100%. It also made me think about the feelings I've had when diets failed but I was able to pay off $25,000 in credit card debt. How come I could do one kind of "diet" but not the other? It used to drive me crazy. But now I realize -- I just got more money. That was the reason the financial diet "worked"
Also, I used to listen to a lot of Dave Ramsey and he is a bad person but also has some really, really terrible theology. His instance on calling the IRS "the KGB, I mean the IRS" and setting up the idea that contributing to a social safety net and infrastructure via paying taxes is some kind of affront to Christianity is such a fundamental misread of the Gospel. It's also a really shitty way to make sure that most of his listeners/followers continue to live in places with shittier than average outcomes in terms of health and education.
Ugh, this is all so upsetting! I'm frustrated with the anti-tax baseline that's so prevalent in personal finance — I did such a happy dance when Anne wrote her piece on taxes as paying for civilization 😁
God, this is so good. I’ve been advocating for increasing graduate student pay because we’re absolutely not being paid enough in light of inflation and rapidly rising rent costs, and so many people have come at me with “YoU jUsT nEeD tO bUdGeT.” This article absolutely nails it in terms of why the framework of individual financial responsibility is totally insufficient for addressing systemic issues.
This is so good! Dave Ramsey also has another element to his work--he literally baptizes it in the name of God, and churches buy his curriculum and hold workshops/groups (part of the reason he is so successful). So people have extra, religious, pressure to try and be “good” Christians who have no debt/live off of beans and rice--AND give 10% of their money to the church. I’ve talked to dozens (maybe hundreds?) of Christians who feel like complete failures when they can’t follow all of Dave’s rules. So they quietly suffer, convinced they are doing something horribly wrong in their spirituality to be in debt. It’s so, so toxic.
This makes me so sad! I know people in general feel a heavy personal failing when they don't follow whatever set of "rules" they've inherited about money, and I can't imagine the added weight of having that entangled with your spirituality and moral compass.
Excellent piece. I grew up a poor GenX, so my early experiences were just a little different. But that same attitude of, “You have to work hard to be just a little better than poor, or born rich” was prevalent in my house. At 50 (and now living in Canada), I would say we’re finally secure-ish. I’ve bought into a different style of budgeting, YNAB, which is not about deprivation or investing or getting rich. But we’re really only secure now because we have more money. It’s taken me a long time to undo earlier attitudes about how I’m poor because I deserve it. I was poor because of structural inequalities. I’m not poor now because I have access that I didn’t have before that has little to do with my personal decisions.
There were a few excellent podcasts recently on Hidden Brain (May 2, 9, 16, and 23) about money, history, our relationship (eww, I know) to money, etc. Highly recommend them.
I'm sorry for the earlier blame you felt about your finances, and I'm happy it sounds like you've been able to untangle that. Thanks for the podcast recs — will check those out!
As the CFO of the family and former Ramsey follower, this is one of the best articles I have read about finances. I grew up learning how to live paycheck to paycheck and, as the saying goes, "robbing Peter to Paul ." On rough paydays, I would tell my children that we skipped Peter and Paul and went straight to John. (lol) I always made a budget that never worked because I never made enough for the bare necessities. When Dave Ramsey popped into my life, two incomes flowed into the home, and of course, things were a little easier.
There are three things that I pass on to my kids and grandkids that I learned through my financial journey. Make a budget, income statement, whatever you want to call it but write down what you have coming in and what needs to go out. Make sure you have food, shelter, and lights, then do your best. Have an emergency fund (thanks, Dave). Just knowing you have that cushion relieves so much stress. And finally, have fun.
Emergency funds have saved us more than once, and we gifted our grandchildren a $500 emergency fund. No, I am not debt-free, but I live happily, have money in the bank, pay my bills, have food in the kitchen, gas in my car, and a savings account.
I had to chuckle when you drew the line between diet and budget cultures. Being debt-free is probably similar to me being skinny. Not going to happen. (LOL)
I love the lessons you're passing on! These are exactly my top three pieces of advice, too: I call the first step, getting your bearings, a money map: https://www.healthyrich.co/money-map I call my savings a comfort fund because of that stress-relieving effect — and because it makes it easier to make the decisions you need to have fun :)
So here's my question, and I'm serious about it. How rich am I allowed to be and still be a decent person and political lefty? How much of this stolen, unearned wealth am I allowed to hoard for my children, and how much do I need to give away?
I didn't grow up this way. I grew up working class in a wealthy suburb. So I know first-hand how much easier I have it. I know that this unearned wealth pays my $250/month copay for a medicine many need but don't have access to. I know my being educated and confident in my knowledge is what allows my neurodiverse daughter to be a leader at her unschool instead of a freak her public school. Oh and her $250/hour therapy, reimbursed by insurance at 60%, is also helping with that.
This is the year to make this decision. The stock market is tanking and so the amount of charitable donations that we and people like us can write off will be minimal to none. How much cash can we hoard? How much must we give away? Is there a calculation, like a retirement calculation, but it also includes a "don't be an a-hole while people are houseless" trigger?
yes, can very much relate to this - i have a neurodiverse child (11) who has been kept in a bubble his entire life because his dad and I have been corporate slaves and could pay for private schools, OT, Speech, PT (my son's costs are about $40k/year). But we don't know if he will be able to be independent when he grows up....so I plan to hoard as much as I can in the event that he isn't independent..or if he is and is not able to get a corp job with a good salary/insurance (most likely the case). I feel very strongly that I need to do this because there is no social safety net for children like my son. I have talked with another close mom friend whose son is in a similar situation and we have tossed around shared living ideas. Our children, right or wrong, will grow up with a certain lifestyle...should they be penalized when they grow up because society doesn't view supporting the neurodiverse population? And if he doesn't have money given to him, he will be on Medicaid...what does that look like? I have no idea so I just plan to try to leave him as much as I can so I can sleep at night.
After my experience with my son, I am in favor of paying more taxes to fund social programs (what those look like I am not sure) for people in our society who are on the "outside" of the "norm"
I don't have a great answer - wish I did! - but if you work for your money instead of your "money" working for you, then I'd say don't internalize guilt that actually belongs to the .1% who own like 40% of the wealth. You seem like you would vote for greater taxation which means you're all too willing to pay the real costs of a fairer world only our political misrepresentation won't offer that. I would - and do insofar as its available - vote for higher taxes and so I've allowed myself to downgrade my myriad guilts from "crippling" to, hopefully, functional.
Oh my money definitely works for me. We still need to pull in a salary right now, but my kids' education is already paid for. Retirement mostly already paid for. And we expect to inherit a couple million. Half of that was somewhat earned (business started by two uneducated men, one white, one Jewish, with a $10,000 loan from family) half stolen (ranch in California). We "made" $100,000 by selling a house we'd owned for 2 years.
I do feel guilt, but more than that I want the practical answer. The answer to guilt is action. When I reach the balance between hoarding for the safety of my grandchildren and giving to meet current survival needs, I think I'll feel ok. But you can't let rich people decide how rich they need to be in order to be safe. You just can't.
One thing I think about with the generational wealth question is whether I'd ever have enough to change another family's trajectory (in some scenarios, yes). Because in general I think that giving money to organizations promoting structural change is the way to go, but what if I had enough to, say, make it possible for someone to pay off their student loans or have a down payment for a house and start building generational wealth? And how would I weigh that possibility against that much money to the, you know, community organizing and workers' rights and voting rights and climate change groups I give to?
Your question of "what do I need and what my my children and grandchildren need" is simply a more detailed way of asking my original question of "How much of this stolen, unearned wealth am I allowed to hoard for my children, and how much do I need to give away?" So no, you are not suggesting it's the wrong way to frame it. You used the same frame, just with language you are more comfortable with. You hopped on my thread, presumed more knowledge about my wealth than me, and then reframed my idea and expressed it as something new. Respectfully, please read some Rebecca Solnit.
Wouldnʻt it be great if we had a society where none of us felt obligated to hoard for our children and grandchildren because we felt confident their needs would be met? I have spent a decade trying to find solutions for "affordable housing" in my community and only recently woke up to the fact that language frames the need as building financial literacy among young people so they can build wealth through home ownership rather than addressing the structural reasons why people in Hawaiʻi canʻt stay in the community of their ancestors. Sigh. Thanks for asking the question. I have no answers...but wish to remain in the inquiry
Thank you for this; I'm loving the discussion you're encouraging! This type of question is at the heart of the relationship with money for a lot of people, and mostly because there's no right answer. Our ongoing search for the answer fuels budget culture, which is all about finding the right set of rules. So much in our society needs to change so money isn't the difference between comfort and trauma for families like yours. Budget culture wants to treat money as an isolated part of our lives, but it's impossible to separate from the nuances of politics, policy, emotion, relationships, etc.
I think this is a question that more folks should actively contend with. It is very easy to say, "I work for my money, I vote for the right policies," and to thus abdicate any other (at least, many other) responsibilities to humanity. But I think that's a sort of limited conception of political action and one that we deploy mostly so we can feel comfortable with ourselves (I'm not necessarily advocating perpetual self-flagellation, but I do think we shouldn't let ourselves off too easily). I am a low-income, seasonal / contingent worker, so, for me, thinking about what I owe to other people (that is, financially) happens on an ad-hoc basis (and I don't really budget it). I have a number of charitable / activist causes that I donate to on a monthly basis. If I an unhoused person asks me for money, I give it to them. I have, at certain points in time, vaguely assumed that, when I had a more stable income, I'd make a point of giving away at least a third of that. But I think my calculus is less complex than yours, both because I have much less money (and even a "more stable income" for me is much less money that it sounds like you've got) and because I'm not planning to have kids.
In my lower-income life-which is how I was raised-reciprocity was huge. If each aunt and uncle gives the kid 10 bucks on their christening, the kid starts out with a couple hundred bucks! My parents didn’t hire babysitters, the parties always included kids. And kids were taught to go off by themselves and leave the adults alone for adult time. As I’ve ascended through the classes, my personal experience—and I’m talking about my friends and my husband—is that the more money you were born with the less value is placed in reciprocity. I don’t think the American dream is out in your own home anymore, I think it’s not needing to rely on friends/family for anything. Being able to pay for any service you may need . Of course that’s a massive massive generalization and I can give you exceptions everywhere I look but broadly speaking, that has been my experience.
Yeah, that broadly correlates with my anecdotal experience, too. I also think a lot of middle class folks in the US feel so precarious (particular in the past ten or fifteen years, and certainly with some reason) that reciprocity -- particularly when conceived in terms like the above, e.g., that paying taxes = sharing privilege -- has really been devalued. But I do acknowledge that these things are just easier for me to say / feel when I'm not really taking care of anyone besides myself and the occasional cat.
I have chosen to live in a small town where most people my age grew up in self-sufficient sugar plantation camps. Even today, there is much of the reciprocity culture you describe. But with the influx of newcomers who do not appreciate the values, and the fact that young people are priced out of living here, I worry that the next generation will be about the value of individual reliance rather than community self-sufficiency.
Yes, it sounds like we don't have quite as much money as you but enough - an investment property, working on college savings for a kid in elementary school, if we stopped saving for retirement now we'd be fine. But I think my anxiety comes because even with a million dollars you know that nobody is coming to help you with college and retirement and starting your kid off in the world, so how much is ever enough?
I have in mind a figure of 1% of income to charity but I'm not sure where I heard it. That's my personal basis point for how much money I give per year in organised giving, at least.
One of the claims used to back these "budget your way out of poverty" arguments that make me the angriest is the claim that rich people don't spend a lot of money. That the supposed frugality of rich people shows that it can work for you, too.
I mean. Who can look at the world around us and believe that? How many people out there are famous basically for being rich and spending their money in ways that make for good glossy magazine coverage?
But even short of that level of wealth, is that *really* reflected in what anyone sees in the people around them? And to the extent that people kinda sorta believe it, how much of the ability to pretend this is the case is that certain kinds of high-end spending are not fully visible to people who don't have the money to spend on those things?
It is 100% easier to eat cheaply now that I am paid well and have a car vs when I was in grad school. I have gotten into many debates with coworkers who think it should be easy to feed a family on the food stamps budget. Yes, big containers of rice and beans are cheap at Costco or Walmart but that assumes a car, time to drive there, a suitable place and equipment to cook + store food and time to cook. And that doesn't even touch other issues such as dietary restrictions, disabilities, food deserts, feeding fussy kids, and maintaining some variety. The wealthy people eating super cheaply are supplementing it with some combination of meals out or paid for by their employer, fresh fruit and vegetables, and possibly one household member working fewer hours outside the home.
Thank you for bringing up all of these variables! These are exactly the kind of real-life nuances we don't talk about enough in personal finance media, and ignoring renders a lot of advice useless (at best, condescending at worst).
And holding rich people up as an example of the right way to do things assumes they've reached some end goal the rest of us are invariably trying to achieve, which is a fallacy.
Yes! Totally agree with this! And it’s another diet culture parallel. The people getting rich off selling diets and workouts are people who are either naturally smaller bodied or they're the part of that absolutely miniscule (1–5%) of people who can lose a significant amount of weight and keep it off for a meaningful period of time. So it is with the rags-to-riches stories or the “rich people are rich because they're careful with their money” fantasies that are everywhere.
So many of the experts we listen to are perfect example of the saying “born on third base, thinking you hit a triple.” There's no room for nuanced experiences or an understanding of how the same things that come easily to some people are blocked by insurmountable barriers for others.
I used to teach financial literacy classes at the college level and I loved teaching it (teaching those classes was where I discovered Elizabeth Warren and I think A LOT of her financial writing still stands up, especially her stuff about how the credit card industry really works. The Frontline documentary The Secret History of the Credit Card was always a hit in my class.) I stopped teaching partially because I realized there was no scholarly evidence to support the fact that taking the kinds of financial literacy classes offered in high schools and colleges actually resulted in better outcomes for the students. So much financial literacy curriculum in schools ignores the realities of structural inequalities AND assumes that people make "rational" choices with money (and thus ignores behavioral economics of how people really spend money, especially people who have experienced poverty).
YES! Warren's money books are on my list, and I'll add The Secret History of the Credit Card doc, too :) I have the same concern with financial education and want to do it differently with Healthy Rich. Earning my CEPF, I was really frustrated with how one-dimensional my own education was, and I couldn't imagine walking into a classroom with that budget worksheet and information about "responsible" credit card use, etc.
Budgeting never made sense to me because how do you just create money that you don’t have from budgeting...you can’t get blood from a stone!
When I was unemployed I didn’t budget because I tried to spend as little as possible. No way to avoid debt because there wasn’t anything coming in. Now that I have a high income after many years of working and being afraid of being broke and unemployed again, I also don’t budget, because I don’t have any debt and don’t need to spend under a certain amount (I guess I’m just not also a spender after the early years of student living and scarcity)
The budget is not the problem, the problem is usually not making enough money to meet your basic needs. If you do make enough to meet your needs but spend too much then you need this kind of help but that is a much easier problem to deal with.
A very good point. I also completely ignored budgeting advice when I was earning so little.
I also don't think budgeting is the solution for people earning more — almost 20% of people earning more than $100,000 a year (around twice the median in the U.S.) live paycheck-to-paycheck. Money management might control that, but it doesn't address the circumstances that create a relationship with money that drives spending to your maximum capacity, and those issues could be systemic or personal.
This was timely for me. I see the weight I gained over the past two years and the debt I've incurred in the same time period as both quantifiable measures of my stress. My husband and I make really good money and we have everything we need, but I've been deeply depressed for over a year. The pandemic, working full time with unreliable child care, a big move, job stress, and the compounding impact of realizing I was gaining weight because I was too stressed (stressed about being stressed).
How did I address my crushing anxiety about the world? So many recurring donations to different charities. How did I address my kids being rejected by the kids at the new school? I bought them new clothes, took them on MULTIPLE really fun vacations so we could relax and escape the pressure of the new environment, signed them up for art classes so they could express themselves through art, underwrote every new sport or activity they might want to try, and paid to renovate our basement so they'd have loads of space to goof around inside our house when COVID isolated us at home. How did I address my marriage feeling strained? I took my husband and I on trips. How did I boost my own mood? I bought original art and any house plant or book I wanted and multiple pieces of original jewelry that "spoke" to me. How did I comfort myself when all of my clothes got tight? I ordered more clothes that fit. How did I respond to guilt that I was losing touch with loved ones who were far away? I booked trips to visit them, sent them nice presents. How did I deal with my skin looking sallow and lackluster? Facials, obviously, and SKINCEUTICALS. I just "threw money at the problem."
I would say, like food, that it's hard to get back into balance when you're overdoing it because you have to eat, and you have to spend money. With any other addictive/comfort behavior (gambling, substances) the goal can be ZERO. Not so with food or spending. But now every single thing I have to ask myself, Is this OK? Is this banana OK? Is this $10 tradescatia OK? These should be simple answers, but I've lost credibility with myself regarding what's good for me.
Over the last few weeks I've looked at how much consumer debt we've accrued and tried to figure out how I could have done this to us, after 10 years of marriage with NO consumer debt other than our mortgage. Then I looked at the number differently, as a measure of our collective sorrow. It brings me some compassion for myself, but I'm still frightened about how I'll unbury us from debt (and my organs from visceral fat).
I have enough savings to pay off the credit card debt in full, but if I do that I'll only have $5000 left in savings, which seems like a dangerous move. I haven't talked to my husband about it, or our financial advisor, because I feel so much shame.
Thanks for sharing so openly and vulnerably - sending a ton of compassion your way. When I worked in Switzerland for a few months, I would come home at the weekend and binge on food and Game of Thrones episodes - the stress will do that to you!
My husband and I got debt free - out of a LOT of debt - using Dave Ramsey’s methods. I HATE Dave’s political views and agree he is unrealistic and draconian about many things. Most of his advice beyond “the snowball method” is not feasible for most people (such as getting a 15-yr mortgage equivalent to 25% of your take-home pay). It would’ve taken me forever to get debt-free being single; the ability to live on one of our two incomes and cut our budget to the bone is what saved us. And I got into debt because my salary was very low in my 20s and I had little margin for error in my life. I do acknowledge that I spent too much on going out for happy hours, although those outings forged connections that led to higher-paying jobs. Many of those connections are still clients today. So while it’s helpful too look at your spending, giving up beer and cutting all the joy out of your life isn’t enough to solve our larger low pay/high cost of living equation.
I detest the term “wealth management”. TV ads for wealth management businesses appear most often with sports events. The message seems to be “if you like golf (or tennis or horse racing), you must have wealth”. It always makes me feel guilty for enjoying these sports because I’m not part of the in-crowd with wealth. And I shudder to think of how the message is viewed by people living in countries less wealthy than the US.
Most of my working life I’ve blamed myself for not having the money my sister has. “She got the money-making gene” I joke. Only now, with this article, do I remember that early in her career, she worked for a big national corporation that partially paid her with stock options. I was self-employed or worked for small local governments - no stock options in my world. Now I’m seeing that I’m not “bad with money”: I chose work that, above all, served my personal values rather than my credit score. What a relief.
Would love to see this. I have really complicated thoughts about it all. On the one hand I appreciate the push to rethink mindless consumerism, which kind of jives with my environmental side. The mindset also helped me to pay off my student loans and think about saving for retirement early, when we had two incomes and no kids. Coming from a house with a super financially irresponsible parent I appreciated the framework. But at some point it starts to feel icky to me... when millionaires are still optimizing their taxes aggressively, for example. Or when it seems like "retirement" is actually building a business selling advice to other people (Paula Pant, who I still kind of enjoy).
This all makes me miss reading the Billfold and 'how people do money', and the piece that really velcroed itself to my brain; 'The Story of a Fuck-off Fund'.
But ... the thing that really helped me knock out my $35k in student loans (from a state school, after going to community college!) and build savings was a 1-2 punch of getting a $17k raise over the course of a year -- and then pandemic pulling a lot of bills lower with WFH and no commute. I couldn't budget my way to cracking those student loans or building any kind of e-fund when I started working at $11 something an hour as a baby copy editor -- but, breaking past $60k with that fat raise, 14 years after graduation and in a MUCH better job location? Yup. And surprise! I'm way less stressed now that I don't have to cobble together life solutions and fret about not packing a sad desk lunch when I'm already exhausted.
There's that meme with the dude saying 'The rent is too damn high.' It's true. But what also needs to be there is 'The wages are too damn low'!
Whoa, drawing the connection between diet culture and budget culture just blew my mind.
100%. It also made me think about the feelings I've had when diets failed but I was able to pay off $25,000 in credit card debt. How come I could do one kind of "diet" but not the other? It used to drive me crazy. But now I realize -- I just got more money. That was the reason the financial diet "worked"
Totally. When I read the term “budget culture” it was like a new puzzle piece clicking into place in my brain.
Right!?
Also, I used to listen to a lot of Dave Ramsey and he is a bad person but also has some really, really terrible theology. His instance on calling the IRS "the KGB, I mean the IRS" and setting up the idea that contributing to a social safety net and infrastructure via paying taxes is some kind of affront to Christianity is such a fundamental misread of the Gospel. It's also a really shitty way to make sure that most of his listeners/followers continue to live in places with shittier than average outcomes in terms of health and education.
Ugh, this is all so upsetting! I'm frustrated with the anti-tax baseline that's so prevalent in personal finance — I did such a happy dance when Anne wrote her piece on taxes as paying for civilization 😁
God, this is so good. I’ve been advocating for increasing graduate student pay because we’re absolutely not being paid enough in light of inflation and rapidly rising rent costs, and so many people have come at me with “YoU jUsT nEeD tO bUdGeT.” This article absolutely nails it in terms of why the framework of individual financial responsibility is totally insufficient for addressing systemic issues.
This is so good! Dave Ramsey also has another element to his work--he literally baptizes it in the name of God, and churches buy his curriculum and hold workshops/groups (part of the reason he is so successful). So people have extra, religious, pressure to try and be “good” Christians who have no debt/live off of beans and rice--AND give 10% of their money to the church. I’ve talked to dozens (maybe hundreds?) of Christians who feel like complete failures when they can’t follow all of Dave’s rules. So they quietly suffer, convinced they are doing something horribly wrong in their spirituality to be in debt. It’s so, so toxic.
This makes me so sad! I know people in general feel a heavy personal failing when they don't follow whatever set of "rules" they've inherited about money, and I can't imagine the added weight of having that entangled with your spirituality and moral compass.
Excellent piece. I grew up a poor GenX, so my early experiences were just a little different. But that same attitude of, “You have to work hard to be just a little better than poor, or born rich” was prevalent in my house. At 50 (and now living in Canada), I would say we’re finally secure-ish. I’ve bought into a different style of budgeting, YNAB, which is not about deprivation or investing or getting rich. But we’re really only secure now because we have more money. It’s taken me a long time to undo earlier attitudes about how I’m poor because I deserve it. I was poor because of structural inequalities. I’m not poor now because I have access that I didn’t have before that has little to do with my personal decisions.
There were a few excellent podcasts recently on Hidden Brain (May 2, 9, 16, and 23) about money, history, our relationship (eww, I know) to money, etc. Highly recommend them.
I'm sorry for the earlier blame you felt about your finances, and I'm happy it sounds like you've been able to untangle that. Thanks for the podcast recs — will check those out!
As the CFO of the family and former Ramsey follower, this is one of the best articles I have read about finances. I grew up learning how to live paycheck to paycheck and, as the saying goes, "robbing Peter to Paul ." On rough paydays, I would tell my children that we skipped Peter and Paul and went straight to John. (lol) I always made a budget that never worked because I never made enough for the bare necessities. When Dave Ramsey popped into my life, two incomes flowed into the home, and of course, things were a little easier.
There are three things that I pass on to my kids and grandkids that I learned through my financial journey. Make a budget, income statement, whatever you want to call it but write down what you have coming in and what needs to go out. Make sure you have food, shelter, and lights, then do your best. Have an emergency fund (thanks, Dave). Just knowing you have that cushion relieves so much stress. And finally, have fun.
Emergency funds have saved us more than once, and we gifted our grandchildren a $500 emergency fund. No, I am not debt-free, but I live happily, have money in the bank, pay my bills, have food in the kitchen, gas in my car, and a savings account.
I had to chuckle when you drew the line between diet and budget cultures. Being debt-free is probably similar to me being skinny. Not going to happen. (LOL)
I love the lessons you're passing on! These are exactly my top three pieces of advice, too: I call the first step, getting your bearings, a money map: https://www.healthyrich.co/money-map I call my savings a comfort fund because of that stress-relieving effect — and because it makes it easier to make the decisions you need to have fun :)
So here's my question, and I'm serious about it. How rich am I allowed to be and still be a decent person and political lefty? How much of this stolen, unearned wealth am I allowed to hoard for my children, and how much do I need to give away?
I didn't grow up this way. I grew up working class in a wealthy suburb. So I know first-hand how much easier I have it. I know that this unearned wealth pays my $250/month copay for a medicine many need but don't have access to. I know my being educated and confident in my knowledge is what allows my neurodiverse daughter to be a leader at her unschool instead of a freak her public school. Oh and her $250/hour therapy, reimbursed by insurance at 60%, is also helping with that.
This is the year to make this decision. The stock market is tanking and so the amount of charitable donations that we and people like us can write off will be minimal to none. How much cash can we hoard? How much must we give away? Is there a calculation, like a retirement calculation, but it also includes a "don't be an a-hole while people are houseless" trigger?
yes, can very much relate to this - i have a neurodiverse child (11) who has been kept in a bubble his entire life because his dad and I have been corporate slaves and could pay for private schools, OT, Speech, PT (my son's costs are about $40k/year). But we don't know if he will be able to be independent when he grows up....so I plan to hoard as much as I can in the event that he isn't independent..or if he is and is not able to get a corp job with a good salary/insurance (most likely the case). I feel very strongly that I need to do this because there is no social safety net for children like my son. I have talked with another close mom friend whose son is in a similar situation and we have tossed around shared living ideas. Our children, right or wrong, will grow up with a certain lifestyle...should they be penalized when they grow up because society doesn't view supporting the neurodiverse population? And if he doesn't have money given to him, he will be on Medicaid...what does that look like? I have no idea so I just plan to try to leave him as much as I can so I can sleep at night.
After my experience with my son, I am in favor of paying more taxes to fund social programs (what those look like I am not sure) for people in our society who are on the "outside" of the "norm"
I don't have a great answer - wish I did! - but if you work for your money instead of your "money" working for you, then I'd say don't internalize guilt that actually belongs to the .1% who own like 40% of the wealth. You seem like you would vote for greater taxation which means you're all too willing to pay the real costs of a fairer world only our political misrepresentation won't offer that. I would - and do insofar as its available - vote for higher taxes and so I've allowed myself to downgrade my myriad guilts from "crippling" to, hopefully, functional.
Oh my money definitely works for me. We still need to pull in a salary right now, but my kids' education is already paid for. Retirement mostly already paid for. And we expect to inherit a couple million. Half of that was somewhat earned (business started by two uneducated men, one white, one Jewish, with a $10,000 loan from family) half stolen (ranch in California). We "made" $100,000 by selling a house we'd owned for 2 years.
I do feel guilt, but more than that I want the practical answer. The answer to guilt is action. When I reach the balance between hoarding for the safety of my grandchildren and giving to meet current survival needs, I think I'll feel ok. But you can't let rich people decide how rich they need to be in order to be safe. You just can't.
One thing I think about with the generational wealth question is whether I'd ever have enough to change another family's trajectory (in some scenarios, yes). Because in general I think that giving money to organizations promoting structural change is the way to go, but what if I had enough to, say, make it possible for someone to pay off their student loans or have a down payment for a house and start building generational wealth? And how would I weigh that possibility against that much money to the, you know, community organizing and workers' rights and voting rights and climate change groups I give to?
Or having enough to feel safe to buy somebody a house and pay their taxes for 100 years. That's my goal.
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Your question of "what do I need and what my my children and grandchildren need" is simply a more detailed way of asking my original question of "How much of this stolen, unearned wealth am I allowed to hoard for my children, and how much do I need to give away?" So no, you are not suggesting it's the wrong way to frame it. You used the same frame, just with language you are more comfortable with. You hopped on my thread, presumed more knowledge about my wealth than me, and then reframed my idea and expressed it as something new. Respectfully, please read some Rebecca Solnit.
Wouldnʻt it be great if we had a society where none of us felt obligated to hoard for our children and grandchildren because we felt confident their needs would be met? I have spent a decade trying to find solutions for "affordable housing" in my community and only recently woke up to the fact that language frames the need as building financial literacy among young people so they can build wealth through home ownership rather than addressing the structural reasons why people in Hawaiʻi canʻt stay in the community of their ancestors. Sigh. Thanks for asking the question. I have no answers...but wish to remain in the inquiry
Thank you for this; I'm loving the discussion you're encouraging! This type of question is at the heart of the relationship with money for a lot of people, and mostly because there's no right answer. Our ongoing search for the answer fuels budget culture, which is all about finding the right set of rules. So much in our society needs to change so money isn't the difference between comfort and trauma for families like yours. Budget culture wants to treat money as an isolated part of our lives, but it's impossible to separate from the nuances of politics, policy, emotion, relationships, etc.
I think this is a question that more folks should actively contend with. It is very easy to say, "I work for my money, I vote for the right policies," and to thus abdicate any other (at least, many other) responsibilities to humanity. But I think that's a sort of limited conception of political action and one that we deploy mostly so we can feel comfortable with ourselves (I'm not necessarily advocating perpetual self-flagellation, but I do think we shouldn't let ourselves off too easily). I am a low-income, seasonal / contingent worker, so, for me, thinking about what I owe to other people (that is, financially) happens on an ad-hoc basis (and I don't really budget it). I have a number of charitable / activist causes that I donate to on a monthly basis. If I an unhoused person asks me for money, I give it to them. I have, at certain points in time, vaguely assumed that, when I had a more stable income, I'd make a point of giving away at least a third of that. But I think my calculus is less complex than yours, both because I have much less money (and even a "more stable income" for me is much less money that it sounds like you've got) and because I'm not planning to have kids.
In my lower-income life-which is how I was raised-reciprocity was huge. If each aunt and uncle gives the kid 10 bucks on their christening, the kid starts out with a couple hundred bucks! My parents didn’t hire babysitters, the parties always included kids. And kids were taught to go off by themselves and leave the adults alone for adult time. As I’ve ascended through the classes, my personal experience—and I’m talking about my friends and my husband—is that the more money you were born with the less value is placed in reciprocity. I don’t think the American dream is out in your own home anymore, I think it’s not needing to rely on friends/family for anything. Being able to pay for any service you may need . Of course that’s a massive massive generalization and I can give you exceptions everywhere I look but broadly speaking, that has been my experience.
Yeah, that broadly correlates with my anecdotal experience, too. I also think a lot of middle class folks in the US feel so precarious (particular in the past ten or fifteen years, and certainly with some reason) that reciprocity -- particularly when conceived in terms like the above, e.g., that paying taxes = sharing privilege -- has really been devalued. But I do acknowledge that these things are just easier for me to say / feel when I'm not really taking care of anyone besides myself and the occasional cat.
I have chosen to live in a small town where most people my age grew up in self-sufficient sugar plantation camps. Even today, there is much of the reciprocity culture you describe. But with the influx of newcomers who do not appreciate the values, and the fact that young people are priced out of living here, I worry that the next generation will be about the value of individual reliance rather than community self-sufficiency.
Yes, it sounds like we don't have quite as much money as you but enough - an investment property, working on college savings for a kid in elementary school, if we stopped saving for retirement now we'd be fine. But I think my anxiety comes because even with a million dollars you know that nobody is coming to help you with college and retirement and starting your kid off in the world, so how much is ever enough?
I have in mind a figure of 1% of income to charity but I'm not sure where I heard it. That's my personal basis point for how much money I give per year in organised giving, at least.
Setting a number for yourself to follow can release a ton of decision-making stress in this area!
One of the claims used to back these "budget your way out of poverty" arguments that make me the angriest is the claim that rich people don't spend a lot of money. That the supposed frugality of rich people shows that it can work for you, too.
I mean. Who can look at the world around us and believe that? How many people out there are famous basically for being rich and spending their money in ways that make for good glossy magazine coverage?
But even short of that level of wealth, is that *really* reflected in what anyone sees in the people around them? And to the extent that people kinda sorta believe it, how much of the ability to pretend this is the case is that certain kinds of high-end spending are not fully visible to people who don't have the money to spend on those things?
It is 100% easier to eat cheaply now that I am paid well and have a car vs when I was in grad school. I have gotten into many debates with coworkers who think it should be easy to feed a family on the food stamps budget. Yes, big containers of rice and beans are cheap at Costco or Walmart but that assumes a car, time to drive there, a suitable place and equipment to cook + store food and time to cook. And that doesn't even touch other issues such as dietary restrictions, disabilities, food deserts, feeding fussy kids, and maintaining some variety. The wealthy people eating super cheaply are supplementing it with some combination of meals out or paid for by their employer, fresh fruit and vegetables, and possibly one household member working fewer hours outside the home.
Thank you for bringing up all of these variables! These are exactly the kind of real-life nuances we don't talk about enough in personal finance media, and ignoring renders a lot of advice useless (at best, condescending at worst).
And holding rich people up as an example of the right way to do things assumes they've reached some end goal the rest of us are invariably trying to achieve, which is a fallacy.
Yes! Totally agree with this! And it’s another diet culture parallel. The people getting rich off selling diets and workouts are people who are either naturally smaller bodied or they're the part of that absolutely miniscule (1–5%) of people who can lose a significant amount of weight and keep it off for a meaningful period of time. So it is with the rags-to-riches stories or the “rich people are rich because they're careful with their money” fantasies that are everywhere.
So many of the experts we listen to are perfect example of the saying “born on third base, thinking you hit a triple.” There's no room for nuanced experiences or an understanding of how the same things that come easily to some people are blocked by insurmountable barriers for others.
I used to teach financial literacy classes at the college level and I loved teaching it (teaching those classes was where I discovered Elizabeth Warren and I think A LOT of her financial writing still stands up, especially her stuff about how the credit card industry really works. The Frontline documentary The Secret History of the Credit Card was always a hit in my class.) I stopped teaching partially because I realized there was no scholarly evidence to support the fact that taking the kinds of financial literacy classes offered in high schools and colleges actually resulted in better outcomes for the students. So much financial literacy curriculum in schools ignores the realities of structural inequalities AND assumes that people make "rational" choices with money (and thus ignores behavioral economics of how people really spend money, especially people who have experienced poverty).
YES! Warren's money books are on my list, and I'll add The Secret History of the Credit Card doc, too :) I have the same concern with financial education and want to do it differently with Healthy Rich. Earning my CEPF, I was really frustrated with how one-dimensional my own education was, and I couldn't imagine walking into a classroom with that budget worksheet and information about "responsible" credit card use, etc.
Budgeting never made sense to me because how do you just create money that you don’t have from budgeting...you can’t get blood from a stone!
When I was unemployed I didn’t budget because I tried to spend as little as possible. No way to avoid debt because there wasn’t anything coming in. Now that I have a high income after many years of working and being afraid of being broke and unemployed again, I also don’t budget, because I don’t have any debt and don’t need to spend under a certain amount (I guess I’m just not also a spender after the early years of student living and scarcity)
The budget is not the problem, the problem is usually not making enough money to meet your basic needs. If you do make enough to meet your needs but spend too much then you need this kind of help but that is a much easier problem to deal with.
A very good point. I also completely ignored budgeting advice when I was earning so little.
I also don't think budgeting is the solution for people earning more — almost 20% of people earning more than $100,000 a year (around twice the median in the U.S.) live paycheck-to-paycheck. Money management might control that, but it doesn't address the circumstances that create a relationship with money that drives spending to your maximum capacity, and those issues could be systemic or personal.
I think the big problem here is our collective willingness to equate personal virtues with personal wealth.
While I logically know it’s not true, when I am broke I feel worthless. It’s very hard to convince my mind otherwise.
This was timely for me. I see the weight I gained over the past two years and the debt I've incurred in the same time period as both quantifiable measures of my stress. My husband and I make really good money and we have everything we need, but I've been deeply depressed for over a year. The pandemic, working full time with unreliable child care, a big move, job stress, and the compounding impact of realizing I was gaining weight because I was too stressed (stressed about being stressed).
How did I address my crushing anxiety about the world? So many recurring donations to different charities. How did I address my kids being rejected by the kids at the new school? I bought them new clothes, took them on MULTIPLE really fun vacations so we could relax and escape the pressure of the new environment, signed them up for art classes so they could express themselves through art, underwrote every new sport or activity they might want to try, and paid to renovate our basement so they'd have loads of space to goof around inside our house when COVID isolated us at home. How did I address my marriage feeling strained? I took my husband and I on trips. How did I boost my own mood? I bought original art and any house plant or book I wanted and multiple pieces of original jewelry that "spoke" to me. How did I comfort myself when all of my clothes got tight? I ordered more clothes that fit. How did I respond to guilt that I was losing touch with loved ones who were far away? I booked trips to visit them, sent them nice presents. How did I deal with my skin looking sallow and lackluster? Facials, obviously, and SKINCEUTICALS. I just "threw money at the problem."
I would say, like food, that it's hard to get back into balance when you're overdoing it because you have to eat, and you have to spend money. With any other addictive/comfort behavior (gambling, substances) the goal can be ZERO. Not so with food or spending. But now every single thing I have to ask myself, Is this OK? Is this banana OK? Is this $10 tradescatia OK? These should be simple answers, but I've lost credibility with myself regarding what's good for me.
Over the last few weeks I've looked at how much consumer debt we've accrued and tried to figure out how I could have done this to us, after 10 years of marriage with NO consumer debt other than our mortgage. Then I looked at the number differently, as a measure of our collective sorrow. It brings me some compassion for myself, but I'm still frightened about how I'll unbury us from debt (and my organs from visceral fat).
I have enough savings to pay off the credit card debt in full, but if I do that I'll only have $5000 left in savings, which seems like a dangerous move. I haven't talked to my husband about it, or our financial advisor, because I feel so much shame.
Thanks for sharing so openly and vulnerably - sending a ton of compassion your way. When I worked in Switzerland for a few months, I would come home at the weekend and binge on food and Game of Thrones episodes - the stress will do that to you!
My husband and I got debt free - out of a LOT of debt - using Dave Ramsey’s methods. I HATE Dave’s political views and agree he is unrealistic and draconian about many things. Most of his advice beyond “the snowball method” is not feasible for most people (such as getting a 15-yr mortgage equivalent to 25% of your take-home pay). It would’ve taken me forever to get debt-free being single; the ability to live on one of our two incomes and cut our budget to the bone is what saved us. And I got into debt because my salary was very low in my 20s and I had little margin for error in my life. I do acknowledge that I spent too much on going out for happy hours, although those outings forged connections that led to higher-paying jobs. Many of those connections are still clients today. So while it’s helpful too look at your spending, giving up beer and cutting all the joy out of your life isn’t enough to solve our larger low pay/high cost of living equation.
"little margin for error" is such a perfect way to describe financial precarity for so many people!
I detest the term “wealth management”. TV ads for wealth management businesses appear most often with sports events. The message seems to be “if you like golf (or tennis or horse racing), you must have wealth”. It always makes me feel guilty for enjoying these sports because I’m not part of the in-crowd with wealth. And I shudder to think of how the message is viewed by people living in countries less wealthy than the US.
Most of my working life I’ve blamed myself for not having the money my sister has. “She got the money-making gene” I joke. Only now, with this article, do I remember that early in her career, she worked for a big national corporation that partially paid her with stock options. I was self-employed or worked for small local governments - no stock options in my world. Now I’m seeing that I’m not “bad with money”: I chose work that, above all, served my personal values rather than my credit score. What a relief.
You are absolutely not bad with money. I'm so glad you see that, and thank you for choosing the work you have!
Can you do a piece on Mr. Money Mustache next? Please? Pretty please?
Second this! Or a piece on the FIRE (financial independence, retire early) movement as a whole.
Would love to see this. I have really complicated thoughts about it all. On the one hand I appreciate the push to rethink mindless consumerism, which kind of jives with my environmental side. The mindset also helped me to pay off my student loans and think about saving for retirement early, when we had two incomes and no kids. Coming from a house with a super financially irresponsible parent I appreciated the framework. But at some point it starts to feel icky to me... when millionaires are still optimizing their taxes aggressively, for example. Or when it seems like "retirement" is actually building a business selling advice to other people (Paula Pant, who I still kind of enjoy).
I totally agree with you!! All of this
I would also be very interested in this!
This all makes me miss reading the Billfold and 'how people do money', and the piece that really velcroed itself to my brain; 'The Story of a Fuck-off Fund'.
But ... the thing that really helped me knock out my $35k in student loans (from a state school, after going to community college!) and build savings was a 1-2 punch of getting a $17k raise over the course of a year -- and then pandemic pulling a lot of bills lower with WFH and no commute. I couldn't budget my way to cracking those student loans or building any kind of e-fund when I started working at $11 something an hour as a baby copy editor -- but, breaking past $60k with that fat raise, 14 years after graduation and in a MUCH better job location? Yup. And surprise! I'm way less stressed now that I don't have to cobble together life solutions and fret about not packing a sad desk lunch when I'm already exhausted.
There's that meme with the dude saying 'The rent is too damn high.' It's true. But what also needs to be there is 'The wages are too damn low'!