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August 9, 2010 10:33 AM   Subscribe

On money and happiness Takeaway: buying stuff doesn't make you happier, although investing in experiences that strengthen social and familial bonds can. Interestingness: savings increased to 6.5% this year and some experts think this is permanent; conspicuous consumption is shifting to calculated consumption; “There’s massive literature on income and happiness. It’s amazing how little there is on how to spend your money.”

Living simply
Dozens of helpful and interesting links to removing oneself from the vicious earn-consume death spiral.

Improving personal finances
Simple, colloquial advice on living within your means.

Community financial help
Although the financial tracking feature may be defunct (due to the fact that this is a volunteer site and they were concerned about security breaches), using a community to support financial behavior change has merit.

Rent vs. Buy
Why it may make more sense to rent.
posted by erikvan (57 comments total) 50 users marked this as a favorite

 
Pfft, you can keep your statistics and facts. I won't believe the shift in culture until rappers start talking about the sweet lease they got on their Lambo.
posted by Chipmazing at 10:42 AM on August 9, 2010 [2 favorites]


...although investing in experiences that strengthen social and familial bonds can...

I just found my justification for upgrading to a fiber internet connection!
posted by DU at 10:43 AM on August 9, 2010


It's really going to be an interesting time when the baby boomers reach retirement age and realize not only are they unable to live (as they feel they are entitled) on Social Security, but also that they failed to save for retirement and their house is not worth what they think it is. I fear it is too late for the boomers who work primarily to finance their debt, but perhaps the next generation will learn some kind of lesson on what not to do.
posted by 2bucksplus at 10:46 AM on August 9, 2010 [3 favorites]


I won't believe the shift in culture until rappers start talking about the sweet lease they got on their Lambo. used Honda Civic.

FTFY. HTH. HAND.
posted by eriko at 10:47 AM on August 9, 2010 [1 favorite]


Straw men army financing available, good rates for well qualified buyers.
posted by Burhanistan at 10:51 AM on August 9, 2010 [1 favorite]


Owning a bunch of junk won't make you happy, in fact, it may cause the opposite.

News at 11.

Seriously though, philosophers and the like have been saying this sort of thing for >2,000 years...and yet, I'll be damned if I don't look with a little envy at the guy in the BMW while I drive by in my '93 camry.
posted by Lutoslawski at 10:52 AM on August 9, 2010 [5 favorites]


8 Step Plan For Happiness
posted by weston at 10:57 AM on August 9, 2010


> 8 Step Plan For Happiness

Eh, Stopping at number 3 on that one is quite enough. There's nothing wrong with having stuff if you're actually using it.
posted by Burhanistan at 11:01 AM on August 9, 2010 [1 favorite]


Haven't we already established that the whole "rent vs. own" debate is entirely a matter of 1) where you live, and 2) personal preference?

Also, money doesn't buy happiness; it buys freedom. What you choose to do with that freedom may or may not make you happy.
posted by coolguymichael at 11:08 AM on August 9, 2010 [19 favorites]


Money can't buy me happiness, but it has brought me dance shoes, woodworking tools, baking supplies, and so on.

So I might not be following that 8-step plan right to its conclusion.
posted by Mike1024 at 11:13 AM on August 9, 2010


Wasn't there an study that found that cosmetic surgery was one of the few expensive things that consistently made people happier?
posted by circular at 11:14 AM on August 9, 2010 [1 favorite]


Interestingness: savings increased to 6.5% this year and some experts think this is permanent

Interest rates are rock bottom and savings are increasing regardless. Isn't the Federal Reserve in keeping interest rates low to encourage spending, not savings?
posted by banal evil at 11:17 AM on August 9, 2010


I'll add that people thinking along these lines really should read Your Money Or Your Life (buy it used or get it at the library if you want to be really thrifty) as well. It's a great resource for re-engineering your finances and your understanding of how, why, and when to spend money. It's not perfect, but there's a lot of really worthy wisdom in there.
posted by sonascope at 11:19 AM on August 9, 2010


Money is the collective belief among other people about how much they'll give to you or do for you, and just how much of your bullshit they'll take.

Saying money doesn't buy happiness begs the question: we want to believe there is a formula for happiness that will work for everyone, that isn't (unlike money) a zero sum game where the increase in my happiness is a net loss for someone else. But like I said, that begs the question: how do we know this to be true? And if it's not true, aren't any such how-to-be-happy guides a cruel and futile mockery of the unhappy?
posted by hincandenza at 11:21 AM on August 9, 2010 [2 favorites]


Or what coolguymichael said.
posted by hincandenza at 11:22 AM on August 9, 2010


You're dead for a real long time
You just can't prevent it
So if money can't buy happiness
I guess I'll have to rent it!

--Al Yankovic
posted by Faint of Butt at 11:23 AM on August 9, 2010 [4 favorites]


These are great choices that fit the people making them and I'm all for that. I'm not advocating excessive consumption, but all this New Simplicity New Frugality soft news may distract people who are able to take some calculated risks with their finances, because markets are cyclical. I haven't seen anything to convince me otherwise. I feel really good about putting money into my home right now. I know that's specific to my age, locality, timing, job security, and on and on. I worry that all this simplicity hype encourages stagnation to continue, which may be just as bad as the buy buy buy sub-prime hype setting up a massive bubble that popped.
posted by rainbaby at 11:28 AM on August 9, 2010 [1 favorite]


Mr. Belic says his documentary shows that “the one single trait that’s common among every single person who is happy is strong relationships.”

I guess that's common among every single person who is happy that he knows :-)
posted by Mike1024 at 11:34 AM on August 9, 2010 [1 favorite]


...News at 11.

Seriously though, philosophers and the like have been saying this sort of thing for >2,000 years...


Some variation of this complaint about scientific insights about the human condition pops up pretty frequently around here but in my opinion is off-base. Sure, pretty much any finding in psychology may have been predicted by a philosopher. But you could say the same for any corresponding opposite finding. The point is that psychologists believe that these are empirical questions that can be understood and answered more fully using the tools of scientific inquiry.
posted by AceRock at 11:36 AM on August 9, 2010 [4 favorites]


It's really going to be an interesting time when the baby boomers reach retirement age and realize not only are they unable to live (as they feel they are entitled) on Social Security, but also that they failed to save for retirement and their house is not worth what they think it is. I fear it is too late for the boomers who work primarily to finance their debt, but perhaps the next generation will learn some kind of lesson on what not to do.

This has happened somewhat to my parents, however they are not your typical boomers (or at least, not the ones seen drinking wine on a yacht or cruising in a Benz). It's not that they couldn't save money or that they lived beyond their means, but that they didn't earn a lot of money in their working years and now the cost of living today can be a little too much for them. They certainly don't feel entitled to anything, but are disappointed that they're retired and still paying a mortgage.
posted by Calzephyr at 11:39 AM on August 9, 2010


And I meant to give props to the OP for the nice round up of articles. My spring cleaning lasted almost four months this year and I calculated that I recycled, gave away or threw out almost 1700 dry gallons of stuff. Oddly, I'm much happier and I even lost a few pounds in the process. I think the happiness part came from not having to spend time looking after the stuff (ie, dusting), enjoying the empty spaces in the house and getting rid of things that I was holding onto for the wrong reasons, such as guilt. Paring down can be a real journey of self-discovery!
posted by Calzephyr at 12:07 PM on August 9, 2010


8 4 Step Plan For Happiness (if we were being honest)

1) money
2) more money
3) even more money
4) so much money Buffett, Gates, and the Sultan of Brunei are my personal manservants
posted by larry_darrell at 12:14 PM on August 9, 2010 [2 favorites]


People who say "Money doesn't buy happiness" have never watched their bank accounts dwindle to less than their monthly rent payment and waited an hour-and-a-half in a room of screaming children for the thirty-second process of picking up their food stamps card and have prepared to sleep in their cars in the middle of the winter because they can't afford a hotel and worked on library computers for a year since $200 Netbooks are still too expensive and be told by a mechanic that their car is a deathtrap because it has no rear shocks and there are terrible things wrong with its front axle but they keep driving it anyway because they don't want to have to use school loan money to pay for another car and worked in a warehouse that was giving them a chronic respiratory illness because they couldn't afford to drop from a $9/hour job to minimum wage. They don't get the task of fostering strong relationships when they can't afford to go out with peers or visit anybody outside where they live on a regular basis, and every outing they do go to has an uncomfortable "Can the poor person afford this" overtone to whatever venue considered.

And fuck, that's not even that poor considering the level of poverty necessary to qualify for the vast majority of public assistance programs. I doubt anybody writing these articles has ever come close.

Those guys want to imagine some kind of beautifully simple, frugal lifestyle where their furniture is all clean lines and sparse decorations like it came straight out of a goddamned Ikea catalog, like the aesthetic of a MacBook directs their entire existence.

Do you know what your bikes and your panniers and your cookware that's high-quality enough to serve multiple purposes and your garden beds and seeds and your apartment near the farmer's market with access to quality public transportation that accommodates your new deep freezer for your fifty pounds of grass-fed beef you bought for cheap from the Amish farmer and your job that doesn't require you to maintain what threadbare business wardrobe you have and your giant crock pot for your community get-togethers and your MacBook, your fucking MacBook? Money, all that shit costs money. Go blow that "living simply, living frugally" bullshit at people who don't have shit in the first place and explain to them how money doesn't buy happiness and it's not buying your happiness and then see how that works out for you.

Rap songs are full of people wanting things, money and things, because the songs are speaking to an economic class of society where the vast majority of people don't have money to pay for heat, and who know goddamn well how much happiness and relief it brings when you know that the check you write to pay off that monthly bill isn't going to bounce. You think someone living in that situation wouldn't fetishize cash and material goods?
posted by schroedinger at 12:17 PM on August 9, 2010 [260 favorites]


Community financial help
Although the financial tracking feature may be defunct (due to the fact that this is a volunteer site and they were concerned about security breaches)


That oversimplifies the status, and demise, of Wesabe a bit: it was a startup with $4.7M of funding (according to TechCrunch).

The founder's blog post on the shuttering of Wesabe:
In recent months Wesabe has been operating on a shoestring budget, with support from some of the developers and operations people who made up our core team. While the site has remained online and we continue to hear from people who find it helpful, we have not been able to provide the support people need to use it for something so central as financial management. I’ve felt especially terrible that some members have a good initial experience but then hit a problem, often after investing many hours, and aren’t able to get help with it. That’s obviously a bad experience, and not what we want to offer. Also, because Wesabe stores such highly sensitive data, continuing to operate the service with shoestring operations and security staff is not acceptable, and we do not want to continue accepting new accounts if we cannot guarantee the security level we believe our service requires.
It's a shame, Wesabe had some interesting ideas -- lots of them around "similar households spent X on Y, here's how you could save".

But it always seemed to me that Mint were doing a much better job at marketing themselves in the online finances space. And it's a tricky place to market at best, given that it's predicated on "please give us your online banking passwords so we can aggregate your data".
posted by We had a deal, Kyle at 12:21 PM on August 9, 2010 [1 favorite]


Also, money doesn't buy happiness; it buys freedom.

Well, it buys goods and services, which may or may not be freedom or happiness.

Eh, Stopping at number 3 on that one is quite enough. There's nothing wrong with having stuff if you're actually using it.

Though eventually we'll all be past step 8 (and it's worth planning for that), I agree that the right point on the continuum he establishes is probably subjective -- even variable depending on life circumstances -- and that by the time he gets to the end, he's overstating the case.

The thing about stuff is that even if you're using it, it has to be managed. The use-value has to come out above the management investment. I'm someone who tends to make judgments on that front that often seem mistaken later (almost always favoring the use value)... and so Pilgrim's overstatement might itself be useful for me to keep in mind.

For a few years now I've actually been able to fit most of the stuff I need day-to-day in my car. I used to be able to fit everything I owned minus a small amount of furniture in my car. It's actually been really nice and half the time I feel like I'm still carrying around more than I need, that managing and organizing it takes more attention than I'd like, that there's too many things that only see occasional use but take up a lot of space. I think with some careful thought and a few one-time investments, I might benefit from even less.

I understand that building a certain kind of home isn't fully compatible with this metric, and I often think about this when I'm visiting homes that are put together in a way I like. I hope the time will come when I'll be taking this things to build a physical place in community I'm connected to, and I suspect that when that happens, I'll value that place and some of the things in it as I value some places and things now. But even then, I hope that some of the appeal of a certain lightness of possessions remains. Sometimes what you don't have has utility too.
posted by weston at 12:32 PM on August 9, 2010 [1 favorite]


People who say "Money doesn't buy happiness" have never watched their bank accounts dwindle to less than their monthly rent payment...

The usual counter to this is to quote research that, beyond a certain level required for comfort, more money doesn't make you happier. But then the provisos start -- money can lead to great experiences, or experiences that deepen bonds between you and others, or more time to do things you like, or, or, or... Before long it's a swiss cheese of a principle, and not in the tasty way, though its appeal to some remains.

It took me a long time to reach a level of comfort beyond which I'm supposedly immune to money's charms (that is: I'm not worrying about rent, or eating today, etc.). What did I do? I went out and bought a Yamaha "portable grand" piano. I fucking love it. How often do I derive pleasure from it? All the time. I'm miles from that keyboard and I'm deriving pleasure from it right now, just thinking about it.

Part of the problem is how you define "happiness". Of course you can load it with all kinds of unreasonable criteria such that no amount of pleasure will equal it, and then you can santimoniously proclaim that X doesn't give you happiness, for any value of X. But of course, if someone said "Money can't buy you pleasure", you'd laugh at them in their face.
posted by Durn Bronzefist at 12:44 PM on August 9, 2010 [7 favorites]


I wish i could favourite schroedinger's post above more than once. what is it the lady said? I've been poor and I've been rich. Rich is better.

also what coolguymichael said
posted by marienbad at 12:45 PM on August 9, 2010


Rap songs are full of people wanting things, money and things, because the songs are speaking to an economic class of society where the vast majority of people don't have money to pay for heat, and who know goddamn well how much happiness and relief it brings when you know that the check you write to pay off that monthly bill isn't going to bounce. You think someone living in that situation wouldn't fetishize cash and material goods?

Super Nintendo, Sega Genesis
When I was dead broke, man I couldn't picture this
50 inch screen, money green leather sofa
Got two rides, a limousine with a chauffeur
Phone bill about two G's flat
No need to worry, my accountant handles that
And my whole crew is loungin'
Celebratin' every day, no more public housin'
Thinkin' back on my one-room shack
Now my mom pimps a Ac' with minks on her back
And she loves to show me off, of course
Smiles every time my face is up in The Source
We used to fuss when the landlord dissed us
No heat, wonder why Christmas missed us
Birthdays was the worst days
Now we sip champagne when we thirst-ay
Uh, damn right I like the life I live
'Cause I went from negative to positive
And it's all... It's all good
...and if you don't know, now you know

-Biggie, "Juicy"
posted by AceRock at 12:58 PM on August 9, 2010 [11 favorites]


The usual counter to this is to quote research that, beyond a certain level required for comfort, more money doesn't make you happier.

True, but my point was that the "frugal, simple" lifestyle advocates are so busy touting how little stuff they have and how "free" and "clean" they feel at living this way that they're not stopping to consider all of the things money is providing, like the freedom to choose to have that kind of lifestyle.

They're like rich kids who run off to play homeless and fancy themselves the next Abbie Hoffman. They have a safety net that's protecting them from the actual stressors of a truly frugal existence.
posted by schroedinger at 1:00 PM on August 9, 2010 [7 favorites]


Books are an exception to the "No stuff" rule, right? Literal (ha!) tons of books that I may or may not live long enough to read, and that probably none of my children will want when I die? Because otherwise, no deal.
posted by No-sword at 1:00 PM on August 9, 2010 [3 favorites]


Me, I've got enough stuff. Now I'd like more time to enjoy it.
posted by ZenMasterThis at 1:00 PM on August 9, 2010 [3 favorites]


they're not stopping to consider all of the things money is providing, like the freedom to choose to have that kind of lifestyle.

I get you. I'm just noting that the usual formulation of this isn't that "money doesn't buy happiness", it's that "after a certain point, money doesn't buy happiness", which is a specific nod to meeting the basic needs and comforts. What I'm saying is that even if you confine your argument to that, it doesn't stand up.
posted by Durn Bronzefist at 1:02 PM on August 9, 2010


Total derail but from the title I thought this was going to be a post about Perl 6.
posted by spitefulcrow at 1:06 PM on August 9, 2010 [4 favorites]


"I get you. I'm just noting that the usual formulation of this isn't that "money doesn't buy happiness", it's that "after a certain point, money doesn't buy happiness",.."

Wan't there a thread on here about very rich people commiting suicide? And haven't there been studies done of people who won the lottery or lost limbs, and had highs and lows like that, and they found everyone has a sort of "natural" happiness level?

Also, how do you define "the basic needs and comforts"? and do you think people who have them covered are happy?
posted by marienbad at 1:12 PM on August 9, 2010


I'm reminded of the discussion about Real Simple magazine that sprang up in a post a few months ago. A lot of the simplification discussion is, as someone pointed out about the magazine, aspirational. If your life is too complicated and you feel owned by your stuff, the idea of ditching a bunch of it is appealing. But that's a problem limited to a particular (financial) demographic, not one we all have to worry about.
posted by immlass at 1:21 PM on August 9, 2010


Man I still want a money green leather sofa.
posted by 2bucksplus at 1:32 PM on August 9, 2010


I agree with those above who know that money can't buy happiness. It "can't buy me love" (as the Beatles put it many years ago) and it can't buy me perfect health.

On the other hand, it's great for buying whores and coke.

So chin up old bean, and let's have another huge sniffler right off Candy's gorgeous bronzed norks.
posted by the quidnunc kid at 1:34 PM on August 9, 2010 [5 favorites]


Money doesn't buy happiness. Poverty does buy misery.

For many, Poverty means not having a store nearby to by fresh produce at a fair price, or having lots of neighborhood violent crime, or having crappy schools. etc. Once you have a little financial freedom, your options start to improve. Bill Gates' kids will have their choice of schools, jobs, etc. Warren Buffett's kids probably won't worry about whether they can get their prescriptions filled. The Sultan's sons will have a lot of options, the daughters, not so much.
posted by theora55 at 1:39 PM on August 9, 2010 [3 favorites]


The renting vs. buying argument is a crock for just about anyone who doesn't live in CA, where the housing market is insane.

We own our house, paid it off in 15 years instead of thirty, thus cutting down a lot of the interest, and we get homestead exemption on top of the other tax benefits. This means we are automatically considered good credit risks, get cheaper auto insurance, etc.

Plus, you know, we have a house. That we built to our specifications. With neighbors we know and like. And pets. And no creepy landlord. Our kids grew up here. And we always have the option to take out loans against the equity, though we never have, in case we need to for college expenses or some kind of catastrophic health issue.
posted by misha at 1:46 PM on August 9, 2010 [2 favorites]


The renting vs. buying argument is a crock for just about anyone who doesn't live in CA, where the housing market is insane.

Or anyone who doesn't plan to have children; or anyone who likes a life of freedom and adventure and doesn't want to be tied down in some second rate burb for "only" 15 years; or anyone who doesn't feel that owning a house is an investment rather it is an anchor that at anytime can become a money pit from which there is no escape.
posted by 2bucksplus at 2:01 PM on August 9, 2010 [3 favorites]


I've got this theory that the secret to my personal happiness is a sum of money in the bank where I can live as I am right now on the interest, without needing to work any more.

(key word here is "needing")

Just having the ability to keep working, or not depending on my love for what I'm doing, would be incredibly liberating.

Now... trying to figure out a way of testing this theory... that has been the challenge thus far.
posted by quin at 2:21 PM on August 9, 2010 [1 favorite]


I'm just noting that the usual formulation of this isn't that "money doesn't buy happiness", it's that "after a certain point, money doesn't buy happiness", which is a specific nod to meeting the basic needs and comforts.

A further formulation would be that money has decreasing marginal utility; $20k to a millionaire is different than $20k to the person on food stamps. This is obviously not a revelation, but the reason it's so often brought up in articles like this is that people often grossly underestimate how quickly that marginal utility decreases. That's particularly problematic when obtaining that extra $10k, for example, involves new work responsibilities that eat into the above-mentioned family bonding.

The issue is not that "money doesn't buy happiness", but that people often over-estimate the contribution money will make to our actual well-being and thus may make trade-offs that don't make our lives better. Schroedinger's post does a great job of de-romanticizing frugality, but it doesn't necessarily mean the overarching themes of the article are wrong.
posted by Adam_S at 2:27 PM on August 9, 2010 [4 favorites]


Being Poor
posted by tippiedog at 3:08 PM on August 9, 2010 [5 favorites]


I was feeling it until the softly-lit photo of a hardwood floored apartment in Portland, with the simply (but elegantly) dressed white couple and the cat.

So basically, this is another NYT filler piece that could be subtitled 'UPSCALE WHITE FOLKS DO SOMETHING', like that piece last year about the couple who moved to Alaska.

This is nice, but the attached photo is more or less how the majority of everyone I know lived through grad school, residencies, or the first decades of the career. You know- frugally?

The nod to Stoic-branded simplicity seemed forced. Oh, some folks gave up their Le Creuset cookware. Fantastic. Let's make it some sort of philosophic statement.

What makes this interesting or new or relevant? It seems like a dispatch from a Bret Easton Ellis novel.
posted by mrdaneri at 4:28 PM on August 9, 2010


Happiness Is Earning $60,000 A Year?
posted by mrducts at 5:05 PM on August 9, 2010


I'll add that people thinking along these lines really should read Your Money Or Your Life

yeah, I agree, but I'm still waiting for them to revise and do something about that assumption that you're going to get about 6% interest on your savings account and average like 10% on investments.

Looking through my old bank statements, I see I was getting 4.85% on a cd in 2007 and I remember freaking out then about how interest rates were crashing. When we were saving to get married, back in 2000-2001, savings interest rates were around 6-7% and that was teh awesome. Now I'm getting between .05 and .25% on my Internet savings account and .1% at BoA.

Remind me again how I'm supposed to get ahead?
posted by toodleydoodley at 5:35 PM on August 9, 2010


savings increased to 6.5% this year and some experts think this is permanent

Because this time it's different.
posted by IndigoJones at 5:54 PM on August 9, 2010 [1 favorite]


True, but my point was that the "frugal, simple" lifestyle advocates are so busy touting how little stuff they have and how "free" and "clean" they feel at living this way that they're not stopping to consider all of the things money is providing, like the freedom to choose to have that kind of lifestyle.

They're like rich kids who run off to play homeless and fancy themselves the next Abbie Hoffman. They have a safety net that's protecting them from the actual stressors of a truly frugal existence.


That last sentence is so, so important. Almost every genuinely poor person I've ever met (not college student pretend poor, but genuine, multi-generational, broke-ass, live in a place with no opportunities poor) has kept their place stuffed full of, well, stuff. You can't afford to be minimalist because you need to keep that old shirt, those broken glasses, and those old party dresses in case you need them -- you know you can't afford to replace them, so you keep them piled in the corner.

That's one of the nicest things about having at least a little bit of money -- you can afford to not have stuff. If I really need something, I can go and buy it, so I don't need to keep extras stacked around my house. It's very freeing, and (in that unfair, contradictory kind of way) allows me to save money because I can have a smaller house since I'm not stuffing it full of crap.
posted by Forktine at 6:27 PM on August 9, 2010 [25 favorites]


That last sentence is so, so important. Almost every genuinely poor person I've ever met (not college student pretend poor, but genuine, multi-generational, broke-ass, live in a place with no opportunities poor) has kept their place stuffed full of, well, stuff. You can't afford to be minimalist because you need to keep that old shirt, those broken glasses, and those old party dresses in case you need them -- you know you can't afford to replace them, so you keep them piled in the corner.

Yes, this. The old office supplies, the boxes and junk you keep around, you may not have used them in the past six months but damn if it isn't hard to get rid of them. You remember the times all the times you haven't had to buy something because you just happened to hold onto it, unused, for years just in case that very situation of needing it came up.
posted by schroedinger at 8:19 PM on August 9, 2010 [1 favorite]


This is nice, but the attached photo is more or less how the majority of everyone I know lived through grad school, residencies, or the first decades of the career. You know- frugally? [...] Oh, some folks gave up their Le Creuset cookware. Fantastic. [...] What makes this interesting or new or relevant? It seems like a dispatch from a Bret Easton Ellis novel.

Perhaps I can explain.

Given that American households have around $852.6 billion in credit card debt and 43% of US households spend more than they earn each year and carry $8,000 in credit card debt one might think that not everyone is the US lives as frugally as perhaps would be wise. The statistics could give you the impression that American culture places a high value on material possessions, even if one has to take on debt to buy them.

What's more, total U.S. household debt, including mortgages and credit-card balances, fell 1.7% in 2009 to $13.5 trillion - the first annual drop since records began in 1945. One might get the impression that this idea of living frugally and reducing one's debts was catching on (although admittedly, that 1.7% drop includes debt written off due to bankruptcies and similar).

If there was a change in the actions of average Americans, if there was a trend of reducing one's debt burden at the expense of acquiring fewer material possessions, I can see how a journalist might see that as a noteworthy trend - and I can understand them illustrating such a change by looking at one couple's changing lifestyle, rather than just reporting on gross statistics.

Of course, another possible interpretation of the data is that that the reduction in consumer debt is a temporary blip due to bad debts being written off, that the couple described in the article are just outliers, and that the actions of average Americans will continue unchanged.
posted by Mike1024 at 3:46 AM on August 10, 2010


Yeah, the Your Money or Your Life book needs an update of the last section where they tell you how to acquire a steady income. But the first half to two-thirds of it, where you figure out exactly what your sweet spot is for money vs time spent earning it, is pretty damn great. It really helped me figure out how my career and mortgage and lifestyle could work together, because now I know what my minimum income has to be for me to be happy. More money would be nice, but I'm not willing to bust my arse to get it when I could kick back with a cheap beer and a book from the library.
posted by harriet vane at 5:55 AM on August 10, 2010 [4 favorites]


Well, I seem to be a bit of a hoarder, the proverbial draw of string pieces to short to be useful could exist here, but I earn above median income. It drives me crazy if I have to buy something I know I had stored back there under the paint cans.
Similarly, when I make that coat rack in 30 mins without needing a trip to the hardware store I am stoked.
There is plenty of frugal without eliminating possessions.
posted by bystander at 6:35 AM on August 10, 2010


We own our house....

You rent your house, and if you think I'm wrong, try not paying real estate taxes for a few years.

The rewards of house ownership are real, but different, from renting, and not necessarily financial. A woman wrote in the Financial Times recently about how she and her husband bought in Edinburgh even though she is convinced that the prices will continue to go down for the next few years.
posted by IndigoJones at 8:51 AM on August 10, 2010


It's not that they couldn't save money or that they lived beyond their means, but that they didn't earn a lot of money in their working years and now the cost of living today can be a little too much for them.

Not to be blunt, but: If the cost of living during your retirement is "a little too much" for you, then definitionally you lived beyond your means prior to your retirement. "Living within your means" includes planning for retirement (including the possibility of adverse financial events during your life, like inflation or medical expenses), and if that doesn't permit you to purchase the trappings of the middle class lifestyle you "deserve" during your working years, then that's too damn bad.

Saving for retirement is much, much harder than people think. It's so hard, in fact, that most people fail to face the facts until it's too late.
posted by gd779 at 10:54 AM on August 10, 2010


"Not to be blunt, but: If the cost of living during your retirement is "a little too much" for you, then definitionally you lived beyond your means prior to your retirement. "Living within your means" includes planning for retirement (including the possibility of adverse financial events during your life, like inflation or medical expenses), and if that doesn't permit you to purchase the trappings of the middle class lifestyle you "deserve" during your working years, then that's too damn bad.

Saving for retirement is much, much harder than people think"

it is much harder when companies and the government steal from pension funds

posted by marienbad at 2:45 PM on August 10, 2010


it is much harder when companies and the government steal from pension funds

Don't even get me started. I think that within the next few decades the various layers of the American government will respond to the growing fiscal crises in part by looting the pensions of public sector workers. That is theft and fraud, pure and simple, but it's likely where we'll let our politicians take us. I have nothing but sympathy for those who have lost or will lose the pensions they counted on.
posted by gd779 at 5:03 PM on August 10, 2010


That is theft and fraud, pure and simple, but it's likely where we'll let our politicians take us.

Chatting with a civil servant recently who noted that his union had gotten a three year contract with nice rises every year which they had to give back once the recession hit and revenue sank.

Not every government union is that rational. Moreover, I have to think that those entering into the more outrageous contracts (twenty years and out based on the final year's pumped-up-by-overtime salary) kind of knew that it would play out like this, and didn't care because it wouldn't blow up on their watch.

Even without looting, if the money ain't there, it will not be paid.

Fifty five in not the new sixty five. Seventy five is the new sixty five. At least for those able to hold on to a job.
posted by IndigoJones at 6:28 PM on August 10, 2010


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