractions.
"I want you to try and not breathe so deeply," said Mary at one point. "You're hyperventilating." It was true. I was lightheaded, and felt tired. The last thing I needed was to pass out while trying to have this baby. There was a quick search around the house for a paper bag. I breathed into the bag between contractions, but still gulped air during the contraction. "Try to have more normal breaths during the contraction," Mary said. "I don't know..." I said, confusedly. "I don't know any other way to do this." I had always gotten through by gulping air and moaning for all I was worth. The compression of breath does wonders for pain.
But I was resolved to obey everything Mary said. It was like it was a condition. A deal between me and Jesus. I had been having a real struggle with obedience lately, even if I felt I had my reasons. But this was the deal, I felt. I would trust her and do everything she said. If she told me to breathe normally during the contractions, then there must be a way to do it. So I tried it. The contraction intensified, reached up as if it were going to engulf me, then I drew the breath out in a weird, moaning laugh: "huh-huh-huh-huh-huh-huh-huh" After a bit, it worked. I broke out in a sweat, but felt more alert.
But I was also feeling more intense pressure. I had to find a new position. My arms were getting tired--and without the tub I knew I was wasting energy just by holding myself up. I needed to focus on getting through the contractions while letting my lower body open up and relax. I asked for a certain mattress we had that folded up into the shape of a chair. The chair was almost worthless as something to sit on--but I draped myself over it and hugged the back, and it gave support to my belly and legs. By now the contractions were at their peak intensity. The tingling in my legs and hips was wild--my cervix, a ring of fire. But that mantra kept occupying my head: "It's not going to get any worse...let the baby move down." I could actually feel the baby's head doming and stretching and moving through the cervix.
Suddenly there was a knock at the door, and more voices. Mary came back up. "I need to check you again," she said. "The birth tub is here and it'll take 20 minutes to set up. We need to know where you are." I had no concept of time. Had I been doing this for 30 minutes? Or 3 hours? "Don't check me," I gasped. No fingers. No more pressure. Don't ask me to change position. "We have to know if we have time to set up the birth tub," she said. Her next few words faded out as I felt a sudden shift within me and an uncontrollable urge to push. "Too late," I gulped. "I'm pushing!" "OK then," she said. "Too late!" I heard her yell down the stairs. Later I learned that Elisa from Waterbirth International had volunteered to try and drive the tub up to us in time for my birth.
Then there was a whir of activity--pads laid on the floor, pans and cloths brought out, gloves being pulled on--and Mary said, "Where do you want to have this baby?" I looked around frantically. "You could go on your hands and knees," Mary suggested. I looked, dubiously, the next contraction imminent. No way I could hold myself up. "You could squat at the end of the bed," she said next. The bed. We had acquired a stately, humongous cannon-ball type wooden bedstead from my dad, which had a footboard with an enormous turned wooden bar across the end of it. "I could hang onto this," I said tentatively, not sure how. "Why don't you squat in front of it," she said. Ugh. Squatting. But the contraction was coming. Hurriedly I whipped off my bathrobe, squatted down in front of the footboard and hung my arms over that bar. Reaching down, I just felt my fingers lock in some grooves that were carved into the footboard when the contraction hit.
Then we were off to the races! Pushing is nothing like the more passive process of trying to relax and wait out the contraction. It's active, and immediate. You can finally do something. It took me a couple of contractions to remember which muscles to use, however. You only use these muscles when you're giving birth. It's like trying on the ice skates in the back of your closet. "You should stand up and rest between each contraction," came Mary's voice, seeming far away and irrelevant compared to the tsunami building up inside me. But she was right. Dean was there, now. He helped me up. Then down again, plunged into the roar of the waves, my moans rising to screams as I felt the roundness of the baby's head just inside the opening.
The screaming is primal. Its source isn't simply pain--it's partly the unstoppable impulse of nature (asking a woman to stop pushing at this stage is like spitting into a hurricane), partly the panic of realizing there's a baby in your vagina and the physics seem impossible, and partly the fact that all your muscles are rock-hard...and your throat is just along for the ride. "Pushing" is really an abysmal descriptor for what's going on.
Still, I pushed. Each time I pushed with all my strength, because I felt I was at the end of my strength--suspended on that bar between heaven and hell. Finally I felt fingers, Mary's gloved hand reaching in, feeling around for a moment, then pulling. Plish! There went the water sac. My water never seems to break until Mary breaks it right before the head crowns. But it meant we were almost done! Wearily, I stood up. Then down, gathering everything for the last two pushes, the head straining, almost out...will it go? Screams rising into shrieks as the head stretches, stretches, gloved fingers pulling at me one moment, pushing on me with a warm washcloth the next--then out! No time! The next thing, an impossibly large, bony pressure, a huge contraction, more shrieking (was that me?), more fingers pulling, another huge thing popping, then sliding bbblblllllllblldldddddthumpwhoosh...
And then crying! Little gray limbs flushed with pink, a red mouth, wiggling arms and legs. My baby.
"It's Philip Joseph!" someone (my husband) cried.
Immediately, I was calm. "Oh my baby," I said in a husky voice, sinking to the floor. I don't know what Mary did in the few seconds between when he came out and when she handed him to me, made sure he was breathing OK, I suppose--but as soon as he was in my arms, heaven began. [Oh, but there was blood everywhere! Just like with my first birth. Messy messy. With the birth pool, it was so clean, everything just washed off into the water.] I was helped up and into bed, the warm blanket and the tea were brought, my baby snuggled in my arms as I was able to finally lay down and relax my whole body, the terrible pressure gone.
After that, a kind of party atmosphere prevailed. I looked at the clock: ten minutes to six. "How long?" I asked. "From the time I got here and first checked you, it's been 2 hours nine minutes," said Mary. Emily and Akiko bustled about, gathering up the pads, pulling out towels, packing up unused supplies and unneeded equipment (Mary always came equipped with oxygen, Pitocin, IV, stitching-up supplies--"I never use it," she told me once). Pictures were taken, the kids came and went, the placenta came out, food was brought. Dean lay down with me and checked the baby out, but couldn't get too close for fear he was still sick. Then the poor guy went back to babysitting duty. I got to cut the cord this time, and settled Philip down to nurse. He latched on immediately, and everyone left me alone for a while.
***
A little later Mary came back to examine the baby. He was found to be hale and whole, all 19 1/2 inches of him. She checks the spine and the palate, the hips and testes, traces the fontanelles and pushes gently on his tummy. Emily took down notes as Mary dictated them. He was 7 lbs 4 oz, the same weight as his brother Carl was. "Well, he's not a preemie," she pronounced.
***
Later that night, lying next to Philip, I kept re-living the birth again and again. It's such a mind-blowing thing. You wonder how you ever did it. I looked over at the crucifix on the wall, and I thought No, I didn't do it. You did it, just like I asked. Then I realized that for women, the inevitability of childbirth had always been the corollary to the cross. It is how we share in Christ's suffering. And I know we share in his suffering in all kinds of ways (every suffering can be connected and offered with the sufferings of Christ)--but there's something about birth, the nature of it, and the risks women have always taken. For those moments when we are in labor--when we are pushing for our lives, so to speak--we hang between heaven and hell...between death and life. We hang onto our cross, and find ourselves with Christ.
I'm saying all this because I realize natural birth isn't an easy sell. These days when women cry for their epidurals as soon as they hit the hospital bed and the doctor stands by with his scalpel at the ready, why do birth the old-fashioned way? I've talked up the benefits of giving birth in a birthing tub, but can there possibly be any benefit in the trials I've described here? I leave that to your own judgment, dear reader. Granted, there are cost savings. There are certain benefits to health (fewer interventions=less risk of surgery, quicker recovery). But these mean nothing to a woman when the fear and uncertainty surrounding birth looms large in her mind.
Media depictions of birth don't help. Even a "natural" childbirth, when it happens in hospital, seems frightening--a last resort, when there's nothing they could "do." Birth is seen as scary, painful, uncertain, and dangerous. Women fear it. Men try to control it. People take drugs to prevent it. People kill their babies to prevent it.
It's just not true. Birth is difficult, yes. But it is also wonderful, transcendant, triumphant, and empowering by the realization of a few facts.
1. We are designed for this.
2. God is in control.
3. Babies are good.
I've written about this birth in such detail in order to show that it is a process, one that need not be fearful or unduly painful. It can be understood, it can be breathed through, talked through, and thought through. It can be experienced instead of avoided. It is something special about being a woman that, in all the furor over equal rights, has been misjudged and sold short for too long.
"It builds character," pronounced Mary, when I mentioned this blog article to her. "How are you ever going to get through anything difficult in life, any hardships, if all you've known is comfort? And labor pains...they only last one minute. You can do anything for one minute." She described how an epidural-free birth is better for the baby, helps the initial nursing/bonding period along and speeds recovery for the mom. We talked about the hormones that go cascading through the woman's body during labor and birth, amounting to natural pain relief.
I would also add, as a final note (whew!) that great joy only comes with some suffering. We can spend our lives grasping for pleasure and avoiding pain, like the animals...or we can appreciate the facts of our unique nature as human beings and as women. The ability to carry life and to give birth are great gifts...and should be treated as such. In the Catholic Church, women are far from being treated as second-class citizens, as some believe. The Church has always recognized woman's unique role as life-giver and nurturer. Humankind cannot survive without it. This role, moreover, appropriately mirrors the role of the Church. Souls are given new life through baptism, are nurtured and sustained by the sacraments, are "grafted in" to the Body of Christ and given an entirely new life. This is why the Church is often referred to as "the Bride of Christ." What an honor to be able to live this reality in our bodies!
Wednesday, December 19, 2007
Monday, December 10, 2007
"You don't need to fill the creche, honey"
Just a quick note to let anybody know that blogging will be thin for the next month. I mean, if I get an energy spurt and a piece of note paper I might go on a real tear (my next target is the banking industry), but the fact is I've got a sizeable wriggling watermelon in my abdomen that pretty much dictates what I get to do with my day. Basically, when the kids are down, I sit. I sit and knit, or sit and talk on the phone and knit, or sit in front of the Internet (if only I could knit).
My midwife says I need to take walks. I try to stifle my incredulous laughter. Even after walking the short distance to the mailbox, this baby feels like it's about to drop out. The due date--Jan 6--approaches. But it feels too far away.
Preparing for a third baby is a lot different than the first one. Where to put the baby is a principal concern. This child will be lodging in our (pretty big) walk-in closet for a time, until I can get the boys to share a room (Tom doesn't always sleep for his nap, while Carl does). I cleared off the changing table, weeded out some ragged diapers, and rounded up enough plastic pants to last me several months (thank you, Rachel!). The dresser had to be cleared off, the birth kit refurbished. I need to stop by medical supply and pick up a few things. Then the birth tub will be paid for and picked up.
This is going to be a home birth.
While this idea has become comfortable for me, it scares a lot of people. So I don't mean to advocate it unconditionally. My experience with Tom in the hospital has given me a lot of faith in conventional medical care, and were I to need their services, I wouldn't get a spike in my blood pressure about it. However, the road less traveled in birth--at least by most Americans--deserves a look. It offers advantages that some women might prefer:
1. You're in control.
2. You can avoid unnecessary medical intervention.
3. You can avoid unnecessary and inflated expenses.
I don't know how it happened, but there's a subtle conditioning at play that says, you're not safe giving birth anywhere except in a hospital bed with a doctor catching the baby and the OR and neonatal unit located just down the hall. When I was about three months from giving birth to my first, somebody asked me whether I'd ever considered home birth, and I was stunned. "You mean, people still do that?" was my reaction. But then I went home and Googled "home birth" and my education began.
Not only do a substantial number of moms give birth at home, but they enjoy lower mortality rates and much lower Cesarean section rates than the rest of the population. Outside the US, where midwives and birth centers (not hospitals) are the norm, outcomes for moms and babies are even better (we're talking industrialized nations here, not the third world).
Not only do home birth moms enjoy better outcomes, they reap incredible savings. While the average vaginal birth in hospital can cost upwards of $8-$10,000 (and you meet parents of toddlers who are still "paying on the birth") a home birth can be as cheap as free. Not that midwives don't request compensation--fees vary considerably--but our first two births were covered completely by insurance.
How's that again?
The typical medical codes and charges submitted by our midwife were reimbursed as if we had given birth in a hospital--which we hadn't--so our midwife's very reasonable fee was fully covered from what they reimbursed us, and she returned to us all that we had paid her on deposit. It doesn't always work out so well. Now we are on a cheap insurance plan with a high deductible. But here again--thank the Lord for home birth! Because the premiums on our current insurance are super-low, we can afford to pay the midwife out-of-pocket and not pay any more than what the premiums under the old plan would have been.
Of course, you must do your homework if you plan to pursue a home birth. I interviewed four midwives with a two-page questionnaire before I found my midwife, the one that seemed more friend than anything and inspired my confidence. I am not suggesting that any mom take risks with her health or her baby. High-risk pregnancies are why we have hospitals. But I do believe that many risks are exaggerated, and pregnancies which would have turned out just fine if left alone are turned into medically-managed "conditions" that scare the crap out of the parents and cost them thousands. Even if I had a so-called "high risk" pregnancy, I think I would consult an experienced midwife before I sought conventional medical help. I've spoken to midwives who've caught 3,000 kids apiece and believe me, they've seen it all.
But how do you get through a labor without pain management? Hmmm. While I am not the be-all, end-all expert on pain (and I hope never to be!), I can offer a few thoughts from my own experience. After having read Dr. Dick-Read's Childbirth Without Fear and a LaMaze manual, I thought I was prepared for the birth of my first. "I've been through boot camp," I thought. "This'll be no sweat." Whoa, was I wrong. Not only was the labor really long (36 hours by my count--Mary's was somewhat less), but the pushing was very hard and I was exhausted by the time the kid came out, bloody wet mess everywhere--about as medieval as you can get. Sounds terrible, right?
But here's the silver lining. Despite the endurance test and mess of that first birth, I may have avoided a host of medical interventions that could have left me with a Cesarean scar and an admonishment about future births. I would have left the hospital with a baby, for sure, but also with a lot of trauma and trepidation about the birth process (not to mention a huge bill). This experience is all-too-common for first time moms, unfortunately. No wonder they swear they'll stop at two.
The funny thing is that after that birth, I felt empowered. I was thrilled with my baby, amazed at my own accomplishment, and (I confess) a bit proud for having done it "my way" (my midwife thinks I was nuts for not using a birth tub). I recovered quickly and was so thrilled about being a mom that we voluntarily got pregnant again nine months later! I just don't think I would have felt the same way about it had the whole thing gone down in a hospital.
But we were talking about pain...I think contractions are more painful when the mom is tense, or afraid. It's not like breaking an arm. There is sensation, pressure...you breathe through it as long as you can. Then you start moaning. Your brain squirms around in your head trying to make sense of everything, and distractions become incredibly irritating. Then you can't think in words at all. Time sort of stops. It's just you and that massive force building up inside you. You moan louder. A weak, downward pushing seems to help. For me, sitting on the toilet seemed to help. Most women feel pain because they tighten up in fear, in fear that the contractions will just get stronger and stronger until they can't handle them anymore. But Dr. Dick-Read was right: they reach a peak of strength and just kind of stay there awhile. But if you can work with them up to that point, slowly, you can manage them (not having nurses running in and out of the room sticking their hands in your vagina is also nice).
Hot water helps.
The second time we used a birthing tub. This is simply a portable hot tub that was set up in the guest room after the labor started. We were caught a bit off guard by Thomas, since I hadn't had a period and we didn't have a sure way to set the due date. But everything came together quickly and the labor was obviously going to be much shorter. Instead of 36 hours this time, the whole thing was done in about 6.
You float in the warm water, and breathe. The midwife shouts into your tin ear, "The baby is moving down! Everything's normal!" You feel the urge to panic a little bit, then someone suggests you change position, grunt a little more. Surprisingly, it works. You can feel that baby moving down. But the contractions are oh-so-powerful. Something else is taking over your body. You have to give in to it. You have to give yourself over to God. This, I think, is the secret to natural childbirth. You gotta have faith in the process, that it is a process that was created by God, and it's natural and normal. Just a few more pushes and--amazingly, incredibly, with a thubbity-bubbity-whoosh--deliverance. Then I brought the baby--still underwater, and whisper-soft--up into my arms, where he immediately drew his first breath, turned pink, and opened his eyes for the first time. Everyone was laughing and crying and we were singing hymns.
As wonderful as my births were, I have to recommend home birth for the aftermath, as well. Instead of a cold tile hospital room with paper sheets, I was wrapped in a warm blanket fresh from the dryer, tucked into my own bed, and brought a cup of strong, sweet tea while the midwife examined the baby and my husband cut the cord. The baby was placed in my arms, where he was urged to nurse immediately. The placenta came out when it was ready, and I was packed into a diaper, on top of a waterproof pad. After I urinated (this part is important to make sure there's no damage to the bladder or urethra), the midwife left for the night with a promise to be back tomorrow. Then...sleep...oh wonderful sleep, that terrible pressure gone, gazing on the face of my new little one, who was allowed to sleep as well (no force-feeding all night).
So there's my apologetic on home birth. Is it for everybody? Probably not. If a mom (or her husband, for that matter) are simply too nervous, then don't bother with it. It's something you have to look into and decide about for yourselves. And I don't advise a woman to go against her husband's feelings on it. Birth is a really touchy-feely thing and everybody needs to be on the same wavelength in order to support the mom. But it can be a true liberation, if learned about and pursued with a proper perspective--in Dr. Dick-Read's words: "a monument of joy."
My midwife says I need to take walks. I try to stifle my incredulous laughter. Even after walking the short distance to the mailbox, this baby feels like it's about to drop out. The due date--Jan 6--approaches. But it feels too far away.
Preparing for a third baby is a lot different than the first one. Where to put the baby is a principal concern. This child will be lodging in our (pretty big) walk-in closet for a time, until I can get the boys to share a room (Tom doesn't always sleep for his nap, while Carl does). I cleared off the changing table, weeded out some ragged diapers, and rounded up enough plastic pants to last me several months (thank you, Rachel!). The dresser had to be cleared off, the birth kit refurbished. I need to stop by medical supply and pick up a few things. Then the birth tub will be paid for and picked up.
This is going to be a home birth.
While this idea has become comfortable for me, it scares a lot of people. So I don't mean to advocate it unconditionally. My experience with Tom in the hospital has given me a lot of faith in conventional medical care, and were I to need their services, I wouldn't get a spike in my blood pressure about it. However, the road less traveled in birth--at least by most Americans--deserves a look. It offers advantages that some women might prefer:
1. You're in control.
2. You can avoid unnecessary medical intervention.
3. You can avoid unnecessary and inflated expenses.
I don't know how it happened, but there's a subtle conditioning at play that says, you're not safe giving birth anywhere except in a hospital bed with a doctor catching the baby and the OR and neonatal unit located just down the hall. When I was about three months from giving birth to my first, somebody asked me whether I'd ever considered home birth, and I was stunned. "You mean, people still do that?" was my reaction. But then I went home and Googled "home birth" and my education began.
Not only do a substantial number of moms give birth at home, but they enjoy lower mortality rates and much lower Cesarean section rates than the rest of the population. Outside the US, where midwives and birth centers (not hospitals) are the norm, outcomes for moms and babies are even better (we're talking industrialized nations here, not the third world).
Not only do home birth moms enjoy better outcomes, they reap incredible savings. While the average vaginal birth in hospital can cost upwards of $8-$10,000 (and you meet parents of toddlers who are still "paying on the birth") a home birth can be as cheap as free. Not that midwives don't request compensation--fees vary considerably--but our first two births were covered completely by insurance.
How's that again?
The typical medical codes and charges submitted by our midwife were reimbursed as if we had given birth in a hospital--which we hadn't--so our midwife's very reasonable fee was fully covered from what they reimbursed us, and she returned to us all that we had paid her on deposit. It doesn't always work out so well. Now we are on a cheap insurance plan with a high deductible. But here again--thank the Lord for home birth! Because the premiums on our current insurance are super-low, we can afford to pay the midwife out-of-pocket and not pay any more than what the premiums under the old plan would have been.
Of course, you must do your homework if you plan to pursue a home birth. I interviewed four midwives with a two-page questionnaire before I found my midwife, the one that seemed more friend than anything and inspired my confidence. I am not suggesting that any mom take risks with her health or her baby. High-risk pregnancies are why we have hospitals. But I do believe that many risks are exaggerated, and pregnancies which would have turned out just fine if left alone are turned into medically-managed "conditions" that scare the crap out of the parents and cost them thousands. Even if I had a so-called "high risk" pregnancy, I think I would consult an experienced midwife before I sought conventional medical help. I've spoken to midwives who've caught 3,000 kids apiece and believe me, they've seen it all.
But how do you get through a labor without pain management? Hmmm. While I am not the be-all, end-all expert on pain (and I hope never to be!), I can offer a few thoughts from my own experience. After having read Dr. Dick-Read's Childbirth Without Fear and a LaMaze manual, I thought I was prepared for the birth of my first. "I've been through boot camp," I thought. "This'll be no sweat." Whoa, was I wrong. Not only was the labor really long (36 hours by my count--Mary's was somewhat less), but the pushing was very hard and I was exhausted by the time the kid came out, bloody wet mess everywhere--about as medieval as you can get. Sounds terrible, right?
But here's the silver lining. Despite the endurance test and mess of that first birth, I may have avoided a host of medical interventions that could have left me with a Cesarean scar and an admonishment about future births. I would have left the hospital with a baby, for sure, but also with a lot of trauma and trepidation about the birth process (not to mention a huge bill). This experience is all-too-common for first time moms, unfortunately. No wonder they swear they'll stop at two.
The funny thing is that after that birth, I felt empowered. I was thrilled with my baby, amazed at my own accomplishment, and (I confess) a bit proud for having done it "my way" (my midwife thinks I was nuts for not using a birth tub). I recovered quickly and was so thrilled about being a mom that we voluntarily got pregnant again nine months later! I just don't think I would have felt the same way about it had the whole thing gone down in a hospital.
But we were talking about pain...I think contractions are more painful when the mom is tense, or afraid. It's not like breaking an arm. There is sensation, pressure...you breathe through it as long as you can. Then you start moaning. Your brain squirms around in your head trying to make sense of everything, and distractions become incredibly irritating. Then you can't think in words at all. Time sort of stops. It's just you and that massive force building up inside you. You moan louder. A weak, downward pushing seems to help. For me, sitting on the toilet seemed to help. Most women feel pain because they tighten up in fear, in fear that the contractions will just get stronger and stronger until they can't handle them anymore. But Dr. Dick-Read was right: they reach a peak of strength and just kind of stay there awhile. But if you can work with them up to that point, slowly, you can manage them (not having nurses running in and out of the room sticking their hands in your vagina is also nice).
Hot water helps.
The second time we used a birthing tub. This is simply a portable hot tub that was set up in the guest room after the labor started. We were caught a bit off guard by Thomas, since I hadn't had a period and we didn't have a sure way to set the due date. But everything came together quickly and the labor was obviously going to be much shorter. Instead of 36 hours this time, the whole thing was done in about 6.
You float in the warm water, and breathe. The midwife shouts into your tin ear, "The baby is moving down! Everything's normal!" You feel the urge to panic a little bit, then someone suggests you change position, grunt a little more. Surprisingly, it works. You can feel that baby moving down. But the contractions are oh-so-powerful. Something else is taking over your body. You have to give in to it. You have to give yourself over to God. This, I think, is the secret to natural childbirth. You gotta have faith in the process, that it is a process that was created by God, and it's natural and normal. Just a few more pushes and--amazingly, incredibly, with a thubbity-bubbity-whoosh--deliverance. Then I brought the baby--still underwater, and whisper-soft--up into my arms, where he immediately drew his first breath, turned pink, and opened his eyes for the first time. Everyone was laughing and crying and we were singing hymns.
As wonderful as my births were, I have to recommend home birth for the aftermath, as well. Instead of a cold tile hospital room with paper sheets, I was wrapped in a warm blanket fresh from the dryer, tucked into my own bed, and brought a cup of strong, sweet tea while the midwife examined the baby and my husband cut the cord. The baby was placed in my arms, where he was urged to nurse immediately. The placenta came out when it was ready, and I was packed into a diaper, on top of a waterproof pad. After I urinated (this part is important to make sure there's no damage to the bladder or urethra), the midwife left for the night with a promise to be back tomorrow. Then...sleep...oh wonderful sleep, that terrible pressure gone, gazing on the face of my new little one, who was allowed to sleep as well (no force-feeding all night).
So there's my apologetic on home birth. Is it for everybody? Probably not. If a mom (or her husband, for that matter) are simply too nervous, then don't bother with it. It's something you have to look into and decide about for yourselves. And I don't advise a woman to go against her husband's feelings on it. Birth is a really touchy-feely thing and everybody needs to be on the same wavelength in order to support the mom. But it can be a true liberation, if learned about and pursued with a proper perspective--in Dr. Dick-Read's words: "a monument of joy."
Wednesday, November 28, 2007
Mr. Bonner admits he's a Christian...well, almost
As I think I've shared with ya'll, before, I've read most of Bill Bonner's ouevre by now and am convinced the man is a Catholic. However, he's never directly acknowledged the fact, never used the words "Catholic" or "Christian," and never mentioned the name of Jesus, although his indirect references to God and the Catholic faith fly thick and fast in his writing. So I've been keeping an eye on this guy for more direct references--a soulwatch, if you will.
Because I want to believe Bill Bonner's soul is saved.
Maybe it's because he's the same age as my dad. Maybe it's because he's a good writer. Maybe it's because, in his world-weary pose as a cynical, contrarian, "metrosexual" ex-pat living mostly in France, he reminds me of a modern-day Erasmus--in secular drag. And yet...I haven't been able to really believe he was a Catholic who lived his faith...until today:
"The more man gets; the more he wants. If he can communicate via Internet…or via airplane…he'll do both. The Internet Revolution was supposed to reduce the demand for fossil fuel. Finally, man had conquered distance. You no longer needed to commute to the office…or half way around the globe. You could have your meeting, and do your work, without ever leaving home.
But what has happened? Now people work from the home…and the office! And still they travel. They want it all - bigger houses, more stuff, more vacations…and they want to work harder too.
"Work…work…work…consume…consume…consume…
"But something went wrong with this model in America. In the last quarter of the last century, people worked harder than ever. What did it get them? Nothing. Nobody realized it, but they had reached an era of declining marginal utility of work."
This is just a sample from one of his columns--which he churns out daily--and proves why I just love this guy. No dry analysis here...every statistic comes with a story. Every financial crisis has a face. In fact, the 'Daily Reckoning' often veers into personal territory, especially at the end:
"Last night's repast was organized by our friend, the reverend Peter Mullen, rector of St. Michael's Cornhill in The City. Peter is chaplain to the London Stock Exchange and an activist.
...
"We must do what we can to reverse what I call 'secular terrorism,'" he said. "You know, this didn't come from nowhere. A small group of intellectuals - notably Herbert Marcuse - got together. They said they needed to infiltrate our institutions and conduct a program of 'secular terrorism.' Marcuse used that expression. And that's what they did. Now, we have a situation where it is practically illegal, in Britain, for a teacher to tell his class that he is a Christian. And God help you if you dare to suggest that one religion is better than another. Even our own priests and ministers don't really believe in Christianity anymore. Many Church of England priests never even open the prayer book. They're victims of secular terrorism; they no longer believe their own faith. Instead, they believe all religions are equal…and all ideas are equally valid."
This is something I'd expect to read on a self-proclaimed Christian site. You could imagine he was Anglican or even an Evangelical for a moment. But then Bonner adds his own slant:
"We had a hard time concentrating. In front of us sat one of the most exquisite women we had ever seen. 'Yes, there is a God,' we said to ourselves. She had long red hair…and the kind of face you see on goddesses painted by Italian dreamers. She was probably in her 20's…so innocent and so lovely. And when she spoke, the tones came out like dessert.
"But what was she doing there? She was surrounded by middle-aged men, all of them grumping about the government, the intellectuals, the schools, art…finance…and all the other bad habits of our times…while recalling how much better things were 50 years ago. Her presence seemed so improbable, like a wedding cake in a machine shop. But it had a good effect on the old fellows. We sat up a little straighter and tucked in our shirts. Instead of yakking to one another with our typical boorish insouciance, we pulled in our stomachs and began making speeches. Now we had an audience…and a purpose.
"We are not the first to be in this position," began one Old Boy near us. "Since the days of Rome, we Christians have been a persecuted minority…not always…and not everywhere. But often. It's part of what makes us what we are. We have to be willing to accept martyrdom. That's what it's all about."
Aha! Gotcha, Bill! You're not just some cynical old nominal Catholic who glances balefully at the Church through bloodshot eyes while keeping a tight grip on the world, the wine, and your wallet. Neither are you a milk-and-water minister's man, with theology that goes only as deep as your boot soles.
No...this is a flesh-and-blood Catholic worldview that fully acknowledges original sin, man's faculties and frailties, and the beauties and pleasures of this life--while holding it all in an eternal perspective.
For a guy writing in secular finance, this is amazing.
Read the whole thing here.
Because I want to believe Bill Bonner's soul is saved.
Maybe it's because he's the same age as my dad. Maybe it's because he's a good writer. Maybe it's because, in his world-weary pose as a cynical, contrarian, "metrosexual" ex-pat living mostly in France, he reminds me of a modern-day Erasmus--in secular drag. And yet...I haven't been able to really believe he was a Catholic who lived his faith...until today:
"The more man gets; the more he wants. If he can communicate via Internet…or via airplane…he'll do both. The Internet Revolution was supposed to reduce the demand for fossil fuel. Finally, man had conquered distance. You no longer needed to commute to the office…or half way around the globe. You could have your meeting, and do your work, without ever leaving home.
But what has happened? Now people work from the home…and the office! And still they travel. They want it all - bigger houses, more stuff, more vacations…and they want to work harder too.
"Work…work…work…consume…consume…consume…
"But something went wrong with this model in America. In the last quarter of the last century, people worked harder than ever. What did it get them? Nothing. Nobody realized it, but they had reached an era of declining marginal utility of work."
This is just a sample from one of his columns--which he churns out daily--and proves why I just love this guy. No dry analysis here...every statistic comes with a story. Every financial crisis has a face. In fact, the 'Daily Reckoning' often veers into personal territory, especially at the end:
"Last night's repast was organized by our friend, the reverend Peter Mullen, rector of St. Michael's Cornhill in The City. Peter is chaplain to the London Stock Exchange and an activist.
...
"We must do what we can to reverse what I call 'secular terrorism,'" he said. "You know, this didn't come from nowhere. A small group of intellectuals - notably Herbert Marcuse - got together. They said they needed to infiltrate our institutions and conduct a program of 'secular terrorism.' Marcuse used that expression. And that's what they did. Now, we have a situation where it is practically illegal, in Britain, for a teacher to tell his class that he is a Christian. And God help you if you dare to suggest that one religion is better than another. Even our own priests and ministers don't really believe in Christianity anymore. Many Church of England priests never even open the prayer book. They're victims of secular terrorism; they no longer believe their own faith. Instead, they believe all religions are equal…and all ideas are equally valid."
This is something I'd expect to read on a self-proclaimed Christian site. You could imagine he was Anglican or even an Evangelical for a moment. But then Bonner adds his own slant:
"We had a hard time concentrating. In front of us sat one of the most exquisite women we had ever seen. 'Yes, there is a God,' we said to ourselves. She had long red hair…and the kind of face you see on goddesses painted by Italian dreamers. She was probably in her 20's…so innocent and so lovely. And when she spoke, the tones came out like dessert.
"But what was she doing there? She was surrounded by middle-aged men, all of them grumping about the government, the intellectuals, the schools, art…finance…and all the other bad habits of our times…while recalling how much better things were 50 years ago. Her presence seemed so improbable, like a wedding cake in a machine shop. But it had a good effect on the old fellows. We sat up a little straighter and tucked in our shirts. Instead of yakking to one another with our typical boorish insouciance, we pulled in our stomachs and began making speeches. Now we had an audience…and a purpose.
"We are not the first to be in this position," began one Old Boy near us. "Since the days of Rome, we Christians have been a persecuted minority…not always…and not everywhere. But often. It's part of what makes us what we are. We have to be willing to accept martyrdom. That's what it's all about."
Aha! Gotcha, Bill! You're not just some cynical old nominal Catholic who glances balefully at the Church through bloodshot eyes while keeping a tight grip on the world, the wine, and your wallet. Neither are you a milk-and-water minister's man, with theology that goes only as deep as your boot soles.
No...this is a flesh-and-blood Catholic worldview that fully acknowledges original sin, man's faculties and frailties, and the beauties and pleasures of this life--while holding it all in an eternal perspective.
For a guy writing in secular finance, this is amazing.
Read the whole thing here.
Wednesday, November 14, 2007
Wacky Ways to Save Money Part 4: Dump Divin'
Today while washing dishes, I contemplated the fact that if all American families lived like we do, thousands of consumer-oriented industries would go under. There would be no "Cosmic Coffee" houses or "Pizza Planet" restaurants. Niche fashion boutiques would cease to exist, and nail salons would be unheard of. In fact (the mind boggles) even the vast secondhand market that I so depend on would soon dry up without the daily infusion of "old stuff" being moved out to make way for "new stuff."
If that sounds extreme, then check out this factoid: consumer spending accounts for more than 70% of GDP!!
That's right folks. Our economy depends on our secular spendthrift neighbors' continuous use of credit cards! If people just stopped spending money, except on bare necessities, our country would grind to a halt overnight. Mish keeps warning there's a severe consumer-led recession in the offing, but I don't think people realize just how bad it would be if we had one. The GDP figure above tells one side of the story. The facts on debt tell another. The third thing to consider is that more Americans rely on service industries for employment than ever before in our history. As spending slows, more and more consumer-oriented companies will announce lower earnings...their stock will plummet...they will scrap expansion plans and shed workers...which will lead to less spending as the pool of retail, food-related, and other service jobs dries up--and so on and so on.
The only thing to end a recessionary cascade like this is some prop consumers can cling to to shore up spending. In the '90's it was the "wealth effect" of rising stock and house prices, accompanied by credit card debt. After the recession of '01-02, the housing bubble created a refinance boom, and people pulled cash out of their houses, and piled on more credit card debt. Now with the stock market at a wobbly peak and housing in freefall, there is only one prop left--credit cards. With foreclosures and credit card defaults on the rise, it's clear the American consumer is tapped out. If he loses his job as well, the downward spiral has only one place left to go--bankruptcy. And as more and more people seek relief via bankruptcy, there is a bigger push to change the laws and so tie the consumer to his debt forever.
What happens to an economy when the recession is so long and so deep (and the debts are so staggering) that all the government spending in the world, along with the lowest interest rates in the world, don't do any good? Nobody really knows. Japan is still dragging itself out of a deflationary depression that has spanned 15 years and counting. But their people never stopped saving money. They had a trade surplus. Nobody knows what would happen if the US were to slide into a deflationary death spiral. The Daily Reckoning guys have made a stab at it in books like Financial Reckoning Day:Surviving the Soft Depression of the Twenty-First Century, The Demise of the Dollar, and Empire of Debt: The Rise of an Epic Financial Crisis. We find clues in bankrupted "Banana Republic" type countries or the dusty records of ancient Rome. But no country in history has ever carried so much debt for so long.
The sheer madness of it is staggering. If you want to see America digging its own economic grave, just take a drive to the dump. There you will see discarded hoards of consumer junk arriving by the truckload. Now, with my wacky title I am not suggesting you get out of your car and start digging through the dump. Nor will you need to squat on the edge of it, as impoverished people often do here in our own hemisphere (doubtless it's illegal). Neither do I advocate completely shutting yourself off from society and homesteading it (although some people have managed this, and I admire them for it).
I am suggesting three main survival strategies:
1: Stockpile necessities.
2. When shopping, see things for their utility and functionality.
3. Learn to hoard raw materials and supply some of your own needs through self-sufficiency.
As you can see, this will hardly require the cessation of all spending. In fact, if you like shopping, this strategy works best the more you shop. The trick is changing your mentality from a "spending" frame of mind to a "buying" frame of mind. If you are a housewife, you are likely the chief "buyer" for your household. The household needs certain supplies, tools, and raw materials. The household does NOT need Dish Network Satellite systems, extraneous gewgaws and gadgets, or a new set of decor for every season. One has to learn to see through all the marketing and advertising hype and ask oneself a series of questions:
"Do we need this?" "For what?" "For how long?" "Is there some other way to fill this need?" "If not, is the price of this thing reasonable?" "Will it last?" "How much space does it take up and are we willing to store it?" "What kind of maintenance will it require?" "How will we eventually dispose of it?" "Will it have been worth it?"
This mental flow chart will certainly slow spending--it might even slow your intestinal tract for a few days. However, it soon becomes second nature as the rate of accumulation drops and you begin to see the utility in things you already have.
What does it look like in practice? I shop a lot of clearance sales. In fact, my husband is used to hearing me say, "I'm going on a clearance crawl, honey," or disappearing in the middle of a large store because I spotted a fire sale somewhere. I shop secondhand stores. I scan recycling bins if I'm on a walk or a drive on trash day. And garage saling, I'm told, is an art in itself--one I hope to get more into as the kids get older. In our garage is a storage room with old particleboard shelving on which I store everything from canned goods to light bulbs to oddments of tools and hardware I've bought on clearance. Then when I need something, I don't have to make a special trip and pay top dollar...I can just go to my "store."
You can "trash-pick" on the Internet as well. My friend Rachel is a regular on Freecycle. She's always talking about something she posted there or got from there. Some people are incredibly skilled with sewing, or fabricating with raw material like wood or metal and can make lots of things out of scrap. Others are great with tools and can fix anything. I can't say we're like those people, but if you have a skill like that, it's money in your pocket whenever you can supply a need for yourself rather than being at the mercy of current pricing.
One more thing. Like compulsive eating, compulsive spending is a habit you can get into purely because it satisfies some part of you that is emotional in nature. The most intoxicating thing about acquiring new stuff is usually the first rush of newness--opening the packaging, taking out something that is perfectly clean and shows no wear, that works (or is supposed to work) perfectly, that distracts you from your worries and your to-do list for a few hours or days.
Remember that first real clothes shopping trip to the mall when you were a teen, with a friend in tow and a wad of discretionary cash in your hand? Trying on the clothes, pulling out the hangers, carrying those big bags around and pulling off the tags after you got home and performed a little fashion show for anybody who would notice? New stuff distracts us for a moment...we can forget about all the things we have that need cleaning or repair, all the unfinished projects or little niggling worries that have no solution at the moment. We can pretend that we are starting over...just for the moment...and that life will be better this time. Maybe if we just find the next great sale or the perfect bargain we can "make a killing" on something we wanted...something that replaces something else in the past that we didn't get. Or regret. In the end, consumer economics is more psychology than science. The clearer your head, the better you can play the game.
Let's not forget...and perhaps we should have taken this as our starting point, that we are completely naked and impoverished before God. No matter how much "stuff" we have, we'll never take it with us. I speak as somebody who really likes "stuff," and I definitely could cut back (even on my secondhand hauls). I have to constantly remind myself to adopt a spirit of poverty. Even if I could find something that I wanted at an acceptable price, that doesn't mean I should go and get it. I always ask myself, "Could I live without this?" Deep inside the answer always is, "Yes, you can."
UPDATE: After discussing this topic with my best friend (a history/social studies/economics teacher), she asked in frustration, "Why do people spend all this money on ridiculous stuff?" This topic begs the question, which I was then forced to think about. Why do people spend instead of save? There are several reasons:
1. If the Fed keeps interest rates artificially low (say, to stimulate the economy and "save" us from a recession, as they did in '01), then it lowers the cost of borrowing for banks, which then turn around and advertise lots of "great deals" on mortgage rates, home equity loans, credit cards, you name it.
2. At the same time it pushes down the rate of return savers earn on the money they keep in the bank. Aggressive advertising, "low low payments" and sales-of-the-century induce people to part with the cash--because they figure they're never going to see a deal this good again, and they might as well get it if they want it (hey, times are good, right?).
3. The price of the consumer's house keeps going up, which induces him or her to refinance and cash out their equity, or buy a bigger, newer house because mortgage debt appears as an asset, not a liability.
4. However, the same inflation that boosted house prices means that any money saved today will only be eaten away in the future. So why save? People just look at all the credit offers flooding the mailbox and start playing a shell game with their debt, figuring that the easy money will always be there, as long as they can afford the payments.
The result is the highest rate of consumer indebtedness in history. There is no money left to spend. The trouble is, when you borrow money you don't have, you're not borrowing some other money out there that used to belong to someone else. You are borrowing money from some bank who borrowed it from the Fed who created it out of nothing. Trick is, you have to pay it back with real money that you earn with your sweat and your blood.
If all the creditors came calling at once, the shell game would be up for good. This is the reason why so many banks are in trouble. They borrowed money (which did not exist) in order to make risky bets (which did not pay off) and now they are facing margin calls from investors who are expecting to be paid in real money (which there's not enough of). The length and depth and breadth of the "credit crunch" can only be measured in terms of how many banks can keep their "creditors" (the investors) at bay long enough to find the money to pay them enough to keep the game going.
Hint: there's not nearly enough.
But doesn't frugality hurt the economy? As I hope I've demonstrated, it only hurts in an economy that runs on debt. In a well-ordered economic system, there is enough incentive to save and for savers to invest their capital in good businesses, in expansion of production and technical progress--an environment in which competition thrives and prices are driven down through innovation in manufacturing and the delivery of goods and services. This is an economy in which no one need fear to save, to invest, or to spend--provided interest rates are set by free market forces which give accurate information about the value of money to the consumer and producer.
If that sounds extreme, then check out this factoid: consumer spending accounts for more than 70% of GDP!!
That's right folks. Our economy depends on our secular spendthrift neighbors' continuous use of credit cards! If people just stopped spending money, except on bare necessities, our country would grind to a halt overnight. Mish keeps warning there's a severe consumer-led recession in the offing, but I don't think people realize just how bad it would be if we had one. The GDP figure above tells one side of the story. The facts on debt tell another. The third thing to consider is that more Americans rely on service industries for employment than ever before in our history. As spending slows, more and more consumer-oriented companies will announce lower earnings...their stock will plummet...they will scrap expansion plans and shed workers...which will lead to less spending as the pool of retail, food-related, and other service jobs dries up--and so on and so on.
The only thing to end a recessionary cascade like this is some prop consumers can cling to to shore up spending. In the '90's it was the "wealth effect" of rising stock and house prices, accompanied by credit card debt. After the recession of '01-02, the housing bubble created a refinance boom, and people pulled cash out of their houses, and piled on more credit card debt. Now with the stock market at a wobbly peak and housing in freefall, there is only one prop left--credit cards. With foreclosures and credit card defaults on the rise, it's clear the American consumer is tapped out. If he loses his job as well, the downward spiral has only one place left to go--bankruptcy. And as more and more people seek relief via bankruptcy, there is a bigger push to change the laws and so tie the consumer to his debt forever.
What happens to an economy when the recession is so long and so deep (and the debts are so staggering) that all the government spending in the world, along with the lowest interest rates in the world, don't do any good? Nobody really knows. Japan is still dragging itself out of a deflationary depression that has spanned 15 years and counting. But their people never stopped saving money. They had a trade surplus. Nobody knows what would happen if the US were to slide into a deflationary death spiral. The Daily Reckoning guys have made a stab at it in books like Financial Reckoning Day:Surviving the Soft Depression of the Twenty-First Century, The Demise of the Dollar, and Empire of Debt: The Rise of an Epic Financial Crisis. We find clues in bankrupted "Banana Republic" type countries or the dusty records of ancient Rome. But no country in history has ever carried so much debt for so long.
The sheer madness of it is staggering. If you want to see America digging its own economic grave, just take a drive to the dump. There you will see discarded hoards of consumer junk arriving by the truckload. Now, with my wacky title I am not suggesting you get out of your car and start digging through the dump. Nor will you need to squat on the edge of it, as impoverished people often do here in our own hemisphere (doubtless it's illegal). Neither do I advocate completely shutting yourself off from society and homesteading it (although some people have managed this, and I admire them for it).
I am suggesting three main survival strategies:
1: Stockpile necessities.
2. When shopping, see things for their utility and functionality.
3. Learn to hoard raw materials and supply some of your own needs through self-sufficiency.
As you can see, this will hardly require the cessation of all spending. In fact, if you like shopping, this strategy works best the more you shop. The trick is changing your mentality from a "spending" frame of mind to a "buying" frame of mind. If you are a housewife, you are likely the chief "buyer" for your household. The household needs certain supplies, tools, and raw materials. The household does NOT need Dish Network Satellite systems, extraneous gewgaws and gadgets, or a new set of decor for every season. One has to learn to see through all the marketing and advertising hype and ask oneself a series of questions:
"Do we need this?" "For what?" "For how long?" "Is there some other way to fill this need?" "If not, is the price of this thing reasonable?" "Will it last?" "How much space does it take up and are we willing to store it?" "What kind of maintenance will it require?" "How will we eventually dispose of it?" "Will it have been worth it?"
This mental flow chart will certainly slow spending--it might even slow your intestinal tract for a few days. However, it soon becomes second nature as the rate of accumulation drops and you begin to see the utility in things you already have.
What does it look like in practice? I shop a lot of clearance sales. In fact, my husband is used to hearing me say, "I'm going on a clearance crawl, honey," or disappearing in the middle of a large store because I spotted a fire sale somewhere. I shop secondhand stores. I scan recycling bins if I'm on a walk or a drive on trash day. And garage saling, I'm told, is an art in itself--one I hope to get more into as the kids get older. In our garage is a storage room with old particleboard shelving on which I store everything from canned goods to light bulbs to oddments of tools and hardware I've bought on clearance. Then when I need something, I don't have to make a special trip and pay top dollar...I can just go to my "store."
You can "trash-pick" on the Internet as well. My friend Rachel is a regular on Freecycle. She's always talking about something she posted there or got from there. Some people are incredibly skilled with sewing, or fabricating with raw material like wood or metal and can make lots of things out of scrap. Others are great with tools and can fix anything. I can't say we're like those people, but if you have a skill like that, it's money in your pocket whenever you can supply a need for yourself rather than being at the mercy of current pricing.
One more thing. Like compulsive eating, compulsive spending is a habit you can get into purely because it satisfies some part of you that is emotional in nature. The most intoxicating thing about acquiring new stuff is usually the first rush of newness--opening the packaging, taking out something that is perfectly clean and shows no wear, that works (or is supposed to work) perfectly, that distracts you from your worries and your to-do list for a few hours or days.
Remember that first real clothes shopping trip to the mall when you were a teen, with a friend in tow and a wad of discretionary cash in your hand? Trying on the clothes, pulling out the hangers, carrying those big bags around and pulling off the tags after you got home and performed a little fashion show for anybody who would notice? New stuff distracts us for a moment...we can forget about all the things we have that need cleaning or repair, all the unfinished projects or little niggling worries that have no solution at the moment. We can pretend that we are starting over...just for the moment...and that life will be better this time. Maybe if we just find the next great sale or the perfect bargain we can "make a killing" on something we wanted...something that replaces something else in the past that we didn't get. Or regret. In the end, consumer economics is more psychology than science. The clearer your head, the better you can play the game.
Let's not forget...and perhaps we should have taken this as our starting point, that we are completely naked and impoverished before God. No matter how much "stuff" we have, we'll never take it with us. I speak as somebody who really likes "stuff," and I definitely could cut back (even on my secondhand hauls). I have to constantly remind myself to adopt a spirit of poverty. Even if I could find something that I wanted at an acceptable price, that doesn't mean I should go and get it. I always ask myself, "Could I live without this?" Deep inside the answer always is, "Yes, you can."
UPDATE: After discussing this topic with my best friend (a history/social studies/economics teacher), she asked in frustration, "Why do people spend all this money on ridiculous stuff?" This topic begs the question, which I was then forced to think about. Why do people spend instead of save? There are several reasons:
1. If the Fed keeps interest rates artificially low (say, to stimulate the economy and "save" us from a recession, as they did in '01), then it lowers the cost of borrowing for banks, which then turn around and advertise lots of "great deals" on mortgage rates, home equity loans, credit cards, you name it.
2. At the same time it pushes down the rate of return savers earn on the money they keep in the bank. Aggressive advertising, "low low payments" and sales-of-the-century induce people to part with the cash--because they figure they're never going to see a deal this good again, and they might as well get it if they want it (hey, times are good, right?).
3. The price of the consumer's house keeps going up, which induces him or her to refinance and cash out their equity, or buy a bigger, newer house because mortgage debt appears as an asset, not a liability.
4. However, the same inflation that boosted house prices means that any money saved today will only be eaten away in the future. So why save? People just look at all the credit offers flooding the mailbox and start playing a shell game with their debt, figuring that the easy money will always be there, as long as they can afford the payments.
The result is the highest rate of consumer indebtedness in history. There is no money left to spend. The trouble is, when you borrow money you don't have, you're not borrowing some other money out there that used to belong to someone else. You are borrowing money from some bank who borrowed it from the Fed who created it out of nothing. Trick is, you have to pay it back with real money that you earn with your sweat and your blood.
If all the creditors came calling at once, the shell game would be up for good. This is the reason why so many banks are in trouble. They borrowed money (which did not exist) in order to make risky bets (which did not pay off) and now they are facing margin calls from investors who are expecting to be paid in real money (which there's not enough of). The length and depth and breadth of the "credit crunch" can only be measured in terms of how many banks can keep their "creditors" (the investors) at bay long enough to find the money to pay them enough to keep the game going.
Hint: there's not nearly enough.
But doesn't frugality hurt the economy? As I hope I've demonstrated, it only hurts in an economy that runs on debt. In a well-ordered economic system, there is enough incentive to save and for savers to invest their capital in good businesses, in expansion of production and technical progress--an environment in which competition thrives and prices are driven down through innovation in manufacturing and the delivery of goods and services. This is an economy in which no one need fear to save, to invest, or to spend--provided interest rates are set by free market forces which give accurate information about the value of money to the consumer and producer.
Saturday, October 27, 2007
Quickies
Here's a couple of articles on Marketwatch covering similar territory to this series:
Not so wacky ways to raise cash, especially short term: including raiding your Roth, taking loans against your 401(k), sending the kids to work and selling the new car to buy an older one.
A second look at the mutual fund industry: most moms-and-pops don't even bat an eye at the burgeoning scandal in this massive industry that sucks up our life savings year after year.
More on investing, Roth IRA's, 401(k)'s, and mutual funds will come later in my wacky little series...
Not so wacky ways to raise cash, especially short term: including raiding your Roth, taking loans against your 401(k), sending the kids to work and selling the new car to buy an older one.
A second look at the mutual fund industry: most moms-and-pops don't even bat an eye at the burgeoning scandal in this massive industry that sucks up our life savings year after year.
More on investing, Roth IRA's, 401(k)'s, and mutual funds will come later in my wacky little series...
Thursday, October 25, 2007
Dad, Housing Ain't Gonna Bounce Back
Along with religion, politics, and your early sex life--you can add money to the list of "things you can't talk about with your parents." Just when it seemed my dad was about to succumb to the lure of paid work, my stepmom let it slip..."until we can get back into real estate again."
GAHHH!
My father is an incurable entrepreneur. In his mind, he has made and lost a thousand fortunes. He's had scads of business ideas, plans, and schemes. This is not to say that some of them weren't smart, or on the level, or had potential...it's just that entrepreneurship is a risky career, and few people have the chops to pull it out. My dad isn't one of them. He's always a step behind the curve, one of the millions of dreamers who decide to plunk money down on a "sure thing" just when the smart money is running for its life. Despite his stated intention to make a million before he leaves this earth, I suspect I'll bury the old bear penniless.
But I can't say any of this to him.
Even when I see charts like this.
Or read stuff like this:
"The idea that housing doesn't go down turns on its head when you actually calculate in the real-world costs of interest, taxes, insurance, etc. For instance, before those costs are counted, it looks like 16 out of the 17 top real estate markets in the 1990s were in the black. Once you add them in, however, it turns out that not one of the top property markets went up. They were all negative.
"In the 2000s, up to May 2007, you get something similar…three markets that, in unrealistic terms supposedly shot up 18%, 33%, and 36% during that period, are all actually net losers…down 10.5%, 13.4%, and 28.2%. As in negative. The gains were phantom stats from the fantasy world of no-cost property ownership.
"Running through the rest of the list, the other major markets did still make money. But instead of the astounding triple-digit gains property owners love to point to as proof that this bubble was the real deal, you find out that only two of the markets - net of costs - actually crossed the 100%-gain mark (instead of 10 markets). And annualized, only two markets were even a little above 10% gains in property values.
"Not bad, but not a miracle by any stretch.
"Two more of those top markets just barely squeaked past the annualized 8.5% gains in the S&P 500 for the same period. All the rest of the top 17 markets looked at in this article did worse than the S&P. During what was supposed to be the biggest property boom of all time.
"Again, this isn't to say there wasn't a bubble. Just that it truly was an event completely devoid of sanity."
Mish caps it off with:
"The excesses of the current cycle have never been greater in history. The odds are strong that we have seen secular as opposed to cyclical peaks in housing starts and new single family home construction. With that in mind it is highly unlikely we merely return to the trend. If history repeats, and there is every reason it will, we are going to undercut those long term trendlines.
"There will be additional pressures a few years down the road when empty nesters and retired boomers start looking to downsize. Who will be buying those McMansions? Immigration also comes into play. If immigration policies and protectionism get excessively restrictive, that can also lengthen the decline.
"Finally, note that the current boom has lasted well over twice as long as any other. If the bust lasts twice as long as any other, 1012 just might be a rather optimistic target for a bottom."
Sigh...
GAHHH!
My father is an incurable entrepreneur. In his mind, he has made and lost a thousand fortunes. He's had scads of business ideas, plans, and schemes. This is not to say that some of them weren't smart, or on the level, or had potential...it's just that entrepreneurship is a risky career, and few people have the chops to pull it out. My dad isn't one of them. He's always a step behind the curve, one of the millions of dreamers who decide to plunk money down on a "sure thing" just when the smart money is running for its life. Despite his stated intention to make a million before he leaves this earth, I suspect I'll bury the old bear penniless.
But I can't say any of this to him.
Even when I see charts like this.
Or read stuff like this:
"The idea that housing doesn't go down turns on its head when you actually calculate in the real-world costs of interest, taxes, insurance, etc. For instance, before those costs are counted, it looks like 16 out of the 17 top real estate markets in the 1990s were in the black. Once you add them in, however, it turns out that not one of the top property markets went up. They were all negative.
"In the 2000s, up to May 2007, you get something similar…three markets that, in unrealistic terms supposedly shot up 18%, 33%, and 36% during that period, are all actually net losers…down 10.5%, 13.4%, and 28.2%. As in negative. The gains were phantom stats from the fantasy world of no-cost property ownership.
"Running through the rest of the list, the other major markets did still make money. But instead of the astounding triple-digit gains property owners love to point to as proof that this bubble was the real deal, you find out that only two of the markets - net of costs - actually crossed the 100%-gain mark (instead of 10 markets). And annualized, only two markets were even a little above 10% gains in property values.
"Not bad, but not a miracle by any stretch.
"Two more of those top markets just barely squeaked past the annualized 8.5% gains in the S&P 500 for the same period. All the rest of the top 17 markets looked at in this article did worse than the S&P. During what was supposed to be the biggest property boom of all time.
"Again, this isn't to say there wasn't a bubble. Just that it truly was an event completely devoid of sanity."
Mish caps it off with:
"The excesses of the current cycle have never been greater in history. The odds are strong that we have seen secular as opposed to cyclical peaks in housing starts and new single family home construction. With that in mind it is highly unlikely we merely return to the trend. If history repeats, and there is every reason it will, we are going to undercut those long term trendlines.
"There will be additional pressures a few years down the road when empty nesters and retired boomers start looking to downsize. Who will be buying those McMansions? Immigration also comes into play. If immigration policies and protectionism get excessively restrictive, that can also lengthen the decline.
"Finally, note that the current boom has lasted well over twice as long as any other. If the bust lasts twice as long as any other, 1012 just might be a rather optimistic target for a bottom."
Sigh...
Tuesday, October 16, 2007
WW3: Live in a Bus
Ordinarily, nobody in their right mind would willingly go out and buy something that was more than five times his or her yearly income. Especially if they didn't even have enough cash on hand to survive a job loss or other personal crisis. But that is what people have done. Barraged by ads screaming "lowest mortgage rates since the '60's," people have rushed out and bought homes whether they could afford it or not. And they've done it gladly, even though they know they can never hope to pay it back. Instead, they are counting on housing prices to continue to rise...counting on the next "fool" to come along and pay the inflated price. What they didn't count on was that housing prices couldn't rise forever.
The mistaken premise in the whole scheme is that in the modern economy, a house isn't just a house anymore--it's an "investment." And, as our new national mantra seems to be "you've got to spend money to make money," people have figured that buying houses in a rising market is a sure bet. The richer people have been chasing bigger, more beautiful homes because low payments make them seem affordable (and/or buying properties and "flipping" them), while the poorer people have been persuaded that if they don't pull out all the stops to buy a house now, they'll be priced out of the market. What hasn't been looked at is that owning a house carries costs--and those costs only increase along with risk when the hapless homeowner begins to see himself as a fledgling entrepreneur.
This story is one that I've lived, as my father chased one real estate boom after another. He lost his shirt in '91 and had to declare bankruptcy, which forced the course of my life to where it is today. I never forgot--and resolved not to get in over my head when it came to real estate.
This is not to say that there are no benefits to owning a home. Provided you can maintain the home and keep ahead of the loan while building equity, a home is one of the few investments we "little people" can make that stand to dramatically increase our net worth. Homes are assets that typically appreciate in value over time, fattening the bottom line. In the right market, a superb sale can bring a capital gains windfall for the homeowner. In the meantime, private homes offer the maximum in status, satisfaction, privacy, sense of control, and dignity over any other form of housing. Home ownership is also touted for being an excellent tax shelter, whether through the mortgage interest deduction alone, or as a partial business expense deduction. However, there is a right way and a wrong way to approach it.
The costs of home ownership are hardly ever considered when eager buyers begin to scan the local MLS. They include substantial front-end costs: loan fees and points ("closing costs"), the cost of inspection and/or appraisals, a down payment or "earnest money," and private mortgage insurance. While living in the home the owners are responsible for maintenance and repair, property taxes and insurance, improvements to the home, and repair and replacement of major appliances (the furnace, for instance). All of this is on top of the monthly mortgage payment and all utilities for the home--a shock to the former apartment dweller.
Houses cost out the back end as well. An owner seeking to sell must ensure that he will earn enough off the sale of the home to cover the remainder of the mortgage as well as steep realtor fees, "spiffing up" the house for market, and last-minute repairs. And while most homeowners don't usually consider it, selling a house only makes sense if one can get back all the money one has put into the home already, including what it cost to buy the home plus all the major improvements. I think most homeowners would be shocked to realize that, even if they could get all their money back out (including some free and clear capital gain), the inflation accompanying the boom has eroded the value of what remains. In 2001, the buck bought 25% more than it does today. Take that out of your equity, and the over-enthusiasm for home ownership seems misplaced.
But despite the high cost, people still buy houses. Is there any way to win? There is--but the hitch is that it takes long-term planning. If you bought a subprime ARM in 2005, you can forget winning in the short term. Your might just have to walk away. Others might be able to "start over" only after getting out from under their current mortgages. If you're in an apartment, stay tuned and take notes. The fact is that most homeowners do not intend to really "own" the home. Most people plan on selling sooner or later and netting a profit. Hoping against that event, you should take care of your house, but don't just throw money at it. Instead, work at paying off non-mortgage debt as discussed in my first post. This frees up money to pay for needed improvements and/or a 6 month emergency savings fund, depending on which need is more urgent (some people are in such bad loans that getting out is more important than saving money). Once you've set that part in motion, you can plan your next move with precision. Ask yourself these questions:
Can we move to a less expensive region? You'll want to consider overall income/cost of living ratio and the availability of jobs, not just home prices.
Can we live in a smaller and/or older house? May involve safety issues...and neighborhoods can be iffy--research carefully.
Can we live in the house long-term? Moving every few years is an enormous strain financially, physically, and emotionally--even more so if you buy houses everywhere you go.
Can we pay off the property? Early? This is the best way to ensure affordable housing, despite property taxes. You'll also save a fortune in interest if you pre-pay.
Can we live in unconventional housing and/or buy in an unconventional way? Consider auctions, foreclosures, or buying land and building your own house.
Can we be completely debt free before we buy again? The best scenario if you have to carry a mortgage--better yet, save up a substantial down payment, at least 20%.
Once you have the answers to these questions, you can be honest with yourself about what you can and cannot afford. If you can do any or all of the above, you can minimize some costs imposed by home ownership. But why not go for the gold? The bank's gold, that is. They make big money on millions of "owners" faithfully paying principal and interest every month. What they aren't telling us is that the ratio that makes up the payment is heavily skewed toward interest for the first 2/3 of the life of your loan! It's only after you've been paying on the thing for 20 years that you finally begin to pay more in principal than interest--if you follow the bank's payment schedule. That's why pre-paying is such a boon. Your first year of principal payments probably amounts to a little over one month's mortgage payment. Pay 12 extra principal payments a year, and you've cut the bank out of a year's worth of interest. But that isn't all you can do. You should have as your goal the elimination of the mortgage payment itself.
Why? It's wasted money, for the most part. If you don't have the cash on hand to buy a house outright, you are stuck paying interest to some bank for a number of years, no matter how aggressively you prepay. Add in all the other attendant costs of owning a home, and it's owning, not renting, that seems to be "throwing away money." Better to rent an apartment or house, take advantage of not being responsible for the whole kit and caboodle, and pile up your cash. Here is where my zany title comes in. Some people take this idea so far as to live in VERY unconventional housing. I've heard of people living "off the grid" on forest land (yes, even a family that lives in a bus). My favorite knitting writer, Elizabeth Zimmermann, lived with her husband in a one-room schoolhouse in Wisconsin. An old boyfriend of mine was enamored of yurts, and I even read a news story once about a young single guy who was homeless on purpose (he pitched a tent every night and took showers at a gym).
When I think of my own family, I consider the fact that we've always been trailer people. It wasn't until the post-WWII period that we experienced any kind of prosperity, and even that is draining away. My uncle lives in a trailer. My dad and stepmom lived in an RV for over two years. But there's no shame in living in a trailer park if you have no debt and can meet your obligations every month while building up your savings. It only seems unpleasant because we've been caught up in the illusion of a higher standard of living--financed by debt.
If we are lucky enough to sell our current house and get out from under this mortgage, my goal is to never carry a mortgage again. Think about it. In the pie chart of where all your money goes, after taxes the mortgage is the biggest single expense in a homeowner's budget. Put another way, you could survive on a lot lower income if you didn't have to pay mortgage or rent. Hence, the basic home ownership survival plan is: rent a house or apartment as cheaply as you can. Practice your savings strategy and/or sit on your investments until you can afford to buy "something" in cash, even if it isn't the ideal house. The point is, it's paid for. As long as you have clear title, it's liveable, and not a money pit, you can always live in it, improve it, borrow against it, and eventually sell it when the market gets better. Then you go out and look for a better one. If you're sick of moving or are already an apartment dweller, consider buying a plot of land, and building your home in stages that you control and that you can afford. Lately I've settled on what is a soon-to-be glutted foreclosure market for our next real estate purchase.
This plan may not appeal to everyone. The big, expensive, brand-new home on the billboard will always sing a siren song to American hearts. But it is the safest way. If you've eliminated your mortgage payment, you've increased your income by 1/3. If the house gets you down at times, you can afford a trip to Rome. But jumping from one house to another, or worse, refinancing the same house over and over, is madness. You're throwing away money on interest and bank fees while decreasing your equity with every move. You may as well light your money on fire.
To sum up, you have to look at the total picture and take control. Just because "everyone else" is buying a house doesn't mean you should. Instead of "buying a house," plan on owning a house.
The mistaken premise in the whole scheme is that in the modern economy, a house isn't just a house anymore--it's an "investment." And, as our new national mantra seems to be "you've got to spend money to make money," people have figured that buying houses in a rising market is a sure bet. The richer people have been chasing bigger, more beautiful homes because low payments make them seem affordable (and/or buying properties and "flipping" them), while the poorer people have been persuaded that if they don't pull out all the stops to buy a house now, they'll be priced out of the market. What hasn't been looked at is that owning a house carries costs--and those costs only increase along with risk when the hapless homeowner begins to see himself as a fledgling entrepreneur.
This story is one that I've lived, as my father chased one real estate boom after another. He lost his shirt in '91 and had to declare bankruptcy, which forced the course of my life to where it is today. I never forgot--and resolved not to get in over my head when it came to real estate.
This is not to say that there are no benefits to owning a home. Provided you can maintain the home and keep ahead of the loan while building equity, a home is one of the few investments we "little people" can make that stand to dramatically increase our net worth. Homes are assets that typically appreciate in value over time, fattening the bottom line. In the right market, a superb sale can bring a capital gains windfall for the homeowner. In the meantime, private homes offer the maximum in status, satisfaction, privacy, sense of control, and dignity over any other form of housing. Home ownership is also touted for being an excellent tax shelter, whether through the mortgage interest deduction alone, or as a partial business expense deduction. However, there is a right way and a wrong way to approach it.
The costs of home ownership are hardly ever considered when eager buyers begin to scan the local MLS. They include substantial front-end costs: loan fees and points ("closing costs"), the cost of inspection and/or appraisals, a down payment or "earnest money," and private mortgage insurance. While living in the home the owners are responsible for maintenance and repair, property taxes and insurance, improvements to the home, and repair and replacement of major appliances (the furnace, for instance). All of this is on top of the monthly mortgage payment and all utilities for the home--a shock to the former apartment dweller.
Houses cost out the back end as well. An owner seeking to sell must ensure that he will earn enough off the sale of the home to cover the remainder of the mortgage as well as steep realtor fees, "spiffing up" the house for market, and last-minute repairs. And while most homeowners don't usually consider it, selling a house only makes sense if one can get back all the money one has put into the home already, including what it cost to buy the home plus all the major improvements. I think most homeowners would be shocked to realize that, even if they could get all their money back out (including some free and clear capital gain), the inflation accompanying the boom has eroded the value of what remains. In 2001, the buck bought 25% more than it does today. Take that out of your equity, and the over-enthusiasm for home ownership seems misplaced.
But despite the high cost, people still buy houses. Is there any way to win? There is--but the hitch is that it takes long-term planning. If you bought a subprime ARM in 2005, you can forget winning in the short term. Your might just have to walk away. Others might be able to "start over" only after getting out from under their current mortgages. If you're in an apartment, stay tuned and take notes. The fact is that most homeowners do not intend to really "own" the home. Most people plan on selling sooner or later and netting a profit. Hoping against that event, you should take care of your house, but don't just throw money at it. Instead, work at paying off non-mortgage debt as discussed in my first post. This frees up money to pay for needed improvements and/or a 6 month emergency savings fund, depending on which need is more urgent (some people are in such bad loans that getting out is more important than saving money). Once you've set that part in motion, you can plan your next move with precision. Ask yourself these questions:
Can we move to a less expensive region? You'll want to consider overall income/cost of living ratio and the availability of jobs, not just home prices.
Can we live in a smaller and/or older house? May involve safety issues...and neighborhoods can be iffy--research carefully.
Can we live in the house long-term? Moving every few years is an enormous strain financially, physically, and emotionally--even more so if you buy houses everywhere you go.
Can we pay off the property? Early? This is the best way to ensure affordable housing, despite property taxes. You'll also save a fortune in interest if you pre-pay.
Can we live in unconventional housing and/or buy in an unconventional way? Consider auctions, foreclosures, or buying land and building your own house.
Can we be completely debt free before we buy again? The best scenario if you have to carry a mortgage--better yet, save up a substantial down payment, at least 20%.
Once you have the answers to these questions, you can be honest with yourself about what you can and cannot afford. If you can do any or all of the above, you can minimize some costs imposed by home ownership. But why not go for the gold? The bank's gold, that is. They make big money on millions of "owners" faithfully paying principal and interest every month. What they aren't telling us is that the ratio that makes up the payment is heavily skewed toward interest for the first 2/3 of the life of your loan! It's only after you've been paying on the thing for 20 years that you finally begin to pay more in principal than interest--if you follow the bank's payment schedule. That's why pre-paying is such a boon. Your first year of principal payments probably amounts to a little over one month's mortgage payment. Pay 12 extra principal payments a year, and you've cut the bank out of a year's worth of interest. But that isn't all you can do. You should have as your goal the elimination of the mortgage payment itself.
Why? It's wasted money, for the most part. If you don't have the cash on hand to buy a house outright, you are stuck paying interest to some bank for a number of years, no matter how aggressively you prepay. Add in all the other attendant costs of owning a home, and it's owning, not renting, that seems to be "throwing away money." Better to rent an apartment or house, take advantage of not being responsible for the whole kit and caboodle, and pile up your cash. Here is where my zany title comes in. Some people take this idea so far as to live in VERY unconventional housing. I've heard of people living "off the grid" on forest land (yes, even a family that lives in a bus). My favorite knitting writer, Elizabeth Zimmermann, lived with her husband in a one-room schoolhouse in Wisconsin. An old boyfriend of mine was enamored of yurts, and I even read a news story once about a young single guy who was homeless on purpose (he pitched a tent every night and took showers at a gym).
When I think of my own family, I consider the fact that we've always been trailer people. It wasn't until the post-WWII period that we experienced any kind of prosperity, and even that is draining away. My uncle lives in a trailer. My dad and stepmom lived in an RV for over two years. But there's no shame in living in a trailer park if you have no debt and can meet your obligations every month while building up your savings. It only seems unpleasant because we've been caught up in the illusion of a higher standard of living--financed by debt.
If we are lucky enough to sell our current house and get out from under this mortgage, my goal is to never carry a mortgage again. Think about it. In the pie chart of where all your money goes, after taxes the mortgage is the biggest single expense in a homeowner's budget. Put another way, you could survive on a lot lower income if you didn't have to pay mortgage or rent. Hence, the basic home ownership survival plan is: rent a house or apartment as cheaply as you can. Practice your savings strategy and/or sit on your investments until you can afford to buy "something" in cash, even if it isn't the ideal house. The point is, it's paid for. As long as you have clear title, it's liveable, and not a money pit, you can always live in it, improve it, borrow against it, and eventually sell it when the market gets better. Then you go out and look for a better one. If you're sick of moving or are already an apartment dweller, consider buying a plot of land, and building your home in stages that you control and that you can afford. Lately I've settled on what is a soon-to-be glutted foreclosure market for our next real estate purchase.
This plan may not appeal to everyone. The big, expensive, brand-new home on the billboard will always sing a siren song to American hearts. But it is the safest way. If you've eliminated your mortgage payment, you've increased your income by 1/3. If the house gets you down at times, you can afford a trip to Rome. But jumping from one house to another, or worse, refinancing the same house over and over, is madness. You're throwing away money on interest and bank fees while decreasing your equity with every move. You may as well light your money on fire.
To sum up, you have to look at the total picture and take control. Just because "everyone else" is buying a house doesn't mean you should. Instead of "buying a house," plan on owning a house.
Thursday, October 11, 2007
Another knitting bleg
Phew! The mortgage article is 99% done! Yes, it took another 3 am nite to do it, but I am excited about sharing it with ya'll. Just need to sleep on it and maybe tweak the ending a bit.
HOWEVER...
This top-heavy (read: 27 1/2 wks pregnant) mom of 2 active little boys has been tapped to do a knitting class for the parish American Heritage Girls group. I knew I should have kept my mouth shut about my husband's sweater!
I've never taught a class before. I have some ideas, but if anyone has done this or knows of a quickie online resource for teaching tips, I'm all ears! I don't know how old the girls are...I was asked to just teach them to make something simple, like a scarf.
Thanks!
HOWEVER...
This top-heavy (read: 27 1/2 wks pregnant) mom of 2 active little boys has been tapped to do a knitting class for the parish American Heritage Girls group. I knew I should have kept my mouth shut about my husband's sweater!
I've never taught a class before. I have some ideas, but if anyone has done this or knows of a quickie online resource for teaching tips, I'm all ears! I don't know how old the girls are...I was asked to just teach them to make something simple, like a scarf.
Thanks!
Tuesday, October 09, 2007
A Little Apology...
I promised a series on wacky ways of saving money...with the next installment, concerning the high cost of housing, overdue by a week or more. This next post, while thoroughly mapped out in my notes, is likely to be delayed a little while longer, because:
1) It promises to be huge. That means a 3 am night for me, and so far I've been too tired.
2) It's a big deal to people and the most technical piece I've done so far. I don't want to screw it up.
3) Comment traffic has gone down...way down. It would be a shame to do all these lengthy posts and have no audience to give feedback. Then they would just get buried in the archives.
I'm also making changes to my template layout and adding more links. Check 'em out. Blog friends, please forgive me. I haven't had much time to give to just looking at and commenting on others' blogs. Lee CT and anonymous readers, thank you and keep checking back. It's people like you who make me feel like this is actually worth the effort!
1) It promises to be huge. That means a 3 am night for me, and so far I've been too tired.
2) It's a big deal to people and the most technical piece I've done so far. I don't want to screw it up.
3) Comment traffic has gone down...way down. It would be a shame to do all these lengthy posts and have no audience to give feedback. Then they would just get buried in the archives.
I'm also making changes to my template layout and adding more links. Check 'em out. Blog friends, please forgive me. I haven't had much time to give to just looking at and commenting on others' blogs. Lee CT and anonymous readers, thank you and keep checking back. It's people like you who make me feel like this is actually worth the effort!
Saturday, October 06, 2007
Happiness is Ephemeral
Since I often try to avoid the news, and emotion-jerking blogs (which, while they may be relevant, often just exist to raise the blood pressure of their readers--to no good purpose), I consider myself well-insulated against culturally-induced depression.
This feeling of mine was reinforced by a news segment that I accidentally caught on NBC Nightly News, which sought to inform viewers that women, on the whole, were unhappy more hours of the week than men (according to "a new study"). While the report may be true (or not), it failed to define happiness, or how such a definition of happiness might be expressed or measured. This leaves us with no useful information, while at the same time, making women feel a sense of unease...how happy am I? we ask when we hear such things. If we hear them often enough, a mild depression is ripe to set in.
However...unhappiness has its purposes.
I might be happy, for instance, at the thought of taking off with a couple of girlfriends for a free-wheeling trip to the Goodwill Outlet Store while DH takes care of the kids. However, on the way there I must pass a fortress-like strip mall wherein resides an abortion mill. This gets me thinking about all the ways we contrive to carry on with our lives despite unspeakable horrors happening under our very nose. These thoughts reduced the "hours of happiness" I may be likely to experience this week. But am I really better off--is the world really better off, had I striven to avoid these thoughts, or if they had not come into my head at all?
I'm happy when my husband comes back from a long trip and, naturally, I expect the kids to be just as angelic as they were when it was just the three of us, but they're often not. Therefore I am more unhappy about their behavior when he's home, which often tarnishes the joy I feel at my husband's company. This causes me to be more firm and consistent in how I enforce the rules (and gives my husband down-and-dirty lessons in parenting). Is this lack of happiness some great tragedy? Should I send an e-mail to Brian Williams?
I'm pretty happy with our family and our life and the direction it's taking...that is, until I get a phone call from a close family member who pitches some immoral scheme to me. And then get hung up on when I categorically refuse to go along with it. Now unhappiness surrounds me like a cloud. I can't stop thinking about it, or talking about it with my husband. My "hours of happiness" for next week are bound to be seriously reduced by the fallout from this situation. However, to acquiesce to such a scheme would have been not only a serious sin for me, but an act of grave uncharity to my erring loved one, who would have been allowed to persist in the delusion that he can get whatever he wants just by pulling enough strings.
News flash to NBC: Happiness isn't everything. Women may feel "unhappy" more hours of the week than men, but it is only because we care more about certain stuff than guys do, and the way we often express caring is through negative emotions...like feeling sad, angry, or depressed. But this doesn't mean that all we need is for the men in our lives to start doing dishes or send us off to the spa. We don't need more laws and legislation designed to "emancipate" us.
What we need to do is accept the unhappiness for what it is--an engine for change--and to pray and act accordingly. The world would be a better place. And that would make everybody happier.
This feeling of mine was reinforced by a news segment that I accidentally caught on NBC Nightly News, which sought to inform viewers that women, on the whole, were unhappy more hours of the week than men (according to "a new study"). While the report may be true (or not), it failed to define happiness, or how such a definition of happiness might be expressed or measured. This leaves us with no useful information, while at the same time, making women feel a sense of unease...how happy am I? we ask when we hear such things. If we hear them often enough, a mild depression is ripe to set in.
However...unhappiness has its purposes.
I might be happy, for instance, at the thought of taking off with a couple of girlfriends for a free-wheeling trip to the Goodwill Outlet Store while DH takes care of the kids. However, on the way there I must pass a fortress-like strip mall wherein resides an abortion mill. This gets me thinking about all the ways we contrive to carry on with our lives despite unspeakable horrors happening under our very nose. These thoughts reduced the "hours of happiness" I may be likely to experience this week. But am I really better off--is the world really better off, had I striven to avoid these thoughts, or if they had not come into my head at all?
I'm happy when my husband comes back from a long trip and, naturally, I expect the kids to be just as angelic as they were when it was just the three of us, but they're often not. Therefore I am more unhappy about their behavior when he's home, which often tarnishes the joy I feel at my husband's company. This causes me to be more firm and consistent in how I enforce the rules (and gives my husband down-and-dirty lessons in parenting). Is this lack of happiness some great tragedy? Should I send an e-mail to Brian Williams?
I'm pretty happy with our family and our life and the direction it's taking...that is, until I get a phone call from a close family member who pitches some immoral scheme to me. And then get hung up on when I categorically refuse to go along with it. Now unhappiness surrounds me like a cloud. I can't stop thinking about it, or talking about it with my husband. My "hours of happiness" for next week are bound to be seriously reduced by the fallout from this situation. However, to acquiesce to such a scheme would have been not only a serious sin for me, but an act of grave uncharity to my erring loved one, who would have been allowed to persist in the delusion that he can get whatever he wants just by pulling enough strings.
News flash to NBC: Happiness isn't everything. Women may feel "unhappy" more hours of the week than men, but it is only because we care more about certain stuff than guys do, and the way we often express caring is through negative emotions...like feeling sad, angry, or depressed. But this doesn't mean that all we need is for the men in our lives to start doing dishes or send us off to the spa. We don't need more laws and legislation designed to "emancipate" us.
What we need to do is accept the unhappiness for what it is--an engine for change--and to pray and act accordingly. The world would be a better place. And that would make everybody happier.
Thursday, October 04, 2007
What I'm Saying
Mike Shedlock dishes out a dose of common-sense advice to his readers. What he's saying sounds remarkably like what I'm in the process of saying. Cut to the chase here.
A few excerpts:
"The best way to avoid drowning in debt is to not get into debt in the first place. Those who are in debt should attempt to get out of it as quick as they can. The way to do this is simple: Live within your means or better yet live below your means."
News flash...
"Just as the housing problem spread from subprime to Alt-A to prime, job losses are highly likely to spread from housing, to commercial real estate, to retail. To protect oneself from a loss of income, it is imperative to have actual cash savings in a money market, short term treasuries, or short term CDs. Those barely able to make home payments now and who have no cash savings, will be in serious jeopardy if they lose a job. Don't be one of them."
This finance guy even takes on grocery shopping...
"Food prices seem to be soaring. Get an electrically efficient freezer and buy what's on sale. Food can easily last three to six months or longer, if properly wrapped in plastic and/or freezer paper. My parents did this. Mom would buy what was on sale, dad would wrap it in freezer wrap and label and date the package. It seems to be a lost art."
Mish usually writes about more technical stuff, so I was amused to see him break into housewife mode. His readers regularly recommend stocking up on gold and ammo. But Mish is not that extreme. He also co-authors an investment newsletter that I happen to subscribe to.
A few excerpts:
"The best way to avoid drowning in debt is to not get into debt in the first place. Those who are in debt should attempt to get out of it as quick as they can. The way to do this is simple: Live within your means or better yet live below your means."
News flash...
"Just as the housing problem spread from subprime to Alt-A to prime, job losses are highly likely to spread from housing, to commercial real estate, to retail. To protect oneself from a loss of income, it is imperative to have actual cash savings in a money market, short term treasuries, or short term CDs. Those barely able to make home payments now and who have no cash savings, will be in serious jeopardy if they lose a job. Don't be one of them."
This finance guy even takes on grocery shopping...
"Food prices seem to be soaring. Get an electrically efficient freezer and buy what's on sale. Food can easily last three to six months or longer, if properly wrapped in plastic and/or freezer paper. My parents did this. Mom would buy what was on sale, dad would wrap it in freezer wrap and label and date the package. It seems to be a lost art."
Mish usually writes about more technical stuff, so I was amused to see him break into housewife mode. His readers regularly recommend stocking up on gold and ammo. But Mish is not that extreme. He also co-authors an investment newsletter that I happen to subscribe to.
Tuesday, October 02, 2007
Commercial Break: Charitable Giving
It occurs to me, when I am in my hard-nosed housewife financial reporting mode, that I am not mentioning my faith very much. Those reading this blog may not be Catholic, but they may be Christians, or other religions, or simply people who are concerned about cancer or the homeless. And they might wonder: where does our charitable giving/tithing practice fit in with all the emphasis on saving and cutting the bottom line?
Part of the reason is because I am taking it for granted that the giving category is not a category that should be cut. Granted, it may shrink from time to time, but it should actually increase as your debt is paid off and your pile of savings starts to grow. There is no need to be pedantic as to the amount. The Catholic Church suggests that, out of a 10% tithe (I am assuming they mean 10% of your net take-home pay), you give 5% to your parish, 1% to the archdiocese, and the rest to the charities of your choice. But the point is that you give a consistent amount, and it should be enough that you "feel" it--remember the widow's mite.
But the actual numbers reveal that most Catholics, sadly, give far less. It's probably because they are feeling the squeeze from taxes, inflation, high housing costs, escalating costs of everything, the double-whammy of paying taxes for public schools while shelling out for private school, etc, etc. Then here comes the priest with another homily about stewardship or another capital campaign. "Sheesh!" they practically roll their eyes in frustration. "Does it ever end?"
I read a statistic today that needs reckoning with. If you are lucky enough to make $50,000 a year, you are in an elite club--the wealthiest 1% in the world! Makes all those parables warning about the fate of rich men hit home, eh? And yet, most people making this figure hardly resemble the rich man of last Sunday's Gospel, who ignored poor Lazarus during life and met his dismal fate in hell. And yet, the forces that keep us so mired in financial navel-gazing must surely be Satanic in origin: advertising, oppressive government taxation and unjust policies, the all-too-easy financing of the last several years. They contrive to make us feel poor, to ponder our checkbooks and shrinking bank balances, wondering if there will be enough for our seemingly endless needs, let alone our desires.
Is it justifiable to clean up our own financial house in order to save (and perhaps even invest)? Or is this just accumulation for its own sake? Would Jesus, suffering on the cross, approve of Bill Bonner, for instance, the founder of one of my favorite financial sites, The Daily Reckoning? After reading his account of spending the equivalent of $800 USD on a night of dinner and theatre while visiting with grown children, then "rousing the girls" to get them to Mass the next morning, I have to be amazed at his candor. He as much admits he's a Catholic by saying so, but he's never commented on the purpose of wealth, or the moral imperative it imposes. Perhaps he fears alienating his readership. But I am watching closely, and so is God.
There are examples of wealthy men in Scripture who are, nevertheless, right with God. We may all wish to be one of them, but we "can't serve both God and mammon." I experienced this dilemma while researching the right allocation mix for my husband's IRA. What right do I have to be trading stocks while other people are starving to death? I asked myself. We have an eighteen-inch tall statue of the Blessed Virgin in our bedroom now--and let me tell you, it's hard to face her sometimes. According to Blessed Mary of Agreda, Mary and Joseph gave one third of their income to the temple, one third to the poor, and lived on the remaining third. Mary lived in grinding poverty her entire life.
And yet, there is the example in Proverbs 31. This woman is my hero, and part of my untiring efforts to keep up my house and find new "efficient" ways to do things is inspired by her example. And yet, she is described as undertaking capital ventures. She makes and sells things. She looks over a field, buys it and plants a vineyard. There is the parable of the talents. The man who did nothing with the talent was punished severely by the master. And everything that we have, both material and non-material, should be considered a gift (a "talent") from the Master. And so we must do something with it.
Obviously, if we're in doubt, we must pray. And the chief part of our prayer should be thanksgiving, even if we have nothing. For God has seen fit to give us what we have, for the sake of our eternal souls. And then we must ask, "How can we be better stewards of the resources You have given us?" This is an excellent prayer for husband and wife to pray together. Then just keep praying it and try to be at peace until God points out some answers. Remember the cardinal virtues of prudence, justice, fortitude, and temperance. Read through one of the Gospels, prayerfully, passage by passage. Keep listening.
All good things come from God. High wages, money in a bank account, even stocks can all be used for the Lord. It's His, anyway. Just ask Him what He wants you to do with it. Same thing with debt. "God, I give it to you. What do you want me to do? Thank you. Help me learn. Help me be a steward of the resources You have given me."
I have an uncle who is deeply in debt. I keep urging him to be thankful, ask God for solutions, and to try to be at peace. We also discuss practical solutions to his problems, but it begins and ends with God. Even Job's riches couldn't save him.
Having said that, I don't think it's against God's will to get our financial house in order. We are being good stewards, is all. Getting ourselves out of debt and providing for reasonable financial needs gets our gaze off our own navels and lifts it back out to the world, where it should be. The difference is in the purposes for our wealth. Don't buy the big-screen TV just because you can afford it. Be ever-mindful of those who don't have as much. Wear out some holes in your socks before you just automatically buy more. Think about people who don't have shoes. Eat some TVP, even if you can afford prime rib. Cultivating poverty of spirit along with prudent money management will cushion some of the knee-jerk desire to spend the money as soon as you have it. Who knows? God might be asking you to help fund a local maternity home.
And keep a watch out for the "Lazarus" in your life.
Catholics must live their faith out loud, and yet they will never be able to do so if they are caught up in the getting-and-spending mode our economy urges on us. In the economic trough ahead of us, the squeeze is just going to get harder, and good jobs and low prices will be scarce. And yet, there will still be parishes to run, churches and schools to build, suffering people to succor. Our wealth is there in part to serve them. Who will give if we do not?
Part of the reason is because I am taking it for granted that the giving category is not a category that should be cut. Granted, it may shrink from time to time, but it should actually increase as your debt is paid off and your pile of savings starts to grow. There is no need to be pedantic as to the amount. The Catholic Church suggests that, out of a 10% tithe (I am assuming they mean 10% of your net take-home pay), you give 5% to your parish, 1% to the archdiocese, and the rest to the charities of your choice. But the point is that you give a consistent amount, and it should be enough that you "feel" it--remember the widow's mite.
But the actual numbers reveal that most Catholics, sadly, give far less. It's probably because they are feeling the squeeze from taxes, inflation, high housing costs, escalating costs of everything, the double-whammy of paying taxes for public schools while shelling out for private school, etc, etc. Then here comes the priest with another homily about stewardship or another capital campaign. "Sheesh!" they practically roll their eyes in frustration. "Does it ever end?"
I read a statistic today that needs reckoning with. If you are lucky enough to make $50,000 a year, you are in an elite club--the wealthiest 1% in the world! Makes all those parables warning about the fate of rich men hit home, eh? And yet, most people making this figure hardly resemble the rich man of last Sunday's Gospel, who ignored poor Lazarus during life and met his dismal fate in hell. And yet, the forces that keep us so mired in financial navel-gazing must surely be Satanic in origin: advertising, oppressive government taxation and unjust policies, the all-too-easy financing of the last several years. They contrive to make us feel poor, to ponder our checkbooks and shrinking bank balances, wondering if there will be enough for our seemingly endless needs, let alone our desires.
Is it justifiable to clean up our own financial house in order to save (and perhaps even invest)? Or is this just accumulation for its own sake? Would Jesus, suffering on the cross, approve of Bill Bonner, for instance, the founder of one of my favorite financial sites, The Daily Reckoning? After reading his account of spending the equivalent of $800 USD on a night of dinner and theatre while visiting with grown children, then "rousing the girls" to get them to Mass the next morning, I have to be amazed at his candor. He as much admits he's a Catholic by saying so, but he's never commented on the purpose of wealth, or the moral imperative it imposes. Perhaps he fears alienating his readership. But I am watching closely, and so is God.
There are examples of wealthy men in Scripture who are, nevertheless, right with God. We may all wish to be one of them, but we "can't serve both God and mammon." I experienced this dilemma while researching the right allocation mix for my husband's IRA. What right do I have to be trading stocks while other people are starving to death? I asked myself. We have an eighteen-inch tall statue of the Blessed Virgin in our bedroom now--and let me tell you, it's hard to face her sometimes. According to Blessed Mary of Agreda, Mary and Joseph gave one third of their income to the temple, one third to the poor, and lived on the remaining third. Mary lived in grinding poverty her entire life.
And yet, there is the example in Proverbs 31. This woman is my hero, and part of my untiring efforts to keep up my house and find new "efficient" ways to do things is inspired by her example. And yet, she is described as undertaking capital ventures. She makes and sells things. She looks over a field, buys it and plants a vineyard. There is the parable of the talents. The man who did nothing with the talent was punished severely by the master. And everything that we have, both material and non-material, should be considered a gift (a "talent") from the Master. And so we must do something with it.
Obviously, if we're in doubt, we must pray. And the chief part of our prayer should be thanksgiving, even if we have nothing. For God has seen fit to give us what we have, for the sake of our eternal souls. And then we must ask, "How can we be better stewards of the resources You have given us?" This is an excellent prayer for husband and wife to pray together. Then just keep praying it and try to be at peace until God points out some answers. Remember the cardinal virtues of prudence, justice, fortitude, and temperance. Read through one of the Gospels, prayerfully, passage by passage. Keep listening.
All good things come from God. High wages, money in a bank account, even stocks can all be used for the Lord. It's His, anyway. Just ask Him what He wants you to do with it. Same thing with debt. "God, I give it to you. What do you want me to do? Thank you. Help me learn. Help me be a steward of the resources You have given me."
I have an uncle who is deeply in debt. I keep urging him to be thankful, ask God for solutions, and to try to be at peace. We also discuss practical solutions to his problems, but it begins and ends with God. Even Job's riches couldn't save him.
Having said that, I don't think it's against God's will to get our financial house in order. We are being good stewards, is all. Getting ourselves out of debt and providing for reasonable financial needs gets our gaze off our own navels and lifts it back out to the world, where it should be. The difference is in the purposes for our wealth. Don't buy the big-screen TV just because you can afford it. Be ever-mindful of those who don't have as much. Wear out some holes in your socks before you just automatically buy more. Think about people who don't have shoes. Eat some TVP, even if you can afford prime rib. Cultivating poverty of spirit along with prudent money management will cushion some of the knee-jerk desire to spend the money as soon as you have it. Who knows? God might be asking you to help fund a local maternity home.
And keep a watch out for the "Lazarus" in your life.
Catholics must live their faith out loud, and yet they will never be able to do so if they are caught up in the getting-and-spending mode our economy urges on us. In the economic trough ahead of us, the squeeze is just going to get harder, and good jobs and low prices will be scarce. And yet, there will still be parishes to run, churches and schools to build, suffering people to succor. Our wealth is there in part to serve them. Who will give if we do not?
Friday, September 28, 2007
WW2: Earn less, get more
Many people who take a hard look at their income/expense picture conclude that the solution is simple--just earn more. But as Amy D. explains early on in the Complete Tightwad Gazette, it's like trying to lose weight by exercise alone, without restricting calories. It takes twice as much work, not to mention time. People who try to earn more in their careers often have to spend more money and time to do so, whether it's achieving an advanced degree, or just working overtime. Some people try to squeeze in a home-based business on the side, but I know from experience that this can be a time-waster and a money-loser, if you're not extremely careful. Often the simplest solution for couples is to add more paychecks--hence the phenomenon of the wife wasting her time on low-paying service jobs.
Am I being pessimistic? There are, after all, lots of women with "good jobs," jobs that required a lot of investment on the front end, and seem to pay off in the short term. And, since I've heard "I need to work" so often, we need to examine the case of the more highly-paid Mrs. Let's say the wife has a moderate-paying job, like schoolteacher or nurse. I firmly believe (tho I have no charts to back this up) that in order for a woman to earn a high enough income to make it worth her while to be in the workforce, she must spend more hours in the workplace. Either it's because her skills confine her to office or service work (which may suck hours in exchage for a fixed salary or offer shift work for a low fixed hourly wage), or she finds herself funneled into public sector jobs, for which there is a fixed wage but more hours of actual work (such as schoolteacher). The one exception seems to be nursing--where a woman can go out, acquire her credentials, and then work a fixed number of hours for a fixed wage that is high enough and doesn't entail more work.
But there is a further cost to the woman's increased income productivity in the workplace. She now spends so many hours outside of the home, that she must "replace herself" and the things that she may have done in the home, with purchased goods and services. This goes above and beyond the cost of daycare and convenience food; the woman says to herself that she is working--therefore she can afford to buy things. And since wholesome family life is lacking, she'll hit the stores to try and replicate it. Ever been in beautifully decorated and furnished homes that stand empty all day? Or perhaps she splurges on twice-monthly maid service. On top of that, there are the children to truck here and there, and programs to put them in so that they don't go home to the empty house, and fees and supplies for those activities. Not to mention the enormous emotional strain that a "productive" wife puts on a marriage. Not only do husband and wife hardly see each other, nor are permitted to serve one another in tangible ways involving their home life, but they spend hundreds of hours a year in the company of co-workers of the opposite sex who may or may not seem more attractive or sympathetic as time goes by. Add the inevitable financial strain of increased expenses that the wife's career was originally supposed to prevent, and you have fertile ground for divorce--the biggest expense of all.
But it isn't my intent to debate the wife who works. Work if you will, only do so with eyes open to the consequences. The fact is, most of us can only increase our productivity up to a point. After you've reached a certain "balance point" (if you will) the IRS will come and take away the surplus. It's sad but true--our modern economy actually punishes increased productivity with increased taxes. The way our progressive income tax works, you get taxed at a lower rate for the first $15,000 of earned income. But each $5- $10,000 (depending on the tax code in a given year) you make beyond that is taxed at successively higher rates. A married couple filing jointly pools their income and gets a standard deduction that is not equal to twice the amount of standard deduction a single person is allowed to take (hence the term "marriage penalty"). Add the wife's income on top of the husband's income, subtract the deduction, and you can see why it generally doesn't pay to make the wife work. They are now in a higher tax bracket. Every bit of extra income the wife brings in is taxed at much higher rates than the husband's. Even if they have a number of itemized deductions (such as their mortgage, daycare, or child tax credits), these "shelters" still represent income that had to be paid out during the year for various expenses...expenses which tend to be higher when both spouses work (since they figure they can "afford" it). An income tax return is not the windfall it seems to be, either. Keep in mind that Medicare and Social Security/FICA taxes are equal to or greater than the federal income tax and you can't claim anything against those. Earn more income, and you'll pay more on them...without ever seeing a penny of it back. The higher tax cost of working wives (even if they are more highly paid), along with increased expenses, can thus erase the perceived gains.
Consider ALL the costs of being employed. Not only are there higher taxes to be paid, but the higher the income, the higher the cost of being employed tends to be. What do I mean? Just one example: let's say you have a long commute in order to get to your workplace. Do you have any idea of what the cost per mile of driving your car is? It's more than just the cost of gas. It's the total cost of every penny you've put into that car--including expected future repairs--divided by the total number of miles you expect to get out of it. You would have to add up your mileage during the year and multiply it by that figure to get the cost of your transportation. How much time do you spend commuting and how much would that time be worth if spent in a more productive way (like if you worked closer and could get there earlier)? Does your commute incur extra costs (lattes, occasional trips to McDonald's for breakfast, SIRIUS satellite radio, etc.)? If you're a woman, you're probably extremely sensitive to what the other women in the office are having, doing, and wearing. The higher your income, the more likely you are to spend more money on clothes, haircuts, handbags, and lunches. Most men are virtually required to carry cell phones anymore, to be perceived as viable job candidates. Increasingly, women and kids are packing cell phones as well. The bills are enormous. What about Internet use? The purchase of other personal electronics (pagers, PDA's, laptops) that seem to "go with" the image or requirements of being an upwardly mobile worker? My husband travels for work and goes through about $100 worth of luggage a year. Add it up.
All of this DOES NOT INCLUDE the cost of the degree track or vocational skills you had to acquire in order to go to work in the first place. Student debt must be factored in to the income a certain career track has to offer...and it only goes up in proportion to the expectation of higher income. Consider the mania over college education. Every child is now encouraged to make a college degree their ultimate goal, regardless of the child's individual potential and preference. But is this a good investment of time and money? How many of us pissed away our college years only to find ourselves hip-deep in student loans with no sense of purpose in life? The lucky ones who did manage to get good jobs and earn more find themselves in higher tax brackets and more expensive lifestyles. Did they really get ahead?
Hey, I'm not trying to rain on anybody's parade here. If you paid your dues and are now pulling down a substantial income and have absolutely no financial worries, kudoes to you. In good times, it makes sense to increase your productivity as much as opportunity and common sense afford. In bad times, people must often consider alternatives they never would have touched before. And times are bad. Median real wages for men and women have gone down for the last five years--and this was during a supposed "recovery." Now our stocks and bonds and houses are "deflating"--losing value--while food, gas, and health care costs continue to rise, as well as the cost of a college education. And all the cheap gewgaws from China are not enough to make up for it. My point is, if the college education doesn't pay, why pay a premium for it?
What you really need to consider is, how can you maximize the income you have to spend on actual LIFE, while minimizing the amount you spend on "cost" (taxes, housing, debt service, cost of employment). Instead of asking yourself how many square feet you can get in a house, or how new a vehicle you can purchase, look at the bottom line and ask, what do I want for my family? Do we want a high quality of life without financial pressures? Would we rather have mom at home, or working at the projects she finds most satisfying? If we think smaller in terms of material things, we can think larger in terms of having a fulfilling family life. Taking summer vacations (the inexpensive kind)...starting a garden...putting an addition on the house by doing it ouselves. Or just watching the leaves fall while the cookies are in the oven. Sometimes the things we enjoy the most are the ones that take more time than money. If you seek to maximize the use of time allocated to producing income, according to the skills and the wage that bring you the most gain with the least tax/debt liability, you can free up the maximum amount of time to spend on family, hobbies, church or civic work.
An inspiring example comes from the pages of the Economic Survival Manual. A working couple, upon toting up all the costs of being employed, promptly quit their jobs, and worked out a plan. Along with their two teenage sons, they each found a part-time job paying $5,000 a year. Since each of them was paying only the minimum in taxes, their disposable income was about the same as when mom and dad spent long hours at work and on stressful commutes. Plus each of them worked only a few months a year to earn his or her share of the family income. The rest was free time! This example comes from 1982, when getting health care coverage was less of an issue, but it's worth it to think outside of the box.
The bugaboo that keeps people from pursuing this plan, however, tends to be the high fixed cost of a mortgage. "Even if the costs are higher," they'll say. "We have to increase income to pay for the house."
We'll tackle that next.
NOTE: In wordy and detailed posts, I'm going to experiment a little with format. Here, I bolded the main idea in each (enormous) paragraph to help readers wade through. Let me know if you prefer it plain, or chopped up into smaller paragraphs, or what have you.
Am I being pessimistic? There are, after all, lots of women with "good jobs," jobs that required a lot of investment on the front end, and seem to pay off in the short term. And, since I've heard "I need to work" so often, we need to examine the case of the more highly-paid Mrs. Let's say the wife has a moderate-paying job, like schoolteacher or nurse. I firmly believe (tho I have no charts to back this up) that in order for a woman to earn a high enough income to make it worth her while to be in the workforce, she must spend more hours in the workplace. Either it's because her skills confine her to office or service work (which may suck hours in exchage for a fixed salary or offer shift work for a low fixed hourly wage), or she finds herself funneled into public sector jobs, for which there is a fixed wage but more hours of actual work (such as schoolteacher). The one exception seems to be nursing--where a woman can go out, acquire her credentials, and then work a fixed number of hours for a fixed wage that is high enough and doesn't entail more work.
But there is a further cost to the woman's increased income productivity in the workplace. She now spends so many hours outside of the home, that she must "replace herself" and the things that she may have done in the home, with purchased goods and services. This goes above and beyond the cost of daycare and convenience food; the woman says to herself that she is working--therefore she can afford to buy things. And since wholesome family life is lacking, she'll hit the stores to try and replicate it. Ever been in beautifully decorated and furnished homes that stand empty all day? Or perhaps she splurges on twice-monthly maid service. On top of that, there are the children to truck here and there, and programs to put them in so that they don't go home to the empty house, and fees and supplies for those activities. Not to mention the enormous emotional strain that a "productive" wife puts on a marriage. Not only do husband and wife hardly see each other, nor are permitted to serve one another in tangible ways involving their home life, but they spend hundreds of hours a year in the company of co-workers of the opposite sex who may or may not seem more attractive or sympathetic as time goes by. Add the inevitable financial strain of increased expenses that the wife's career was originally supposed to prevent, and you have fertile ground for divorce--the biggest expense of all.
But it isn't my intent to debate the wife who works. Work if you will, only do so with eyes open to the consequences. The fact is, most of us can only increase our productivity up to a point. After you've reached a certain "balance point" (if you will) the IRS will come and take away the surplus. It's sad but true--our modern economy actually punishes increased productivity with increased taxes. The way our progressive income tax works, you get taxed at a lower rate for the first $15,000 of earned income. But each $5- $10,000 (depending on the tax code in a given year) you make beyond that is taxed at successively higher rates. A married couple filing jointly pools their income and gets a standard deduction that is not equal to twice the amount of standard deduction a single person is allowed to take (hence the term "marriage penalty"). Add the wife's income on top of the husband's income, subtract the deduction, and you can see why it generally doesn't pay to make the wife work. They are now in a higher tax bracket. Every bit of extra income the wife brings in is taxed at much higher rates than the husband's. Even if they have a number of itemized deductions (such as their mortgage, daycare, or child tax credits), these "shelters" still represent income that had to be paid out during the year for various expenses...expenses which tend to be higher when both spouses work (since they figure they can "afford" it). An income tax return is not the windfall it seems to be, either. Keep in mind that Medicare and Social Security/FICA taxes are equal to or greater than the federal income tax and you can't claim anything against those. Earn more income, and you'll pay more on them...without ever seeing a penny of it back. The higher tax cost of working wives (even if they are more highly paid), along with increased expenses, can thus erase the perceived gains.
Consider ALL the costs of being employed. Not only are there higher taxes to be paid, but the higher the income, the higher the cost of being employed tends to be. What do I mean? Just one example: let's say you have a long commute in order to get to your workplace. Do you have any idea of what the cost per mile of driving your car is? It's more than just the cost of gas. It's the total cost of every penny you've put into that car--including expected future repairs--divided by the total number of miles you expect to get out of it. You would have to add up your mileage during the year and multiply it by that figure to get the cost of your transportation. How much time do you spend commuting and how much would that time be worth if spent in a more productive way (like if you worked closer and could get there earlier)? Does your commute incur extra costs (lattes, occasional trips to McDonald's for breakfast, SIRIUS satellite radio, etc.)? If you're a woman, you're probably extremely sensitive to what the other women in the office are having, doing, and wearing. The higher your income, the more likely you are to spend more money on clothes, haircuts, handbags, and lunches. Most men are virtually required to carry cell phones anymore, to be perceived as viable job candidates. Increasingly, women and kids are packing cell phones as well. The bills are enormous. What about Internet use? The purchase of other personal electronics (pagers, PDA's, laptops) that seem to "go with" the image or requirements of being an upwardly mobile worker? My husband travels for work and goes through about $100 worth of luggage a year. Add it up.
All of this DOES NOT INCLUDE the cost of the degree track or vocational skills you had to acquire in order to go to work in the first place. Student debt must be factored in to the income a certain career track has to offer...and it only goes up in proportion to the expectation of higher income. Consider the mania over college education. Every child is now encouraged to make a college degree their ultimate goal, regardless of the child's individual potential and preference. But is this a good investment of time and money? How many of us pissed away our college years only to find ourselves hip-deep in student loans with no sense of purpose in life? The lucky ones who did manage to get good jobs and earn more find themselves in higher tax brackets and more expensive lifestyles. Did they really get ahead?
Hey, I'm not trying to rain on anybody's parade here. If you paid your dues and are now pulling down a substantial income and have absolutely no financial worries, kudoes to you. In good times, it makes sense to increase your productivity as much as opportunity and common sense afford. In bad times, people must often consider alternatives they never would have touched before. And times are bad. Median real wages for men and women have gone down for the last five years--and this was during a supposed "recovery." Now our stocks and bonds and houses are "deflating"--losing value--while food, gas, and health care costs continue to rise, as well as the cost of a college education. And all the cheap gewgaws from China are not enough to make up for it. My point is, if the college education doesn't pay, why pay a premium for it?
What you really need to consider is, how can you maximize the income you have to spend on actual LIFE, while minimizing the amount you spend on "cost" (taxes, housing, debt service, cost of employment). Instead of asking yourself how many square feet you can get in a house, or how new a vehicle you can purchase, look at the bottom line and ask, what do I want for my family? Do we want a high quality of life without financial pressures? Would we rather have mom at home, or working at the projects she finds most satisfying? If we think smaller in terms of material things, we can think larger in terms of having a fulfilling family life. Taking summer vacations (the inexpensive kind)...starting a garden...putting an addition on the house by doing it ouselves. Or just watching the leaves fall while the cookies are in the oven. Sometimes the things we enjoy the most are the ones that take more time than money. If you seek to maximize the use of time allocated to producing income, according to the skills and the wage that bring you the most gain with the least tax/debt liability, you can free up the maximum amount of time to spend on family, hobbies, church or civic work.
An inspiring example comes from the pages of the Economic Survival Manual. A working couple, upon toting up all the costs of being employed, promptly quit their jobs, and worked out a plan. Along with their two teenage sons, they each found a part-time job paying $5,000 a year. Since each of them was paying only the minimum in taxes, their disposable income was about the same as when mom and dad spent long hours at work and on stressful commutes. Plus each of them worked only a few months a year to earn his or her share of the family income. The rest was free time! This example comes from 1982, when getting health care coverage was less of an issue, but it's worth it to think outside of the box.
The bugaboo that keeps people from pursuing this plan, however, tends to be the high fixed cost of a mortgage. "Even if the costs are higher," they'll say. "We have to increase income to pay for the house."
We'll tackle that next.
NOTE: In wordy and detailed posts, I'm going to experiment a little with format. Here, I bolded the main idea in each (enormous) paragraph to help readers wade through. Let me know if you prefer it plain, or chopped up into smaller paragraphs, or what have you.
Tuesday, September 18, 2007
Wacky Way #1: Don't bother with a budget
Every beginning finance book begins with having you make out a budget. But really, that is stupid advice. I tried!
For a year, I dutifilly sat down with our bank statement and laboriously added up individual check and debit card payments in about ten different categories in an effort to figure out the elusive budget. It didn't work--there were always incidental expenses, impulse buys, random fees and "miscellaneous money" (Who spent $73.47 on check number 2225??). Add to this the fact that when the paycheck comes in, it isn't always a constant number either. I attempted to average our income over a one-year period but that was also a laborious task...one that I would have to repeat year after year (assuming we still had it). And this is coming from a person whose aptitude test scores always registered "accountant" at the top. How is the not-too-keen-on-math person supposed to perform this feat? The answer: don't.
Here's what you do. You need to get the big picture on your finances, and Uncle Sam already forces you to do it. So dig up last year's tax return, and grab a Tupperware lid or something round and draw a big circle on a piece of scrap paper. Fold the paper in half so your lines match until you have some even-numbered amount of divisions in your circle. You start with your total amount of compensation on your W-2's (don't rely on the figure in box 1--add up all the little bonuses and benefits that are listed separately, because that list represents your total compensation). If your household depends on income from some other source, add that in. Don't worry about interest or dividends--just the income that you are counting on to come in on a monthly basis to pay the bills. This is the size of your pie. Write that amount across the top of the page.
Now start going through your deduction paperwork. It should tell you how much you've paid toward interest, principle, and taxes on your house (or you could just add up your rent, if you're lucky enough NOT to owe on a mortgage). Next, add up all the types of compensation on the W-2 that do not come to you in the form of money, because these represent money that you paid out through the company for various benefits that they administer for you (health care premiums, 401(k), etc). Then add up all the boxes of taxes that were taken out (don't forget state income tax and even sales tax). Get out your trusty calculator, figure the percentages, and draw them into your pie. You can see that these three categories already take a massive chunk out of your total take-home income. Don't get discouraged--we'll tackle these in later posts.
Next, add up your debt-service payments such as car loans, credit card bills, student loans, and any other debt that you pay a monthly interest payment on. If the payments differ from month to month, try to get an average and multiply by 12. Draw that one into your pie.
Now from here, you can take this exercise as far as you want--adding up your health care costs, charitable giving, food costs, utility costs, phone, whatever. The purpose of the exercise is to get you to see, of course, that what you are making on paper is far more than what you actually see in your bank account. So the next time you are feeling "rich" because you figure you make such-and-such and your house is worth such-and-such and you're tempted to splurge...just remember how small of a slice of that overall pie you are living on.
Your first goal, at the beginning of this money-management odyssey, is to get rid of all non-mortgage debt. To do that, you have to come up with extra money--and unless you are about to get a raise or big promotion (and assuming you don't want to have to send the Mrs. to work), you're going to have to reduce or eliminate some spending to free up money to pay off debt.
Do you see why budgets don't work? The moment you have a figure posted in your head, say $300 on food for the month, or $75 on a phone bill, you find yourself spending the whole amount, thinking you can "afford it"--without any incentive to examine the expense for more ways to save, substitute, or sacrifice. This is why governments may make "budgets," but they always overspend them.
Instead, aim for spending as little as possible. Try to find ways to keep cutting as the months go by. Monitoring your bank statements helps, as well as NOT pulling cash from the ATM. Cash tends to get frittered away, whereas every debit charge gets recorded on your monthly bank statement. Ruthlessly analyze this statement for at least six months, and slash extraneous expenses. This can be distressing at first, because unexamined spending tends to be loose indeed. But you will save far more this way, and will not be tempted to "go over," because you are always seeking the lowest possible cost. Once you've reached the level where you can't go any lower, you can note down the numbers if you like and call it a budget.
But don't get complacent.
The goal is to find money and re-direct it toward paying off debt. This will be easy at first, but gets harder as you go. Examine every utility and telecommunications bill that you get. Read insurance contracts and question charges that you don't understand. Shop loss-leader sales at the supermarkets and be sure to record prices in your notebook. Ask around for tips on saving money, and look for money-saving books and web sites. I only recommend The Tightwad Gazette because it is the most comprehensive re-education in frugality you can get for the money, and highly entertaining, too.
You might become obsessed with money for a little while, because you are embarking on a whole new lifestyle, but try to remain low-key about it. Comments like, "Hey, honey, when I mix your gourmet coffee grounds with half Folgers, we save 25 cents a cup!" may not go over too well. It's hard to convince the family that your goal is their eventual financial freedom when all they hear about is how wasteful they are with money. Just do what you can to work around the edges until the numbers finally begin to convert your husband. Then feed the kids on your vision of what debt-free life could look like. You could take trips. They could go to a horse-riding camp. If they would just give up their expensive sneaker obsession, it would be enough to pay for a family cell phone plan, or whatever ideas you can think of...
If you are lucky enough to have a small-ish debt or no debt at all, great! You can move on to the next phase of the plan that much faster. After all the non-mortgage debt is paid off, you will experience a surplus. Not only did you save money by cutting expenses, but now all that money that was going toward debt is freed up for your next financial goal--a six-month emergency savings cushion. "Great!" you say. "I didn't have any debt to begin with, so I didn't even have to cut expenses!"
STOP!!
You still need to cut your expenses as far as possible...not only does it become a fun challenge (when you're not stressed over debt), but you'll never be able to afford a six month cushion if you keep expenses at current levels. This is why people don't have an emergency fund--they figure they'd never be able to save that much. Plus, you'll still want the money for some other goals worth pursuing, so trust me on this one. Discipline yourself for one year or so and you'll soon find that saving and the tightwad mentality become second nature.
For some people, this is all too much. They would rather just re-finance or roll the debt onto a low-interest credit card, or tell the wife she "needs to contribute" with a low-paying service job. But what I hope you will eventually realize is that our life and our labor are valuable. That is our form of capital.
We may not own factories or natural resources or large tracts of land--we own our labor. And we housewives who depend upon our husbands' labor do not want to see it go to waste. Neither can we afford our own energy or interest in our family to get frittered away. For Catholics, this process is packed with great virtues like prudence and stewardship. Don't forget to pray for the help and resources you need. It might be a part-time job, for a while.
But don't lose sight of your ultimate goal, which is to be the God-centered family you always knew you should be.
For a year, I dutifilly sat down with our bank statement and laboriously added up individual check and debit card payments in about ten different categories in an effort to figure out the elusive budget. It didn't work--there were always incidental expenses, impulse buys, random fees and "miscellaneous money" (Who spent $73.47 on check number 2225??). Add to this the fact that when the paycheck comes in, it isn't always a constant number either. I attempted to average our income over a one-year period but that was also a laborious task...one that I would have to repeat year after year (assuming we still had it). And this is coming from a person whose aptitude test scores always registered "accountant" at the top. How is the not-too-keen-on-math person supposed to perform this feat? The answer: don't.
Here's what you do. You need to get the big picture on your finances, and Uncle Sam already forces you to do it. So dig up last year's tax return, and grab a Tupperware lid or something round and draw a big circle on a piece of scrap paper. Fold the paper in half so your lines match until you have some even-numbered amount of divisions in your circle. You start with your total amount of compensation on your W-2's (don't rely on the figure in box 1--add up all the little bonuses and benefits that are listed separately, because that list represents your total compensation). If your household depends on income from some other source, add that in. Don't worry about interest or dividends--just the income that you are counting on to come in on a monthly basis to pay the bills. This is the size of your pie. Write that amount across the top of the page.
Now start going through your deduction paperwork. It should tell you how much you've paid toward interest, principle, and taxes on your house (or you could just add up your rent, if you're lucky enough NOT to owe on a mortgage). Next, add up all the types of compensation on the W-2 that do not come to you in the form of money, because these represent money that you paid out through the company for various benefits that they administer for you (health care premiums, 401(k), etc). Then add up all the boxes of taxes that were taken out (don't forget state income tax and even sales tax). Get out your trusty calculator, figure the percentages, and draw them into your pie. You can see that these three categories already take a massive chunk out of your total take-home income. Don't get discouraged--we'll tackle these in later posts.
Next, add up your debt-service payments such as car loans, credit card bills, student loans, and any other debt that you pay a monthly interest payment on. If the payments differ from month to month, try to get an average and multiply by 12. Draw that one into your pie.
Now from here, you can take this exercise as far as you want--adding up your health care costs, charitable giving, food costs, utility costs, phone, whatever. The purpose of the exercise is to get you to see, of course, that what you are making on paper is far more than what you actually see in your bank account. So the next time you are feeling "rich" because you figure you make such-and-such and your house is worth such-and-such and you're tempted to splurge...just remember how small of a slice of that overall pie you are living on.
Your first goal, at the beginning of this money-management odyssey, is to get rid of all non-mortgage debt. To do that, you have to come up with extra money--and unless you are about to get a raise or big promotion (and assuming you don't want to have to send the Mrs. to work), you're going to have to reduce or eliminate some spending to free up money to pay off debt.
Do you see why budgets don't work? The moment you have a figure posted in your head, say $300 on food for the month, or $75 on a phone bill, you find yourself spending the whole amount, thinking you can "afford it"--without any incentive to examine the expense for more ways to save, substitute, or sacrifice. This is why governments may make "budgets," but they always overspend them.
Instead, aim for spending as little as possible. Try to find ways to keep cutting as the months go by. Monitoring your bank statements helps, as well as NOT pulling cash from the ATM. Cash tends to get frittered away, whereas every debit charge gets recorded on your monthly bank statement. Ruthlessly analyze this statement for at least six months, and slash extraneous expenses. This can be distressing at first, because unexamined spending tends to be loose indeed. But you will save far more this way, and will not be tempted to "go over," because you are always seeking the lowest possible cost. Once you've reached the level where you can't go any lower, you can note down the numbers if you like and call it a budget.
But don't get complacent.
The goal is to find money and re-direct it toward paying off debt. This will be easy at first, but gets harder as you go. Examine every utility and telecommunications bill that you get. Read insurance contracts and question charges that you don't understand. Shop loss-leader sales at the supermarkets and be sure to record prices in your notebook. Ask around for tips on saving money, and look for money-saving books and web sites. I only recommend The Tightwad Gazette because it is the most comprehensive re-education in frugality you can get for the money, and highly entertaining, too.
You might become obsessed with money for a little while, because you are embarking on a whole new lifestyle, but try to remain low-key about it. Comments like, "Hey, honey, when I mix your gourmet coffee grounds with half Folgers, we save 25 cents a cup!" may not go over too well. It's hard to convince the family that your goal is their eventual financial freedom when all they hear about is how wasteful they are with money. Just do what you can to work around the edges until the numbers finally begin to convert your husband. Then feed the kids on your vision of what debt-free life could look like. You could take trips. They could go to a horse-riding camp. If they would just give up their expensive sneaker obsession, it would be enough to pay for a family cell phone plan, or whatever ideas you can think of...
If you are lucky enough to have a small-ish debt or no debt at all, great! You can move on to the next phase of the plan that much faster. After all the non-mortgage debt is paid off, you will experience a surplus. Not only did you save money by cutting expenses, but now all that money that was going toward debt is freed up for your next financial goal--a six-month emergency savings cushion. "Great!" you say. "I didn't have any debt to begin with, so I didn't even have to cut expenses!"
STOP!!
You still need to cut your expenses as far as possible...not only does it become a fun challenge (when you're not stressed over debt), but you'll never be able to afford a six month cushion if you keep expenses at current levels. This is why people don't have an emergency fund--they figure they'd never be able to save that much. Plus, you'll still want the money for some other goals worth pursuing, so trust me on this one. Discipline yourself for one year or so and you'll soon find that saving and the tightwad mentality become second nature.
For some people, this is all too much. They would rather just re-finance or roll the debt onto a low-interest credit card, or tell the wife she "needs to contribute" with a low-paying service job. But what I hope you will eventually realize is that our life and our labor are valuable. That is our form of capital.
We may not own factories or natural resources or large tracts of land--we own our labor. And we housewives who depend upon our husbands' labor do not want to see it go to waste. Neither can we afford our own energy or interest in our family to get frittered away. For Catholics, this process is packed with great virtues like prudence and stewardship. Don't forget to pray for the help and resources you need. It might be a part-time job, for a while.
But don't lose sight of your ultimate goal, which is to be the God-centered family you always knew you should be.
Friday, September 14, 2007
Top Ten Wackiest Ways to Save Money
Let's face it, finance can be a boring topic. You can plow through manual after manual purporting to give financial advice, especially to householders, and find (along with perhaps some interesting bits) the same budgeting worksheets and the same safe n' sane investment advice doled out over a generation. Considering how popular these books are, you'd think more people in America would be managing their bottom line better.
BUT THEY'RE NOT!
The real savings rate for US citizens is now -1.3%.It hasn't been this bad since the Depression. Which is pretty much what Amy D. sums up in the first few pages of The Tightwad Gazette, Book One.
For people who are dang near desperate for money-management advice (and don't want to fall asleep learning about it), the unconventional approach is worth a look. For instance, have you considered trying some of these offbeat ideas?
1. THROW YOUR BUDGET OUT THE WINDOW
2. EARN LESS
3. DUMPSTER DIVE
4. HIDE YOUR MONEY IN YOUR MATTRESS
5. LIVE IN A BUS
6. FLEE YOUR 401(K)
7. GIVE BIRTH AT HOME
8. EAT CAT FOOD
9. BUY "LOSER" STOCKS
10. FREQUENT PAWN SHOPS
Sound sensational? I hope so, because this post is an introduction to a series I've already mostly written, according to the subtitles above. Look for each new post with a lag time of 1-3 days to allow for editing (and possible teething). I'm serious about spewing out my new-found insights to anybody who feels like they might benefit from them...so stay tuned....
BUT THEY'RE NOT!
The real savings rate for US citizens is now -1.3%.
For people who are dang near desperate for money-management advice (and don't want to fall asleep learning about it), the unconventional approach is worth a look. For instance, have you considered trying some of these offbeat ideas?
1. THROW YOUR BUDGET OUT THE WINDOW
2. EARN LESS
3. DUMPSTER DIVE
4. HIDE YOUR MONEY IN YOUR MATTRESS
5. LIVE IN A BUS
6. FLEE YOUR 401(K)
7. GIVE BIRTH AT HOME
8. EAT CAT FOOD
9. BUY "LOSER" STOCKS
10. FREQUENT PAWN SHOPS
Sound sensational? I hope so, because this post is an introduction to a series I've already mostly written, according to the subtitles above. Look for each new post with a lag time of 1-3 days to allow for editing (and possible teething). I'm serious about spewing out my new-found insights to anybody who feels like they might benefit from them...so stay tuned....
Subscribe to:
Posts (Atom)
