Friday, April 22, 2016

On Living Beyond Your Means

     It’s a story that’s been played out a million times and more:

     It’s a story of a well-educated, exceptionally accomplished father with a wife and two children—and of a family who got boiled alive, lobster-style, by slowly getting used to living beyond their means.

     And it can happen to high and low alike:

     The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew?      Well, I knew. I knew because I am in that 47 percent.
     I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. I know what it is like to have liens slapped on me and to have my bank account levied by creditors. I know what it is like to be down to my last $5—literally—while I wait for a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs. I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn’t know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil.

     I’ve been there. Chances are good that you’ve been there too, if only temporarily. The number of Americans who’ve faced the financial abyss grows daily – and not always because of “bad luck.”

     In the early Nineties, the C.S.O. worked in the “Workout and Recovery” department of a midsize bank. Her duties were among the most unpleasant customer-relations chores a bank must face: dunning mortgagors who have fallen behind by four or more payments and arranging some means by which their debts could be met. She and her colleagues not-so-jokingly called it the “WAR department.” They had good reasons.

     She brought home a number of stories, some of which were enough to turn your hair white. Probably the most vivid of them concerned a two-earner family – two high earners, mind you; their combined annual income was over $300,000 – that had really and truly “maxed out.” They had two homes, both heavily mortgaged; two luxury cars, with large loans on both; and a slew of credit cards, on each of which they had borrowed all the way to the limit. And they were seriously in arrears on every one of those obligations.

     The capstone event came when Beth decided this family was either unwilling or unable to meet its mortgage payments. She “packaged and shipped” both their mortgages, meaning she sent the paperwork to the bank’s legal department to begin foreclosure proceedings. She then notified the family by mail that she had done so.

     The next day she got a “You can’t do this to us” phone call from the wife, who was driving her top-of-the-line Audi at the time.

     I don’t think anyone can reasonably claim that that family’s financial problems were due to “bad luck.”

     “Living beyond your means” is a pitchfork of seduction; it has more than one prong with which to impale you. Yes, you can fall into it in the wake of a financial setback that finds you unprepared to downscale. However, you can also succumb to it from an undisciplined desire for things; or because the State is taking so great a fraction of your income that it becomes difficult to do otherwise; or “for the children.” Combinations of these influences are also possible.

     In the one-breadwinner days of the middle Twentieth Century, we became accustomed to living well: vacations, second homes, boats, foreign travel, and the gradual ascent to ever better standards of living. The remedy when the Carter inflation hit was for the wife to get a job – but for a family with minor children, that came with additional costs. That put pressure on young families to delay childbearing – and that came with costs of its own that few of us foresaw and still fewer understood. A sociologist at Bakunin Academy, one of Hope’s foremost centers of higher learning, sees it this way:

     “A colleague of mine at Bakunin, whose concentration is socio-economics, has studied the correlation between fertility rates and per capita wealth for nearly two centuries. He says there’s no escaping the conclusion that as a people grows wealthy, it ceases to breed. Earth data does indeed suggest that. The richest of Earth’s nations had fertilities below replacement level—below the rate at which the population could sustain its numbers, much less increase them.
     “As it happens, those very rich societies had become obsessed with what they called ‘youth culture,’ and the concomitant assumption that the young deserved whatever they might happen to want. What the young mostly wanted, then as now, was playthings. Families with young children routinely buried themselves in children’s toys, some of which were crafted to appeal to an adult’s frivolous side as well.
     “Now, we know from historical data that predators of all sorts will concentrate where the prey is fattest. The State, which is merely an organized band of predators with a veneer of legitimacy derived either from tradition or from a manufactured appearance of the consent of its subjects, took a huge fraction of its subjects’ annual production from them in taxes. A typical State would increase its exactions on its subjects faster than those subjects could increase their own fortunes. That compelled wage earners to strive ever harder just to run in place, with obvious consequences for production and marketing. Of course, after some point has been reached, the economic frontier will be purely discretionary items: entertainments, diversions, toys, and the like. Thus, the ever-accelerating production of junk was reinforced by two powerful impetuses.”

     One of his competitors at Gallatin University differs somewhat:

     “My Bakunin colleague would say that the typical family was limiting its total economic exposure by having very few children or none, since the expense of child-rearing in a heavily regulated State exceeds any other expense by a considerable margin. Parents wanted their children to ‘have it all,’ as the saying went, but with such a large State burden, which not only reduced the family’s effective earnings but dramatically increased the price of every good for sale, most couples couldn’t square that desire with a family of Hope’s typical size.
     “I see things differently. Families are the fundamental building blocks of a stable society. Extended families—clans—are the best conceivable environment for the rearing of children, the perpetuation of a commercial forte, and the germination of new families and their ventures. A clan like yours, Miss Albermayer, conserves a brilliant genetic line and a priceless medical specialty at the same time. A clan like yours, Mr. Morelon, makes possible a benign agricultural empire and produces natural leaders one after another while connecting Hope to its most distant origins. And all healthy families, which cherish life and bind their members to one another in unembarrassed love, can find far more to occupy and amuse them than they need.
     “When Earth’s regard for families and their most fundamental function deteriorated, her people ceased to enjoy the sorts of ties that had held them together throughout the history of Man. Without families, and especially without children, they groped for other things to fill their time, whether to give them a sense of purpose, or to distract them from the waning of their lives. Some invested themselves in industry or commerce, but without the sense of the family line to be built up and made prominent, those things failed to satisfy. Others immersed themselves in games, toys, fripperies, and increasingly bizarre forms of entertainment, which palled on them even faster. Still others made a fetish out of sex; there was a substantial sex industry on Earth, though it tended to operate in the shadows and was seldom openly discussed. They needed emotion and substance, but all they could contrive was sensation and novelty, and they pumped an ever greater share of their effort and wealth into seeking them.”

     Though I am by no means a sociologist, both views strike me as more correct than not.

     Better a dinner of herbs where love is than a stalled ox and hatred therewith. [Proverbs 15:17]

     We can only love that which can love us in return: others of God’s creatures. Humans can love one another: relatives, friends, spouses, children. The least fortunate of us must make do with pets. But no one can love inanimate objects. That doesn’t mean a lot of folks won’t try...some because loving other humans, with all out faults and insufficiencies, is just too damned hard.

     One of my earliest short stories concerned such a person:

     Schiffers had turned forty only a few weeks ago. He had chosen to ignore the event, nor had anyone else commemorated it with so much as a greeting card. His apartment had not been thoroughly cleaned for a very long time, and looked like the worst nightmare any woman has ever had about a bachelor’s flat. He had ceased to notice the disorder or the dirt. It was his habit to concentrate on a single enthusiasm at a time, which usually centered on some item he had just bought.
     But he had not bought anything new for himself lately, and his old diversions and amusements did nothing for him. The expensive stereo, the synthesizer, the video game system, the big screen TV, the home computer, his Italian sports car, all had palled on him. It would undoubtedly be awhile before he could buy any more toys, for he no longer had a valid credit card, and no one in the area would accept his checks.
     All his adult life, he had indulged himself despite inadequate ability to pay. A complete list of his creditors would include names he could no longer remember.
     He made a decent living, especially for a single man. His legal obligation to his ex-wife was not crippling, and they had had no children. Yet he was always short what it would take to pay: for his necessities, for his alimony, for the many things he saw in store windows and knew at once that he had to have.

     What void in his life do you think Richard Schiffers was trying to fill?

     You probably thought from the title that this piece would be about financial management, or perhaps the pernicious effects of swollen taxation on us poor victims of the State. I’m not well enough versed in the former subject, and I’ve written about the latter all too often. So I decided to write about something really important that’s becoming ever scarcer among us.

     The obsession with material acquisition that so often results in living beyond one’s means is almost always a symptom of a love deficit. It might stem from having been rejected by all those around the sufferer. Alternately, it might have been he who did the rejecting. Finally, there are narcissists and psychopaths among us: persons who haven’t the capacity for love. The causes vary; the consequence is often the same.

     To love is to seek contact: to touch. No one can sincerely love at a remove. Robert A. Heinlein has counseled us to touch one another:

     Touch is the most fundamental sense. A baby experiences it, all over, before he is born and long before he learns to use sight, hearing, or taste, and no human ever ceases to need it. Keep your children short on pocket money—but long on hugs.

     The wisdom of that statement is overwhelming. Nor should the practice be confined to parent-child relationships alone.

     Keep that in mind during your spring cleaning.


Stewart said...

This posting indeed hits home for me. 51 years of age, no children, technically married but separated and it's doubtful the trust will ever return enough for the marriage to be salvaged, and with an inverted pyramid for a family (no nieces or nephews, no prospect of either, and extremely unlikely I'll ever remarry).

Given my philosophical proclivities, I'm painfully aware of the ramifications. At this point, I content myself with diversions, with work, with my duty to my ageing parents, and with whatever shreds of my marriage still exist.

Once I'm done with my duties in life, I often tell people that I plan to grow a beard, knock out most of my teeth, buy a burro, and head out into the desert with a gold pan. You never know.

Unknown said...

Well put, Fran-o!

Bruce said...

Yes it can be easy to fall into that situation, especially in a consumer driven economy where attempts to seduce you into spending are everywhere. Never been seduced into a fancy vehicle. Always stuck to the practical.

Always tried to live below our means. So that vacation might have been a camping trip or visit to relatives. Deferring to the more modest cost items in the grocery store, shopping the real specials and using coupons. And that meant telling your teenager you won't pay for his latest wish list item because you were trying to save some of those current earning so you won't be "a burden on the children" in your old age. We have a modest home but it is paid for.

Unknown said...

Yep, you're correct, Fran. You by any means ain't no sociologist. You're much better than one of them. And much better than a psychologist. And certainly a better than average wordologist. Otherwise, I would have just flown right on by when my son (he's fifty now) steered me on to your site last fall. So I will just continue to pepper your blog with doggerel on occasion. I thought your posting was a gem, laced with some personal insights that revealed a bit of your heart. God bless the tips of your fingers as the continue to caress the keyboard.

Anonymous said...

Fall of 1953, sweating the first paycheck from a new job, I was broke. Hocked everything I could; still low on food money. Okay, got paid--and then Ike sent me "Greetings". The Army helped me grow up. I got my act fairly well together.

Debt is a good tool, if you can use it to make a profit.

Life is better if you're not "all eat-up with the I-wants".

Money goes out faster than it comes in, so don't be in a hurry to buy.

Pay the bills first, then play.

Lay some money by against a rainy day. Amazing what forty years of compound interest has done for me.