More Observations on Money

Or perhaps I should say on poor people and how they handle money. Or not even necessarily “poor” in the sense of underemployed, but poor in the sense of never having assets or a savings account no matter how much money they make.

I know many, many people in this category. It’s safe to say that 90% of the people we know are in this category, sadly.

Despite our current situation of me having almost no work and Nick being VERY underpaid, we are still doing well in our savings and investments. Granted, the unemployment I’m getting has been a BIG BIG help, but we’ve put that money to use in our investments and upgrading some things that needed upgrade in our house. We’re also going to take a big vacay (well, 5 days, which is big for us) and we’re buying some stuff for the games gig, too.

But even before the pandemic, we managed pretty well with the little scratch we had.

We talk about this often. We take risks with money – usually BIG ONES – but we also make sure that what we have works for us. We are also tighter than two coats of paint when it comes to big purchases. We plan ahead and we SHOP for deals. We also buy ahead if we find excellent deals on things we know we’ll need eventually. My chest freezer is full of protein that I get on sale, for instance. I rarely pay full price for proteins! That chest freezer ($175) has paid for itself a dozen times over in what I’ve saved!

We see our friends constantly broke and struggling, yet they pay full price for most things – INCLUDING big ticket items, where savings are significant if you’ll just SHOP. Appliances, cars and houses are the biggest expenses for most people. With planning, most of these expenses can be shopped for to get the best deal. Of course there’s always shit that breaks, but that goes to having SAVINGS for shit that happens.

Let’s take appliances first. If you know you’ll need a new big ticket appliance, then get on the phone and call around. There are myriad off price places to get deals! Look around your area and you’ll find tons of little off price stores. Of course there’s American Freight (prev. Sears Outlet) and BrandSmart, but look for scratch and dent and don’t rule out USED! We got our Bosch (the BEST) dishwasher used, probably about 10 years ago at this point. It was $300 (retail is around $800) and the only thing we’ve done was replace the control panel ($95) a few years ago. Our washer and dryer was purchased new at the Sears outlet in 04, $800 for the pair. The washer died after about 10 years (about right for front loader) and we replaced it with another similar model for $495 in 2014. How do I know? I kept the receipt. Another thing people do NOT do that drives me crazy.

Now let’s look at cars. Automobiles are probably the biggest item that Americans waste money on. I see this EVERY DAY. Americans will buy new cars rather than used and they’ll pay whatever the sticker says. LOL!! This is the dumbest thing in the world. But Americans’ lack of will to do the work and get a deal has resulted in CarMax and the other places that slap a price on a car, and that is what you pay. It’s billed as a positive thing: “No dickering! No high pressure sales!” They are basically saying “Trust US! We’ll give you the best deal!!” LOL again. They absolutely DO NOT give you the best deal. They give you RETAIL prices for used cars. And Americans lap it up. Sigh. It never ceases to amaze me how much people will pay for a car and how much they DO NOT pay attention to the financing or overall cost. If you get a new car and finance it for six years, you’ll pay about as much in interest as you will for the car that you’ve already paid too much for. It’s simple math. But MATH??!! OMG, NO! We don’t want to do MATH!! I see poor people buying new cars all the time. They pay full price, get a high interest loan for six years and lose about 20% of the value of the vehicle when they drive off the lot. How is this smart? It is not. But it’s QUICK!! So people sign on the dotted line and never think twice about the actual costs. This is why people stay poor.

Houses are another boondoggle that people feel the need to do. First of all, buying a house is NOT the panacea that it’s made out to be. Yep, your credit will go up, but you’ll also be house poor with all the constant repairs you’ll be making. We see this all the time. The “American Dream” of home ownership is overblown and a LIE. I see people who have umpteen roommates to pay the mortgage and are STILL broke. Why? Because they don’t manage their money, they have no savings and they waste 25% of their income on stupid shit like interest and buying shit at full price.

Overall, it’s the lack of patience that poor people have to take the time to find bargains and save money. In my observations, poor people tend to be impatient with the ways of money and they tend to NOT want to deal with it, which means they are not interested in calculating interest or finding deals or using a coupon. I think this comes from the constant stress of living paycheck to paycheck. I mean, I totally understand that most people do live paycheck to paycheck. But I also think that being unable or unwilling to choose wisely when it comes to spending is a big part of it.

For instance, we choose to forgo expensive health insurance, because we’d rather have a fat savings account. We’ve proven that when shit happens (see Nick’s hand incident from 2019), you WILL BE FINE without insurance. We paid nothing. We also buy used vehicles ONLY. We shop and we find deals. The Ranger was a fair deal from a wholesaler and Romeo was a good deal from a dealership lot. But these deals did not fall in my lap, I SHOPPED. I called every car lot in town looking for Romeo! I scoured the internet! I worked for it. And I got a racehorse deal on the exact car I wanted. It took me about a month. NOW, granted, we could get by with one vehicle and a friend lent me his spare vehicle, and I understand most people can’t go without for that long. BUT. Even renting a car or using Uber every day would have been economical for the deal I got. I saved thousands! We financed because this was BEFORE the pub debacle, but my rate was 2.89%, I think. (We paid it off before the bankruptcy from the pub.) What I did not do was panic and run to CarMax and pay whatever they wanted. DO. NOT. PANIC.

I also use coupons for groceries, wait for % off coupons at Vitacost, use Rakuten for cash back, buy protein on sale, buy in bulk when I find a deal and just keep my eyes peeled for bargains. We also never pay full price for technology. We buy all our Apple gear from eBay, unless a good deal is found elsewhere. Boost was offering the iPhone SE2 for $250, so we jumped on that with both feet. That is less than an open box on eBay! We pay a little too much for our cell plans ($35 each) but we’re not motivated to change for $5-10. But I was tempted by Xfinity’s mobile deal for a second. ;)

We monitor all expenses. We keep receipts. Basically, we run the house like a business and you know what? IT IS WORTH IT. Our efforts are why we can live WAY above our pay grade. Nick is underemployed as am I. Yet, we have a nice house, solid cars and fat savings and investments. We do this by being frugal and making good choices with our money. This is also how we rebounded from losing about $160k on the Pub. We’d made the money back before the pandemic. The bankruptcy fucked our credit, but our ACTUAL money situation is very good. Fuck Experian and the rest of them. They only see what they want to see. Which is a whole ‘nother rant, for another day.

Lack of patience and panic are the two characteristics I see most commonly from poor people. What they don’t get is that their lack of patience and planning is WHY they get panicked when shit happens. It’s a vicious circle.

You got two choices in this life: control it or be controlled. We control it – for the most part. When we roll the dice, we KNOW we are rolling the dice. Even when we get snake eyes, like the pub, we can recover because we are mentally tough and we know that it’s only money. Money can be made again and controlled. Poor people tend to be controlled by money. They don’t budget, they look at the bank account and spend accordingly. Which is why they run out of money regularly. Lack of planning and lack of WILL to control their situation. We don’t have a physical budget, because we’ve run our lives like a business for so long, we can manage intuitively. But we are the exception. MOST PEOPLE NEED A BUDGET. A physical one, with numbers and shit. I really wish I could help my friends with this, but they are not interested in the work it takes. It saddens me to see them struggle, but it’s not like I don’t TRY to help. I do. I offer to make budgets and help them shop for big ticket items. But for the most part, my efforts fall upon deaf ears and they continue to be controlled rather than be IN control. They panic and pay whatever is asked. They overpay for things and every dollar overpaid is a dollar NOT in savings.

To each his own, I guess. It just bothers me that SO MANY people could be in better shape if they’d slow down and do the work. Sigh. It’s endemic of our times. People have zero patience and want everything quick without effort. It is usually worth the effort. Trust me, we are living proof that our methods work. I wish much luck to all our struggling friends. Change your mind, change your life. It’s not just a slogan. Thank you for coming to my Ted Talk! :)