Anybody else see this article among the Yahoo headlines yesterday? It's called "How to Earn $100,000 and Still Feel Poor." I don't know what my problem is, but whenever I stumble upon an article like this, I am compelled by some self-destructive mental illness to read it even though I know it will make me mad.
The first bold statement says, "Is six figures the new minimum wage?" Um, I think not. Not only is it not the new minimum wage, but it must be downright offensive to anyone actually working hard to earn the real minimum wage and scrape on by. So there I was, two paragraphs in and already mad. But if I stopped, I couldn't indulge my aforementioned mental illness so I kept on reading. And truly, it wasn't so bad as I had expected. In a kind of sideways of way, I sort of felt bad for this woman. She's getting older. She's saved and invested and her stocks have declined with the lousy market. She bought her house at the top of the bubble when it seemed buying a house couldn't possibly go wrong. And then, well, it turns out that it could. She's had the tenacity to stick with the house instead of just leaving and letting the banks pick up the tab. She's got two sons in college. She lives relatively debt-free (car and house debts, but no credit card).
After concluding the article, I determined that she was not the complete idiot I'd assumed her to be and that she has, in fact, been a bit of a victim to some lousy timing in a lousy market. That could have happened to most of us. However, after finishing the article I also realized that she's also a bit of a disciple for and victim of the "New Frugal." The New Frugal spends less than it believes everybody else to be spending. The New Frugal has tons more (in money, possessions, and even security) than their Old Frugal grandparents did, but still woefully less than the Joneses. In fact, in the world of the New Frugal, the gap between the New Frugals and the Joneses might even be widening. The Yahoo article seemed to tip its hat at this idea: for example, the writer (Laura Cone) pointed out that her kids were both in college, but that it was community college, not ivy league college and she was still feeling the pinch. Then of course, there's the possibility that the New Frugal just feels itself ever poorer because the Joneses are so constantly up in their faces thanks to advertising, the media, and reality TV stars.
In the following discussion of the New Frugal, I don't wish to be a condescending jerk. There are a lot of us who are part of this ideology and I admit to being sometimes among this group myself. Yet after reading the article, I couldn't help but feel a little bit haunted by all that we--the New Frugal--have while still considering ourselves not so very well off as we'd like to be. Below you'll find a little breakdown, inspired by yesterday's Yahoo article, of the New Frugal versus the Old Frugal.
1. The New Frugal lives in a much bigger house than the Old Frugal ever did.
1a. Also, the New Frugal tends to trade up its houses while the Old Frugal usually lived in a house for most if not all of their lives.
1b. Oh--and one more thing--the New Frugal likes to live in new or nearly new houses. They might even consider these a good investment since they believe they'll break down less quickly and need fewer repairs.
What's wrong with that?
Well, nothing is inherently wrong with a bigger, nicer, newer house. Yet it makes us much more susceptible to bursting bubbles, the wooing of contractors building new stuff, and the idea--which I believe from personal experience is false--that new homes break down less quickly than old ones. (I believe older homes in good neighborhoods tend to have been built with better stuff than their price-comparable newer brothers. Or that the prior inhabitants have already made many of the necessary repairs and that they haven't skimped on something like the roof or the carpet because they knew they'd be living with it for a while. Builders have no such motivation.) I realize that it's not always possible or even prudent in today's world to stay in one house forever. Yet I can't deny that the constant trading up to this year's newest, bigger house is something our grandparents would never have even considered.
2. The New Frugal considers herself debt-free even with a car loan or a house loan or sometimes even lingering student loans. These, the New Frugal considers to be unavoidable parts of modern life. To the New Frugal, the only real "debt" is consumer or credit card debt.
What's wrong with that?
You're not debt-free until you're debt-free. Yes, I recognize that all debts are not created equal--some really do lead you on to places where you can earn more money. For example, I realize that one must sometimes have a car to get to work. But we--the New Frugal that is--have come to accept this idea a little too readily. A car our grandparents would have scraped up the money for and paid for up front becomes the car we need to buy to get to work becomes a nicer car we need to buy to get to work becomes 2 family cars we need to buy to get to work and to shuttle junior around to soccer and dance becomes 2 nicer cars we need to buy to shuttle junior around becomes a car for junior so you don't have to shuttle him to work becomes a car for junior so you don't have to shuttle him to soccer/dance becomes a car because all the other parents are buying their kids nice cars becomes.. yeah, you get my point, a big car debt. That you really didn't need. But that you can convince yourself you needed if your work at it a little bit. The same is true of a house. Or of student loans. It's starting to be true of the clothes we wear (people wouldn't respect us in last year's suit, right) or the phones we "need."
3. The New Frugal believes it's their moral, civic, and every other duty to put their kids through college.
3b. Not only that, but for reasons mysterious to me (and I'm a softy people, although I admit this is one of my mighty soapboxes), the New Frugal tends to believe that their kids shouldn't have to work through college or that they're incapable of doing so. Please. Please. Please. And did I say Puh-lease. The Old Frugal often didn't go to college themselves or they put themselves through later in life (as did my maternal grandparents). They may have wished to put their children through college. They may have been proud if they could do so. But they did not consider it their duty for exaltation in the hereafter to do so. Furthermore, the Old Frugal generally expected their children to help with the cause, and they certainly considered them capable of working a part-time job while maintaining passing (or better than passing) grades.
What's wrong with the New Frugal's idea?
If you're really hurting, then maybe your adult children could, like, manage a shift at McDonald's or something. And if you're not really hurting, then don't whine to me about it. Did I mention this is one of my soapboxes. It's a very tall soapbox. The part of the Yahoo article that bothered me the very very most was when Ms. Cone said that her oldest son has a job and is helping to pay for his education, but that her youngest son "hasn't been able to find employment." Huh? I mean, okay, I'm totally being judgmental here, and maybe there's some good reason for this, like that he's taking 40 credit hours or that he's missing some limbs or that he's married with a kid or whatever, but come on. I believe that he hasn't been able to find a job he really loves or that pays amazingly, but no job whatsoever for a young adult who's apparently smart enough to get into college. I'm not buying it. I see signs all over the place for crappy jobs that are the type of thing most of us worked when we were 18 or 19 and getting through school or life. They're not super fun. They don't pay super well. But they get us through and they teach us valuable life lessons and we learn to wake up when the alarm goes off. I did mention a soap box didn't I? My brother started off with a job in college where he worked as a janitor and had to start at 2:00am or something like that. And he probably got paid $7 or so an hour. And he was tired. And he got all or mostly A's and took plenty of credits too. It wasn't easy, but he did it. And eventually he got a more enjoyable job, though still nothing to sing about. And then he graduated and began living a real life and I don't think he'll regret that crappy job. So if you can't pay for your kids' college or just don't want to, then don't. Old Frugal wouldn't have.
4. The New Frugal goes out to eat, buys processed food, and entertains itself more than the Old Frugal ever did. Even when I was growing up (and it wasn't that long ago), our family went out to eat (at McDonald's mind you) maybe once a year. As a kid, my mom made all of our meals from scratch or nearly so. Even when I was a teenager and my father was a doctor, we didn't go out much--still only a few times a year and once or twice on vacation, and only to such upper crust establishments such as Bob Evans and the Waffle House. I only remember going to a few movies at theaters with my family.
What's wrong with a little entertainment?
Nothing if you can manage it. I just don't want to hear you whine about your very high cost of food. Also, there is--I believe--a cost in health when one eats out too much and buys too much processed food. Even we--in typical New Frugal fashion--go out to eat usually once and sometimes more a month and feel ourselves a little deprived. But just because everybody else is doing it more than you are doesn't mean you're living Old Frugal style.
There you have it, a brief and completely unscientific comparison of New Frugal versus Old Frugal. There are soapbox sections to be sure, but there are bits that humble me too.