Talking money…one size does not fit all

On Sunday afternoons when I am cooking I generally have the radio on (yeah, I know how quaint I listen to an actual radio versus an iGadget) turned to my local NPR affiliate and around 4 ish, Marketplace Money with Tess Vigeland is on. If you have never listened to this show, you should check it out; it does a great job of talking about all issues related to money including the employment landscape. So it was with great interest that I listened to a special last week that was produced in conjunction with the New York Times Ron Lieber that talked about money through the ages. Basically a snapshot of where your financial priorities should be starting from the teen years up to age 70.

I probably should have turned off the radio since generally speaking I think most financial advisers and planners are greatly disconnected from the real world. Too many of us are unemployed or underemployed, a good third of Americans have credit scores below 600 and frankly just surviving is the name of the game. The problem with so much of the advice even from so the called guru’s that have a more down to earth approach like Dave Ramsey is that there simply is no one size fits all approach. There have always been exceptions to the rule the problem is there are now more exceptions to the rule and these folks deserve real advice that takes into consideration not everyone works at a job that pays a living wage, offers adequate benefits and even retirement accounts. Hell, I haven’t had a job where I had access to a retirement account in about 12 years!

Anyway back to this special, it starts off with a kid looking to go to college and a specialist is brought in to tell the kid that he can and should work to save towards his education and that state university is his best bet. On the surface that sounds like sound advice especially oh say 20 years ago when college costs were reasonable. I used to think such advice was valid but my son now attends a private Catholic university and only because in the end they gave him a scholarship package he/we could not refuse. Yet he still has had to take out a smallish loan. In today’s world going to college sans loans is pretty hard to do for anyone who considers themselves middle class. Hell for shits and giggles I just looked up the tuition for the University of Maine which is our state school here in Maine (like y’all didn’t know I was in Maine) and after scouring the site it looks like the total cost excluding the various fees for 12 hours a semester and room and board is somewhere in the ball park of oh say $13,300. Which is tad cheaper than the $18,000 my esthetician is paying for her son who is a sophomore at UMaine. See, those fees are tricky bastards, I am learning that with my own son who has called me more than once in a state of panic because there is some fee/cost that we didn’t know about. Point is annual tuition at even a basic state university will set you back a good $15,000-20,000 a year!

Let’s talk reality… how many kids do you know can work summers and earn that type of scratch? I have said it here before and I will say it again, most kids can’t and unless Mom and Dad truly saved from day one it’s hard to avoid loans. Let’s not even discuss what if what the kid wants to pursue isn’t offered at your state university then it gets tricky, at that point its private school or an out of state university system. So telling a kid to work, save and go to state university while it sounds good is probably not realistic. Even the current idea of going to community college is not always accessible as enrollment at such schools is surging to accommodate the influx of adults looking to retrain or finish their education. The result is more and more community college systems are being stretched thin with some programs even having waiting lists.

Moving on, since I am at the tail end of my 30’s, I listened to the couple in their 30’s who was struggling with debt after getting advanced degrees and now adding a baby to the family. Of course the advice was get serious about that debt, make a budget, and get more aggressive about retirement. I am pretty sure that an adviser would give me that advice and I would say oh really? Why don’t the financial advisers ever discuss the fact that with rising gas prices, food costs, etc that sometimes staying within your budget is not about the latte effect but simply about not having enough money? Recently I have had to readjust our family budget for these various factors, the result less discretionary income and less to go in the savings pot. For this couple over the years they had used credit cards to supplement their lack of income while in school. Speaking of school with more and more adults returning to school in their late 20’s and above that impacts the family budget. I know it did in my family. By the way more and more families supplement inadequate wages by using credit cards yet no one ever talks about that.

Most financial advice assume a basic trajectory for all that looks like high school, college, young adulthood, marriage, babies as if everyone follows this path. Yes if you follow that path chances are good you might have a good shot at financial stability or at least better odds. Problem is you have folks like me, who did high school, marriage, baby, work, divorce….remarriage, college, grad school, another baby, and work again. I suspect many people follow a path similar to mine and it can and does impact your financial stability or lack thereof. Right now while most of my friends have youngish kids like my daughter I also have a kid in college so my finances look a lot different than if I just had one or two younger kids. It impacts everything I do even down to my ability to plan a vacation or not…

Moving along though at the end of this piece there was a 70 yo woman featured who despite having lead a life that was clearly middle class had absolutely zero savings for retirement. As a result she lives off a meager social security check and money earned from dressmaking, her monthly income on a good month was about $1400. Oh dear the financial specialists seemed stunned and while they offered up some ideas (reverse mortgage) to stabilize her finances I thought the reality is working all your life is nothing new if you are poor or working class. One rarely retires and when you do, it generally means your time on the planet is drawing to a close. Middle class and above privilege says that when one gets to a certain age they should expect to sit back and relax. Personally the woman in the clip had a wonderful attitude and seemed to be willing to go with the flow, yes she should have made better choices, she admits that but in chasing the American dream she always thought things would get better. In many ways I suspect that is how most of us live, assuming things will get better or that we will have enough time to get our finances in order but rarely does it happen that way for many.

I guess the point of this rather long post is that for me until we as a nation start getting serious and acknowledging that nope we aren’t a classless society that even money management issues on some level are elitists and classicists. Since my own financial crash of 2007 I have spent countless hours poring over financial planning guides only to decide most are hard to implement based off our lifestyle (my partner is a full time freelancer and my salary is small) instead crafting a plan that makes sense to our family. Yet in light of the new financial realities facing many in this country we need a new breed of financial adviser one who understands the realities facing millions. That maybe all you can do is put $25 in savings and acknowledge that while more would be better it’s better than nothing. We also need to get back to a place where we look out for one another but that is a whole other post.

3 thoughts on “Talking money…one size does not fit all

  1. I have ZERO savings but I will admit that is due to my piss poor life planning. I have no true work skills. The things I trained for in the Navy doesn’t make a lot of money in the real world. Now I am going to college with the help of the Navy to get my BA in Dietetics, hopefully it’s a good career choice.

    As for my finances, I am going to try my best to remedy my lack there of by the end this year. Honestly, I don’t really listen to financial advisers that much, I take what I find to be useful and forget the rest. When I get my footing call my bank and talk to them about setting up the right savings accounts. I know I need to save what I can without sacrificing some of the little things I like to do. And I definitely don’t want to take anything away from the kids activities. I will work this shit our the best I can.

    Like I told the people at the town’s school budget meeting I have never been so poor and have learned to work with so little in my life! I feel like a magician with money. lol

  2. Financial managers seem to exist to tell you how to manage the extra money one has. For the people without extra money, there is a whole subculture (?) of people (mostly women – mostly mothers) who share frugal living advice, low cost ways of living, etc. I have a lot of religious friends who are stay at home moms; they have multiple kids and their husbands are the sole breadwinners – they are operating on a whole different level than the Financial Planner types who work at the bank or for hedge funds. There are so many websites (I remember the days of hand written and photocopied ‘zines that would come in the mail!) dedicated to this stuff.

    These families live REALLY frugally – no lattes for them, no plane trips, or expensive electronic video games, and they don’t save for their kids’ college expenses, etc. It’s just not do-able on, say, 25-30K a year when you have three, four, five, etc. children. Often times they go without things like medical insurance, too, or a car. But some of them have zero debt, and they and their children keep busy!

    I think having a parent or partner at home is huge – that’s a lot of extra labor that you don’t have to pay for. So you save money on eating out because someone can cook, and you can even save money on buying expensive food products because someone can prepare things from scratch with inexpensive ingredients.

    What I haven’t come across yet is the financial advisor for the two income household where money is tight (like household income under 40K a year).

  3. I agree that overall the advisers seem to exist only for folks who have a few extra dollars not the two income couple who is barely in the middle class.

    I know many families like the one you mentioned where there is a stay at home parent but no extras, no savings, etc…having not saved for my own son’s college I think that type of thinking is a mistake.

    Danielle, it sounds like you are aware of where you need to be and are going to make that happen but it will be in baby steps. I am totally with you. Hell I felt good that in March I didn’t have to dip into the savings and its not like its a ton of cash that is saved up. I am all about the baby steps.

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