Tuesday, October 6, 2015

An untitled update and some random musings on financial sustainability

As usual, the High Holidays and Sukkot passed in a whirlwind of cooking, making arrangements, hosting, packing, going over for weekends, weekdays, days all jumbled together... and me, in the middle of it all, always doing more than I thought I possibly could, and probably less than I ought. The children always staying up far too late, the days each unique in its own way - some nice and relaxed, some hectic and intense. And family. Lots and lots of relatives, more than making up for the summer months we have spent mostly asunder.

I've often wished to blog, sometimes about this and sometimes about that, and of course never got around to squeezing in even a small update.

Of course, holidays also mean expenses - there's extra food, usually some new clothes, extra usage of electricity (air conditioning for guests, laundry, etc), and there's often some traveling thrown in as well. It isn't accidental that many charity organizations kick into action just before Rosh HaShana. So I've been often thinking of poverty; its standards, and definition, and practical implications. And the conclusion I've come to is that it's not just what you have - more than that, probably a lot more, is what you do with what you have. 

Take two families, both consisting of two couples with three children aged 6, 4 and 2. Both families make an X sum each month. Family A has scrimped and saved in past years and bought a house, small by usual standards, and a little out of the way, but they contrived to use the space to the best possible advantage. They therefore pay no rent or mortgage. They grow part of their own food and use a once-a-month-shopping plan which works well for them. They know where to find used clothes, furniture and books in good condition. They are creative in their vacations (exploring the area around their home) and in their home decoration (they aren't squeamish about collecting things from dumps and giving them a new life). They homeschool and so pay zero for childcare, nannies, summer camps, etc. 

Family B isn't extravagant. They don't go abroad, for instance. They do, however, go on vacation once a year, usually for a very good deal. It still costs a lot, though. More importantly, they pay rent, which takes about 1\3 of their monthly income, though it's only an average apartment in an average neighborhood. Or perhaps they have a mortgage on bad terms. They dream of having their own home someday, and they are trying to save from the remaining 2\3 of their income, but it's going slow and they know it's pretty hopeless. They have two cars and can't possibly do without one. 

One day, family B begins to get creative and re-prioritize. They decide that a two-bedroom apartment is enough for them after all. They move to a cheaper place, with longer commute, and resolve to make the most of their time on the road, audio-learning in their car or reading on the train. They don't entirely give up the second car, but they use it less. The home of their dreams changes, too. They lean towards a smaller fixer-upper they would be able to purchase in the foreseeable future, and perhaps renovate and add a room later. They feel good about themselves and their life.

Family C, perhaps, is in the same position as family B, but they aren't able to make the necessary changes to live within their means. It's for no fault of their own. They had optimistically taken a large mortgage when it looked perfectly reasonable to do so, but then one of the spouses fully or partially lost their ability to work. Or perhaps they are under such strain that there just isn't enough time or mental energy to stop and think how they could change things. This is where the real financial downfall begins - the inability to manage with what you have.

This is why I object to arbitrary poverty lines. It would be more complicated, but also more truthful, to find out how well the family is managing on what they have. 


Lady Anne said...

My parents lived through the Great Depression, and then WWII. My mum used to embarrass me no end when she would pack my school sandwiches in the bags from cereal boxes - and expect me to bring them home to reuse! - but she could make a dime go where other people needed a dollar. I have to admit that if I hadn't been raised that way, The Squire and I wouldn't be where we are today. A lot of people don't know the difference between what they want and what they actually need.

Anonymous said...

I agree, poverty can mean vastly different things to different people, and be experienced differently depending on expectations and circumstances.
I live in the US, and it recently came to my attention that people on Welfare were expected to manage on a paltry $4 per person per day for food. That sounded rather inhumane, until I became curious to see what that would make my weekly grocery budget.
Our family consists of two parents, two teenaged boys, and three younger girls. Seven people, seven days, $4 per day... $196 per week.
A couple of years ago we were able to increase our weekly grocery budget from $150 a week to a luxurious $190, and I was very grateful. Three or so years with teenagers on $150 a week was challenging to me, but might seem generous to someone else. I was stunned that my current luxurious budget is actually less than the "paltry" amount given to those on Welfare. It's more complicated than arbitrary lines, as you say.