I wanted to title this post, "Can you be friends with people in decidedly different financial situations than you?" but that wasn't very catchy. (And I know: some of you ARE rich!)
But I was reading the acclaimed recent novel, "The Interestings," with my writer's craft book group (we discuss books based on writing analytics rather than whether characters and stories are likable). The book's main character is just ordinary, with an ordinary job and ordinary talents. But Jules has some extraordinary ("interesting") friends, friends that she met long ago at a summer camp for the arts.
Because Jules hasn't pursued her art as a career, and she probably wouldn't have made a ton of money at it in any case, she often finds herself terribly envious of her friends that have; notably, her friends whose talents have made them a huge financial success. (The male half of the couple seems to be loosely modeled off Matt Groening; his animated series quickly becomes huge and he's rich within months of winning a network deal.)
I've been doing what I call "investment banking" for a friend's company (I say it that way because the work I do is almost definitely not what you probably think of when you hear the term), and I get this question almost every day:
"So, I guess you know a lot about investing!"
Well, I know more than perhaps most people about investing. But, again, it's not what you think; I'm not doing any research into public companies, and I'm never, ever picking stocks professionally. Most of the work I do is with deals that have closed long before or deals that are only imaginary.
People ask me, often, "So, you're an investment banker? What should I invest in?" My response isn't what they're expecting, even though I think it's the best advice:
We have all been there: standing in front of our closet or dresser drawers, looking at the contents, and waiting for something to emerge. That surprising dress or just-so shirt. That pair of pants that fits like it was tailored. That pair of shoes that is the sort of pair of shoes people refer to when they advise their friends to judge others on their shoes.
Once in a while, a surprising, just-so, tailored-seeming, universally impressive article of clothing appears, though rarely of its own volition. The rest of the time we just stare.
Maybe it's time to go shopping.
I was really excited about filing my taxes this year. For once, I wasn't really in need of any pricey things for the house (though I have plenty of wants. Hello, wood stove!), and was rubbing my hands together with the thought of the emergency savings fund I'd soon have in the bank account! Thanks to my husband's tax-free military pay, and my lowish freelance income when he's overseas and full-time caring for the boys, we are due a large refund again.
I had a lot of to-dos on my list last week, and the taxes had the biggest payoff, so I tackled them one late night after finishing two other little projects. I could make that week's e-filing cycle window if I got them done before morning, so I plunged on through, guessing at one number for which I couldn't find documentation. It was part of the mortgage interest, and I knew I probably wouldn't make the itemized deduction cutoff, so it wouldn't have any effect on my taxes, anyway.
My husband's school expenses were the only new thing to consider; he's taking online courses while he's deployed. I didn't think there would be much tax effect, but I dutifully added the numbers from the statement I had into the appropriate part of the online tax form. It was late, and I rushed. I just wanted to cross the to-do off my list. I could see that checking account cushion materializing before my eyes… submit! submit!
I was running last Sunday night. I had waited too long to start my run, and it was dark. I've taken to using my iPhone to track my runs, because I'm very motivated by the additive nature of all my runs over time. (I'm over 900 miles!) But I don't like to use the earbuds when running in the city, especially at night, because of the need to stay alert for those pesky fast cars; I want to make sure and come home to my kids. I had pulled the iPhone out of my pocket to see how many miles it had been when I went under a tree and over some roots and tripped over the dark, uneven sidewalk.
I went down, hard, and my iPhone flew out of my hand and facedown on the pavement, shattering the screen, bruising my hip, scraping my elbow and my hands. None of my injuries were bad, but I knew my iPhone would now need a total replacement (the backlight was already out, due to an encounter with a hornet near the edge of a lake this summer, so I have to tilt it toward the streetlights to see the numbers).
It would be $169, the Apple store representative had told me when I went in. I'd bought the iPhone outright, for work, so I could string together a very cheap pay-as-you-go plan based on my always-changing usage. I use it to sell magazine subscriptions and respond to last-minute editing questions and manage schedules when my children have those minor emergencies that children have. It's a need, and I'm going to have to spend the money.
I've been reading through some of my old posts and thinking about what I wanted for this, my very-end-of-the-year statement on money. And what I saw was a lot (a lot) of stress. It was appropriate, as I'd spent most of the day in a kind of crazy wound-up worked-up state, getting ready for what should be a lovely, restful retreat with a few friends from my writer's group.
Part of it was financial. I'd spent the week juggling money. I had plenty of money coming in, and I had even done a fairly good job of budgeting for once. But it was more than just the money going out -- it wasn't all coming in when I thought it would, and so some of it was going to have to wait to go out again. No big deal. It could work out in the end.
But I wasn't thinking, "no big deal."
I was thinking, whoa, Nellie! Oh no oh no oh no! I imagined what it would be like if that big check I wrote to a farmer bounced (it didn't). They would be so upset! And it would cost them. And it would cost me. And I'd be obliged to pay their fees, too, and then I would be out a hundred bucks or something more than I planned and maybe I would have to pay my babysitter late and…
Every year, I fail to really account for the cost of Christmas. "A few hundred dollars," I think, for gifts, and then by the first few days of December I've bought several pounds of butter, and lots of my favorite seasonal chocolate, and the big size of maple syrup because I'll be baking and pancake-making a lot this winter. And suddenly I've already spent a few hundred dollars, and not a gift among them.
And because my children are children, having grown up in a big extended family of good Christians who are totally O.K. with Santa, (and let me reiterate: a big family, with traditions including fat, stuffed stockings and gift-giving to aunts and uncles and cousins and grandparents, going to public school and occasionally coming across those toy ads in the circulars from department stores like the local Fred Meyer… ) well, they expect something. Like, a big something. They want their Christmas-morning minds blown.
I've done this to myself.
I've always looked at websites and apps that purport to solve your financial woes and set you on the path to fiscal happiness with skepticism. It's not that I think they're not useful; but I think that making charts and graphs and having the ability to Tweet your receipts is, while fun, not essential to financial health, and sometimes even a distraction. I think of this association as breast self-exams are to breast cancer: useful, even recommended, but not going to save you from getting breast cancer in the first place. At best, they're detectors, diagnostics.
That theme keeps repeating itself in my world of financial media, so I've been thinking deeply about it.
In a post on my financial relationship with my husband, for instance, I mentioned tracking my expenses. When he was home on leave at the end of October, he told me this was great. "Let's sit down with your list of expenses," he said, "and we'll go through it. I'll put a line through the ones I disagree with. Then we can discuss them."
"You need to keep your skills fresh," said a commenter in a recent post about the finances of parenting, referring to the concept of a mother staying at home with the kids. "In case of death or divorce.
I didn't argue, but I shook my head and rolled my eyes. (I do this to avoid leaving snappy replies to people's comments. Work with me.) I've long felt that combining one's finances with a potential, or existing, partner should be approached with the same attitude as the partnership. What point is there in marrying (or otherwise vowing your eternal love) if you don't think it has much chance of lasting?
Naturally, death is a part of life and should be considered as a possibility. But considering divorce when deciding whether a mother should stay home with her young babies, or which partner's career should be primary, seems counterproductive. My motto is, if you're so concerned about divorce that you don't think you'll make it through babyhood, perhaps you shouldn't be having babies.
I asked, as I sometimes do, what personal finance question my friends and Twitter followers had for me. It was a slow day on the internet and the responses flooded in.
My friend Neil asked, "what do you think about real estate?" A broad question, indeed, and I got him to clarify. "You know... should I buy a house? Why not just rent?"
Why not indeed.