Basu: The value of living within our means
by Rekha Basu on Dec. 19, 2008, under Edge, Opinion
Tucsonans hit Toys 'R' Us at East Broadway on Black Friday last month.
My late father used to tell a story about frugality that would have my sister and me rolling our eyes.
As a cash-strapped college student who had made his way from Calcutta to London, he walked seven miles every morning instead of riding the bus, to save money to buy a tie.
The story always ended with how that tie was more precious because of the effort and sacrifice invested in getting it. My father’s stories, with their tidy morals, had a way of coming up when my sister or I were clamoring for something.
Maybe it’s age, or the loss of him, or the changing shape of the economy, but I seem to be coming back to his morals lately. And feeling sorry I didn’t impart more of them to my kids.
This might be a bad time to talk about how excessively consumer-driven we’ve all become – what with Christmas coming, the economy in recession and retail businesses aching for sales.
Or maybe, with money tight as jobs, homes and life savings are evaporating, this is the best time to think about how and why we spend money, and the effect not just on our wallets but on our souls.
“We have all become children,” says Tahira Hira, Iowa State University personal finance and consumer economics professor. “We just point the finger and say we want that, and we just get that.”
For a lot of people, disposable income will be in short supply this holiday.
Judging by debt level, the size of our homes and cars, and even how we spend our spare time, our priorities have gotten out of whack.
We’ve moved steadily away from the lessons of thrift and saving our Depression-era parents learned. We caved in to the lure of easy credit (abetted by relentless credit-card solicitations) and the “buy now, pay later” philosophy. That, in turn, helped drive up everything from government deficits to personal debt.
“Businesses, individuals, households do it,” said Hira. “We all do it. Now its (cost) has been proven.”
About 60 percent of credit-card holders carry a balance, which is on average $9,000 to $10,000 per household, according to Tom Coates of Consumer Credit of Des Moines, Iowa.
Total credit-card debt has shot up from $100 billion to nearly $1 trillion in about 20 years. According to one estimate, a $1,000 charge will take almost 22 years to pay off, and cost more than $2,300 in interest if only minimum payments are made.
We shop for recreation, to make ourselves feel better, to plug in the holes in our lives, to demonstrate our love for each other. Many who didn’t grow up with a lot of money, and now have some, shower things on the next generation because they can.
The ads, the game shows, the Internet, all entice us to buy.
So did the Chicago Tribune in a recent editorial. It urged people to avoid the “doomsayer” scenarios, and go shopping, as a patriotic duty. I think it missed the point.
“If you don’t have the money to buy gifts,” urges Hira, “please don’t do it.”
The Tribune Co., by the way, declared bankruptcy later in the week.
The idea that by deferring payments, we could live beyond our means, helped lead to the foreclosure crisis. We’ve passed on to our children the sense that money has no value.
Not only does that encourage them to spend frivolously, but when lean times come, they haven’t learned resilience.
I don’t carry a credit-card balance, but I love shopping. It doesn’t matter whether it’s the department store, the drug store or a yard sale, whether I need the thing or not. I love a good deal. My closets are crammed embarrassingly full of clothes I never wear.
Whatever happened to window-shopping? asks Hira. The term has been wiped from our vocabulary.
“We sit overnight in the parking lot to buy something which the next day we will wait in line to return,” she says.
When it comes to holiday gift giving, people like me say we spend because we don’t have time to make, bake or provide a service. Yet we always seem to make time to shop.
The corrosive effect of all this on values became shockingly apparent on Black Friday, when a stampede of shoppers waiting to get into a sale at a Long Island, N.Y., Wal-Mart trampled a store clerk to death. Then customers got mad that the store was closing because of it.
Money is the No. 1 issue couples fight over, studies show. Yet studies also show our happiness level has little to do with how much we own.
This isn’t to suggest we cut out holiday spending, just that we be more purposeful about it. Think about books instead of the latest electronic gizmo for kids. (And when you’re shopping or eating out, support local stores and restaurants that are struggling to stay afloat.)
If you’re giving to someone who has plenty, think about making a donation in his or her honor, as a friend did on my birthday to a food pantry.
Being purposeful is what Michelle Obama is also doing by making plans to shield her kids from the sense of entitlement that being raised in the White House could bring. She will insist they continue to make their own beds and clean their own rooms.
Many religious and spiritual leaders make the point that Pastor Rick Warren of the Saddleback Church in Lake Forest, Calif., does. The author of “The Purpose Driven Life” and “The Meaning of Christmas,” says the best thing to do for one’s own soul is something for people who have it worse.
There are wonderful, meaningful ways to approach the holidays that demonstrate our interconnectedness without spending a fortune. Parties are just as much fun when they’re potlucks. For clothes, consider a “clothing exchange” with friends.
This year, my friends and I drew names so we would each give a gift to one other person rather than to everyone at our Christmas dinner.
And I’m resurrecting an old tradition of my mother’s: making rum balls to share with friends. They don’t even require cooking (see accompanying recipe).
As tough as these economic times are, Hira says there may actually be a silver lining. They may force us to be honest about our means and the need to live within them. And they could help us shift our priorities, to value what’s really important, like relationships.
Sounds like something my father would have said.
Rekha Basu is an editorial columnist for the Des Moines Register. E-mail: rbasu@dmreg.com.
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REKHA’S RUM BALLS
1 and one-half cups finely chopped toasted pecans, hazelnuts, walnuts or almonds
1 and one-quarter cups finely crushed vanilla wafers
one-half cup confectioners’ sugar
2 tablespoons unsweetened cocoa powder
2 tablespoons light corn syrup
one-quarter cup rum
Finely chop the nuts in a food processor and transfer to a large bowl.
Finely grind the vanilla wafers and mix with the nuts. Add the confectioners’ sugar and cocoa powder and stir until combined. Add the corn syrup and rum and mix well. Roll into 1-inch balls.
Garnish by rolling the balls in half a cup of cocoa or confectioners’ sugar, sifted.
If possible, store for several days in an airtight container before serving.
Makes about 3 dozen.
