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Sick to death of saving
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Tess Vigeland: Of course, while we focus on savings next week, the president would much rather you went shopping. To save the economy, of course. That message is music of the ears of Zo Webster. She wrote to tell us that she's been a saver all her life. And she's sick of it.
Zo Webster: My sister and I were "lucky" enough to have had an accountant father who indoctrinated us with what we fondly refer to as "Wayne 101" -- or for those of you not in the Webster family, the basics of saving money and not spending more than you have.
So for years, I scrimped, rarely ate out, drove old cars, brought my lunch to work and always made sure I had enough money to pay my bills.
But I am done being frugal. The breaking point came not long ago when I checked my retirement funds and realized I could have contributed nothing to them for the last decade and been right where I am today. All that money I put into the funds plus all the fees they charged me could have been spent on pedicures and facials. I could have taken fancy vacations like all the bankers and brokers who get million-dollar bonuses. I didn't buy a house I couldn't afford. I didn't take out a loan on the monstrous equity in my home. I did what Wayne 101 suggested I do, but gained nothing tangible from it.
But no more. Spending the money seems like a better idea than sending it to Wall Street where they spend my money on cars, cruises and whatever fun I've been skipping. Now I'm paying other people to paint my toenails. I buy soda that is not on sale. I eat out a lot more often and when I do, order a glass of wine instead of waiting till I get home to have one. After watching TV sizes grow for a decade, I traded in my old 30-inch cathode ray tube set for a 55-inch LED TV with satellite and a DVR. And I threw in a Wii.
Heck, I'm ready to buy a new car if I could only find one that matched the gas mileage of my current vehicle. Oops -- there's that frugality again. Undoing years of scrimping is hard.
Vigeland: Zo Webster is a physics instructor at the North Carolina School of Science and Mathematics.
Okay, I agree: this financial crisis has taught us that saving and investing are stupid. Just ways to give our money to Wall Street to take as their own compensation and loan it to people who never intend to pay it back. Ms. Webster is absolutely right.
But. Since saving and investing were the ways to prepare for future needs, like college for our kids or our own retirement, how are we supposed to fund those eventualities now? One can't borrow money to fund one's own retirement. Perhaps Wall Street expects to make a bundle off student loans to our kids, but graduating from college with enormous debt and no job prospects is (arguably) even more stupid than saving and investing.
Wall Street was very clever to transfer so much wealth from our futures to their present. They turned it into fantastic houses, cars, and parties. But we and our kids are stuck with an impoverished future and simply ceasing to save and invest won't fix that. Of course, continuing to save and invest won't fix that, either.
This is why there's still so much hatred of Wall Street out here in the hinterlands: They didn't just steal money, they stole the futures of millions of actual people, dooming us to real physical suffering. Sure, we can (maybe) work till we drop and then survive on cat food. But seeing my kids consigned to a life of menial labor because the 529s have enough for maybe two years of college but certainly not four makes me physically ill. Bankers' ability to not only countenance this kind of thing but pay themselves enormous bonuses for causing it and perpetuating it is indescribably infuriating.
We're close enough to college and retirement that I'm not going Ms. Webster's route; I'm continuing to save and invest, stupid though that is. Nothing will work, so it doesn't matter what I do. And I'm so used to living frugally that I probably wouldn't know how to spend the money anyway.
I've told our kids that we tried to do the right thing by saving money to prepare for future needs, but it simply didn't work: even over a long period of time, the money didn't grow. I won't tell them not to save and invest, but they can see for themselves what works and what doesn't.
Zo,
Wow, I can relate to your story. I was raised by a similarly oriented CPA father. It's amazing to give yourself permission to get the things you want (within reason, of course). I'm driving an 11 year-old car, luckily it's still running well, but I can't wait for the day it dies so I can get something new and maybe even something a little more expensive than I thought!
Very interesting but my life is bad enough without being reminded how much my retirement plan has suffered. It would have been OK 10 years ago when i had 10 years before retirement. You should have issued a spoiler alert so I could continue pretending how smart I was putting my money into my retirement and not into all the things i wanted to buy. Sometimes, ignorance is bliss, or better in my case, trying to forget the past is bliss. That way, i remain not ignorant, only poor. Now I am poor and depressed and probably ignorant all over again (even though i enjoyed the commentary a lot).
