| title | layout | description | copyright | date |
|---|---|---|---|---|
Money, Money, Money |
default |
A few thoughts on how views of money change |
copyright © 2024 Jeff Gabriel |
2024-02-10 14:28:00 -0500 |
The ideas for this post have been clanging around in my head for some time. It has nothing to do with software, I just needed to write it down to stop the clanging. I suppose it really goes back to an old nightime news segment (I cannot recall nor find the episode) that explored how people at all levels of income feel like they're right on the edge of what they want to make. No one feels rich, and everyone has a little bit of envy of the 'next' level of income. The family making $50k is fearful of college expenses and being able to retire jeans with holes in them. The family at $1M fears next year's club dues, and declares the embarrasment of wearing 'off the shelf' clothes shipped from LL Bean.
I have had the opportunity to live at many different income levels. From college student living on my own with the few hourly dollars I could earn after class, to an executive salary after the kids have left the house. I noted at each level of income, I too would feel like I was only just making it. It's an odd experience that seems to creep up on you. At the same time, I have made a point of reading about, and spending time alongside those at (and over) the edge of real financial crisis - where there actually isn't enough; including friends in Haiti who think in terms of single dollar issues and having food to eat. Their experiences make it obvious that my own 'troubles' are really not - so why does it always seem so? Somewhere in that tension of my (obviously shared) perception, and the reality of those 'off the bottom rung of the ladder'is what I have tried to understand in a consistent and relatable way.
Part of the frustration which led me to think about this a lot was that I used to track every penny. I used Microsoft Money to input every receipt and balanced my checkbook to the bank statements every month. I set budgets, with which I tortured my family, and rued every dollar passing through our hands. The thing is, that routine didn't change when I went from making 32k to 55k. It didn't change when I went from 55k to 85k, nor again when I was at 106k. I look back on the entire enterprise as folly today, and wish I could have some or all of that money stress back to blacken my beard or unwrinkle my face. Yet, there was a lesson there in that even as I attempted to hold each dollar, they all went away at a rate that made me feel like I was living on the edge of what was possible. If I could only make a bit more, and save a bit more, then I would actually achieve my money goals. It was pure BS. While I knew that I didn't have "real" money trouble, I had real trouble appreciating what I did have. I knew that the guy making 55 would have been jealous of the guy making 85, but they were both me and both unhappy. So the news segment which confirmed this feeling went all the way up to a family making a few million a year really struck me. I wanted to understand how this could be possible. This is how I have come to think of it.
All money concerns can be put into 4 categories: Everyday Spending; Spend Occassionally; Spend In An Emergency or Save For; Cannot Afford or Will Never Buy. This view of money shifts across orders of magnitude of dollars within ranges of family income. For instance, between 25k and 40k per year you spend dollars regularly, spend $10s here or there, spend $100s in rare and painful circumstances, and simply cannot afford things in the $1000s. Between 75k and 110k you spend $10s regularly, spend $100s here or there, $1000s sometimes, and cannot afford things that are 10s of thousands. The salary ranges are totally made up, and each of us might have different associations to the orders of magnitude at some point on the range, but you get the idea. At the lowest level of income we can understand then that the pennies are being spent, the dollars watched, the 10s are precious, and 100s are too much. At the higher ends, 1000s are spent without much concern. The whole point is that your feelings slide along this scale as you are able, and so you never 'catch up'. The value of understanding this is figuring out how to stop the sliding perception; whether the goal is spending less, or just relaxing about what you do spend.
With one income and a family of 5, I finally quit worrying about expenditures when I reached an 88th percentile income in the USA; above the 99th globally. This is a silly level at which to quit worrying - but even here I think it was only possible because my expenditures didn't come along into the next threshold. Which is to say that having my spending habits at the 10s/100s/1000s level while earning what could be used to fund the 100s/1k/10k level allowed me to relax. Maybe I also matured a little in my view of money generally, but I haven't put that to the test by reducing my income.