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Always Start With Frugality

By Frugaling 6 Comments

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Photograph 022 by Katie Purnell

Recovering from financial calamity is fraught with con men, pyramid schemes, get-rich-quick guides, and work-from-home advice. Each of these examples provides a “solution” to debt. With their help, they suggest you can recover and live a better future.

When I was in debt, I wanted a quick fix. Unlike consumption, where it was effortless to swipe a credit card, recovering from debt meant putting the breaks on everything. All the momentum – from advertisements to cultural upbringing to environmental expectations to relationships – was moving me in one direction. I needed to stop, and didn’t know how or who to turn to.

Unfortunately, many of these methods fail to help people in need. They miss the mark, take advantage of those with less, and tend to only work for a small portion of the population.

A couple years ago, I remember wading through my Gmail spam folder, wishing that loan payment and relief emails were true. They marketed special exemptions and “secret” deals to wipe the slate. These clear scams seemed like magical oases of monetary support. Wouldn’t it be wonderful if I could click three times and my debt would wash away?

The reality is we share two equations for our financial lives:

Income – Expenses = Net Income/Loss

Free Time – Work = Net Free Time

We all know it, but how we approach these solutions varies greatly. We can add to our income through wealth, jobs, or advocating for pay raises. Similarly, we can reduce our expenses by cutting cell phone bills, reducing energy expenditures, or selling a car. What remains is our net (total) positive or negative number. If we are all constrained by these equations, creativity must occur on both ends – with income and expenses.

Today, I advocate for people to reduce expenditures before adding on more income opportunities. Frugality helps people minimize spending and prevent spending – thus heightening net income. By removing expenses, we tend to simplify our lives and work less. Hence, those who pursue frugality first are able to free up time.

While I realize the necessity of work, we live in an overworked and underpaid society. If we can manage to spend less, our lives can be fuller – across economic strata. Free time is a dying quotient across age groups. Even children have less time for recess! Fun, free play is at the heart of creative discovery. When we’re overworked, stress levels spike and life becomes a dull day of shower, eat, wash, repeat.

Before pursuing scams and “special offers” that tack on more qualifiers and hoops, consider reducing your workload by removing anything extraneous. Subtraction is easier and safer than working longer hours, picking up a second job, or working on side jobs. Likewise, it helps you stay psychologically and medically well – not overworked and near the brink.

Start with frugality. Remove all the superfluous from your budgets and lifestyle. Likely, there’s room for less.

If that’s not enough, then start hustling.

Filed Under: Save Money Tagged With: Budget, expenditures, free time, Frugal, frugality, Income, spending, time, Wealth

Should You Share Your Income And Worth?

By Frugaling 13 Comments

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City Hall, Toronto, Ontario, Canada

Imagine walking down a busy street. You see people you’ve never met hustle to and fro. They’re going to work, school, and social gatherings. Some faces are smiling; others, not so much. You don’t know them and they don’t know you.

Now, imagine seeing digits carefully placed above their heads. When you look at these digits you judge someone beyond their race, ethnicity, age, gender, potential sexual identification. These numbers allow you to see someone’s annual income, and even their net worth. Suddenly, that man with ripped jeans looks a lot more impressive with a staggering 7 digits above his head, doesn’t he? Or, how about the mother with two kids followed along by a 4-digit number?

Would you worry more? Would you care more? How would you evaluate disparities?

Traditionally, annual incomes are closely guarded secrets. Nobody knows what their neighbors make most of the time. Unless you work for a public, governmental organization that requires public disclosures, annual income is between you and your employer.

Even more difficult to ascertain is net worth. As a total of all assets — liquid and non-liquid — it can be challenging to calculate. Net worth represents a total wealth after taxes that’s yours to keep and grow and spend as you see fit.

Aside from the aforementioned exception for public employees, income and net worth tend to stay private. Broaching the subject in certain company can seem gruff, rude, or downright hostile. To talk about these numbers is to admit something… personal.

It’s as if net worth represents our worth.

If you were to ask your neighbors what their incomes and net worth was, how might they react? How about your friends? How about your acquaintances? And perhaps most tellingly, how would your parents react?

Likely, there would be some awkward reactions, defensiveness, shame, and dread about talking in depth about digits. Those in poverty might exhibit the same emotions as those who are wealthy. Talking about money management and worth are inexplicably tied to self-worth and self-identity.

The consequences of this hush-hush mentality have been grave. To publicly acknowledge may seem novel, but silence harbors injustices and prejudices. And that’s why we must throw open the door to personal vaults and share.

Take the gender gap injustice: women make 77 cents for every $1 men make. There’s nothing fair about it. If we treated, understood, and respected women as equals, this pay gap wouldn’t exist. Women also deserve paid maternity leave, child care assistance, and flexible health insurance options should they be single parents. Each of these failures in assistance perpetuate gender inequities.

Another population that suffers greatly for economic privacy are African Americans. In 2011, black workers made an average (median) household income of $39,760. Whites took home a staggering $67,175 in comparison. Racial inequality has been around for hundreds of years, but that doesn’t mean we should accept this status quo. Again, various factors hold African Americans back: high policing in black neighborhoods, judicial policies that prejudicially penalize non-violent drug offenders, and poorer educational opportunities in predominantly minority communities.

Between communities, tremendous per capita incomes exist. You can be born and stay in poverty — all as a consequence of your birthplace. In Washington, D.C., the average per capita income is $45,290. But in poverty stricken post-boom-and-bust Gary, Indiana, each resident makes an average $15,764. While these average incomes help show broader income inequality, they’re depersonalized. You can’t see the individual and how that one person must live.

Annual income and net worth become two of the best measurements for the consequences of these hurtful, unequal policies. By failing to openly discuss these issues, we fail every disadvantaged group.

By opening up our wallets for analysis, we may squirm and squeal. It’s uncomfortable to admit our total salary and savings because we think it says something about who we are; frankly, it does. But there’s a chance that if we admit our incomes and net worth, we’re providing those looking for equality an opportunity to stake their claim.

Oh, lest some commenter call me a hypocrite, I make about $20,000 per year.

Filed Under: Social Justice Tagged With: Annual, gender gap, Income, Income Inequality, net worth, Pay, paycheck, racial gap, Salary, unequal

Who’s Responsible For Poverty?

By Frugaling 12 Comments

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Banksy I Hate Mondays Art
Art: Banksy

Picture this: a dirtied, scraped up, penniless homeless man holds up a cardboard sign pleading for pocket change. Perhaps he wrote well wishes and a message of gratitude for giving what you can. Most people who pass him don’t know where he’s from, his name, or how he came to be homeless.

As humans, we tend to fill in the blanks. Unless you’re chauffeured from a gated community to a private jet, and refuse to look out the window in daily travels, it’s nearly impossible to miss these questions of responsibility. We tend to explain the inexplicable with simplifications. People deserve what they deserve.

These mental shortcuts enable us to quickly pass through our day and “understand” the world around us. It’s complicated out there, and we have limited brain power. We can’t worry about everything, can we? Dwelling on uncertain ideas of responsibility might result in something scary: feeling lost, stupid, or flirting with pointlessness.

When we think of the causes of poverty, it can be natural to blame individuals. For instance, that the person asking for change on the street corner is too lazy to work, wants to feed their alcohol addiction, and/or doesn’t care to shape up. If only they would take responsibility for their actions, then they wouldn’t be homeless, right?

That’s the simple conclusion — and it’s possible — but today I want to encourage us to take a step back. Let’s think about some alternative conclusions. Those alternative conclusions harbor a truth that’s larger than one simplistic answer. It encapsulates the range of possibilities and diversity of lives.

Capitalism tends to encourage individual responsibility for actions. We have a penal system that punishes individuals’ actions as if they are divorced from difficult upbringings and environments — separate and isolated incidents. We have enormous financial markets, which encourage individual college students to major in business, computer science, and engineering. We congratulate and honor people for “their” work and individual contributions to science, politics, and bravery. When we seek answers for homelessness, poverty, and even wealth, the scripts have been built for us. As I’m a visual person, I’ve created a pie chart to explain responsibility in capitalism.

Pie chart 1

In this first chart, capitalist ideals suggest that individuals bear the responsibility. Pretty simple, right? When I was younger, I enjoyed the efficiency of more libertarian — individual responsibility — principles. If you work harder, you’re rewarded. The world is yours, if you earn it.

Those capitalism-infused libertarian values of responsibility eventually shifted. The best explanation was an active decision to expose myself to diverse reading material and cultures. Suddenly, the responsibility for homelessness, poverty, and wealth became complicated ideas. I needed to wrap my head around the chicken or the egg — what came first — of finance. Did the poverty cause lethargy or did laziness cause poverty?

Pie chart 2

Obviously, these pie charts aren’t scientifically exact. They’re meant to be illustrations of my thought process, as I consider where to assign blame and responsibility when I see poverty and wealth. The more I thought about what might influence and shape an individual, the more complicated it became. Certainly, it would save me time to write off the impoverished and say they are welfare grubbing lifesucks, but I choose to represent a different point of view. We are each born into this world with different characteristics — monetary, racial, SES, etc.

Pie chart 3

If we reexamine the aforementioned homeless man, responsibility becomes murkier with new variables. Suddenly, we see the man beyond the exterior and our previous assumptions. Perhaps the reality is that he was born to a single-parent household in a disenfranchised neighborhood. Perhaps he was a Vietnam War veteran who suffered from the losses of fellow soldiers and improperly/untreated posttraumatic stress disorder.

Or, perhaps we are all incredibly complex, diverse beings. We’re born with unique genes, environmental upbringings, educational opportunities, and parents. Heck, those listed here are but a small fraction of all the variables we could include.

If we quickly judge that someone bears the responsibility for being destitute, we are the lazy ones. We are the ones we often hate, despise, and discount. Carefully examining responsibility is challenging and not without errors, but we avoid incorrectly concluding that someone failed and deserves the punishment of poverty.

Filed Under: Social Justice Tagged With: blame, Class, Finance, impoverished, Income, poverty, responsibility, ses, status, Wealth

Was Albert Einstein A Minimalist?

By Frugaling 10 Comments

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Albert Einstein Laughing

Let me preface this essay by saying I’m not a “genius,” “theoretical physicist,” or “great thinker,” but I decided to pick up Einstein’s biography to learn about someone who’s been called all three. In 2008, the famed biographer and writer, Walter Isaacson, published Einstein’s story in a whole new light. His book catalogues the many triumphs, tribulations, and everyday struggles of the man who has become so revered.

As I read this 704-page tome, the very essence of Einstein came alive. Isaacson is a skilled writer, but he was homing in on something unique about his main character. Einstein extolled and lived for a simple life.

Albert Einstein is remembered for his brilliant discoveries in the field of physics. Without going too far into the weeds, he theorized about relativity and gravity. He felt they overlapped and coalesced. For instance, that light would bend in travel because of the sun’s gravitational pull. At the time, these were maddeningly complex ideas with little experimental support. Despite the novelty and unknowns, he stuck his neck out — time and time again. He didn’t bend or sway to convention, and it ultimately made him famous around the world.

Throughout the book, Einstein is heralded for derision of power, authority, and status quo. Even greater, he seemed to attack the fundamental strictures and culture of materialism. It’s clear that his simple living values made him a better, more unique thinker. Without a doubt, Einstein was an early pioneer for minimalism in the face of excess. And here are 5 reasons how he was a minimalist:

1. He idealized simple lifestyles

Einstein was fascinated with bohemian living. Even in early letters to his first wife, he professed that they shouldn’t ever be trapped by society’s expectations. He seemed to love the idea of eschewing what so many wanted. Einstein loved bohemianism, as he found creativity and passion in literature, music, and science. He commingled the three and crafted magical mental imagery of difficult physical constructions. Self-described bohemians were countercultural, just like the beatniks, hippies, and hipsters of generations to come.

2. He disliked bourgeois pursuits

He consciously avoided upper class trappings. This is captured perfectly by a quote in the book. When traveling to another city, he stayed on an office couch instead of a hotel. His friend said, “This was probably not good enough for such a famous man, but it suited his liking for simple living habits and situations that contravened social conventions.” Fame didn’t mean he would suddenly change his way of living. The rebel inside him allowed for success.

3. He gave away much of his wealth

He feared that fame and wealth might affect and degrade people’s ability to live creatively. Einstein gave generously and even dedicated all the Nobel Prize winnings to his first wife. He didn’t crave wealth, nor did he live by its swings. Einstein enjoyed good coffee, cigars, and conversation. Money allowed for those staples, but otherwise was relatively unnecessary. The power of wealth could’ve purchased many conveniences and statuses, and yet he downplayed its ability. Take this passage from the book: “From Prague, Einstein took the train to Vienna, where three thousand scientists and excited onlookers were waiting to hear him speak. At the station, his host waited for him to disembark from the first-class car but didn’t find him. He looked on to second-class car down the platform, and could not find him there either. Finally, strolling from the third-class car at the far end of the platform was Einstein, carrying his violin case like an itinerant musician.”

4. He ignored conventions

Much like the Mark Zuckerbergs of today, Einstein didn’t follow social norms for dress. Comfort was the more important factor. His hair grew unruly in later life. It was iconic for him, as he was this renowned genius, but I believe that this was a subtle rejection of cultural mores. Einstein wanted to show he was unique in both thought and modest dress.

5. He took time for independent thought

Above all, Einstein’s genius was in his ability to isolate and focus. For days and weeks at a time, he could hole up in his study and work. He didn’t eat regularly, nor did he pay attention to much around him, but in that solitude, he solved some of the greatest questions of all mankind. His habits often made him cold and cantankerous, but it also cultivated a lifelong independence. Simple time alone was vital to discovery.

I’m nearly finished with the book, but these discoveries were too hard to hold back. I figured I’d share them with you as soon as I could. Within these passages, quotes, and stories, I see a man that feared the trappings of privilege. He was a social advocate, scholar, and seeker.

In a way, I wonder if I share something with Einstein: a fear of ever having more than enough. I fear what money can do, and how some people embrace elite statuses at the cost of others. If Einstein were alive today, I’d ask whether he feared he might lose his creativity if he lived more lavishly. My guess is that he would say “yes.”

Oh, one more thing, read his biography: Einstein: His Life and Universe.

Filed Under: Minimalism Tagged With: Albert Einstein, counterculture, Frugal, Income, Life, minimal, Minimalism, money, Physics, Simple Living, Universe, Wealth

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