Friday, January 30, 2009

Living Low on the Hog

I don’t know much about finances. I know that sometimes you can buy meat that is less than fresh and save a few dollars but you are also playing an intestinal roulette. I know that Kroger’s and Albertson’s double coupons up to 50 cents and triple them up to 35 cents. I know that a new car depreciates in value dramatically once you drive it off the lot as opposed to a used car with only 20,000 miles on it which you can get for $7,000 less. I know that owning is better than renting. But I am constantly amazed at what a Unabomber life I lead, financially speaking, compared with my friends. There is not much of a paper trail on me. I used to be somewhat ashamed of this. Everyone I knew either had credit cards or 401k’s or stock portfolios or bonds or a friend named Madoff who had some hot tips on a horse in the second race tomorrow. I was jealous.

Let me back up. I HAD credit cards at one point in time. The day I turned 18, I applied for every chintzy credit card I could get my hands on. None of them had a credit limit of more than $500. My reasoning was that it was a test for me. I would give myself the first taste of “buy now, pay later” freedom and adulthood. If I managed to make an effort to keep up on the payments, that meant that I was ready to be an adult and vote and buy cigarettes and enlist in the Army. If I didn’t, 7 years bad credit luck would follow me and curse me for being irresponsible. And I figured that if I was irresponsible at 18, I was probably only going to start to gain a sense of financial responsibility by the time I reached 25. I am ashamed to admit that I did exactly what you expect an 18 year old girl with three credit cards to do. I bought tacky clothes from the mall and probably made a payment or two in a weak effort to seem responsible. And so the spectre of bad credit followed me to car dealerships and cell phone providers for years.

Only within the past few years have I emerged from the Pigpen-esque dust cloud of bad credit. But I feel like in those years where I was banished from the kingdom of things like car rentals and online shopping, I developed Survivor-like abilities to get around this big bad world without the use of credit cards or loans or funny money. Quite simply, if I didn’t have it, I didn’t spend it. It was a very Prairie House existence which was weird for me considering that I live in the City that Leases Built. So once I was able to do simple things such as buy a decent car and get a decent apartment in a non-bullet ridden part of town, I realized I didn’t need or want too many lines of credit. I had also found myself working for a business that existed solely upon a CEO who bounced between investor to investor, signing away more and more of his own personal stability in the interest of raising more capital. I breathed easy at night when I drove my modest used Honda to my modest one-bedroom apartment at night knowing that I had not leveraged my internal organs that day in order to raise another round of funding.

So now I find myself in the midst of an ECONOMIC MELTDOWN!!!!!!!!!!!!!!! with my first 401k ever. I get letters about money getting put into it. God knows I’m not putting money into it. My money is foolishly going to things like rent and groceries and gas. To see people dealing with things like foreclosures and bankruptcy and repos and stuff, I really do get very upset. It’s horrifying and I can’t imagine if I had children and was going through something like that. I really cannot express how upsetting it all is. The only personal thing that I can say is that I am glad that I have learned from this economic tittytwister the following gem: you don’t have too far to fall or too much to lose when you live relatively low on the hog. Again, that is not casting judgment on those that have lost their house or can’t make their credit card payments. I guess all I am saying is that, though my aversion to credit and loans and credit cards did not start from some noble principle but rather from a youthful spree of maxing out cards at the mall, I am glad that it’s a lesson I learned early enough.


Tom said...

Excellent post. We all learn lessons about money at some time or another. But those with a 300K house, 2.5 kids, maxed-out credit and leased cars get a harsher dose of reality.
Your 401(k) will bounce back, and you could have a chance to take advantage of some first-time buyer deals as the housing market rebounds.
In other words, those who have already suffered the low-hog living will reap future rewards, so good on you.

Don in Austin said...

Good on ya! Looks may fade but thrifty is sexy forever. I've had $ wars for years with my wife (I'm the saver), winning a few and losing a few (not recommended), so you'd do well to stick with the plan. Stock prices are low right now so there is the whole dollar cost averaging thing, fwiw. Living within your means is great, saving is even better. Congratulations on learning that young.

Anonymous said...

What do you call going to a Mavs game? That's the ultimate no value for your money.

Anonymous said...

Gaz and I have been pretty much saying the same thing to each other for months. Both of us are just now coming out of a period of really horrible credit, so anything we have acquired as a married couple has been bought and paid for. Car? Sure it's nearly 20 years old, but it works like a charm and is paid off. We rent b/c we live in a city where you have to have a billion pounds to own, and frankly I don't know if I want to live here for forever. Our biggest cost is actually eating out or buying cozy middle class foodstuffs because we like to eat. I'm sure it's going to be harder when the sprog arrives, but really we'll just go out to eat less and spend that money on diapers and childcare a couple of days a week and will be just fine. I'm SOOOOOO GLAD I learned how to live on the cheap. this credit crunch hysteria sucks but for those of us who are too tied down, it's shockingly had no impact on our lives. Slow and steady and living with a poor mindset wins the race!