Other people’s money

(Part 2, the sequel to Netflix and chill – and spend)

When last we saw our plucky hero, a colleague was commenting “You’re a single woman, you don’t have kids, you have lots of money – why don’t you have Netflix? It’s only $10 a month.”

Thus enough content for two blog posts was born. I pulled out my trusty soap box and got started.

soap box

From the outside looking in you have no clue about a person’s financial well-being. In fact, being single is more expensive than being married in so many ways there’s a term for it – we pay the single supplement. Plus there’s the lack of a safety net. (I’m paying 80% of the expenses I had when I was married but with 40% of the income.)

You cannot – CANNOT – tell from appearances what anyone’s financial situation is. You think everyone is doing better than you? Show me the proof, the cold hard numbers. Debt, stress, overspending, living beyond your means – we know they’re big problems in North America. The man with the flashy car and the huge house? The woman who drives a 10-year-old car and patches her clothes? You. Don’t. Know.

When the economy collapsed in 2008/2009, it revealed just how many of us were building our lifestyles on credit and debt. A decade later, the level of consumer debt for Canadians is climbing – an average of $22,837 per person, not including mortgages. That makes us vulnerable.

As The Millionaire Next Door discovered, it’s not the outward displays of wealth that mean you’re rich. People with higher incomes tend to spend more on status symbols, feeling the need to keep up appearances. There’s a difference between income and net worth. Unless you know the intimate details of someone’s financials, you can’t tell what’s really going on behind closed doors.

So stop judging. Stop comparing. Do the best you can, make the best choices, for you.

I’ve heard a lot of “oh it must be nice” and “you’re so lucky” from people who see the trips, the condo, the concerts, but apparently they don’t see the extra time I put into working, the savings I work hard to accumulate or the energy I put into learning so I can make better financial decisions. Plus there’s the whole greener-on-the-other-side thing. Why do I have to justify myself just to make you feel better about your own choices?

Answer is, I don’t.

Jughead and Betty would understand. They’re waiting for me in season two, which I’ll eventually watch – with or without Netflix.

Advertisements

In the news

Here’s a quick roundup of a few interesting things.

US Banks Finally Getting Sued for the Great Recession Crash

Remember back in 2008/2009 when the US banks lent people money to buy homes they couldn’t afford, then raised interest rates and foreclosed? Miami nearly went bankrupt — if people lose their homes they’re not paying property taxes. But no one went to jail because for years before the crisis the banks and other financial institutions changed the rules in their favour (deregulation). Now Miami is trying to sue the banks. This will be interesting. Read all about it in the Washington Post

Canadian Banks Overcharging Customers

Meanwhile here in Canada the big banks are turning themselves in, admitting they overcharge customers and paying them back. Here’s the key point in this article – it is just too hard for average people to figure out what’s going on with their money. Most of our financial information comes from people trying to sell us something, which makes unbiased decisions much more difficult. Read all about it on CBC

Hillary & Donald: It’s Almost Over

Finally, is anyone else out there waiting to see if election anxiety affects the markets? When people get nervous they start pulling their money out by selling off their stocks, which sends prices lower. That’s what I love about the whole financial and economic scene – it’s not about numbers, it’s about people, and whether they have hope or fear for the future. I won’t direct you to any article about the American election though; I think we’ve all had enough over the past 18 months.

Credit is like Spandex

Yesterday was tax day for me and I have mixed feelings. Usually I’m happy about paying taxes. I know, I know, I’m weird — but I’ve benefited from what my taxes pay for and I’m grateful. It’s also a great indication of how much money I’ve made.

Thanks to installment payments and lower income, I didn’t have to pay much for 2015. I’m trying to remember how stressed I was in 2014 when I was working seven days a week and a Big Personal Event happened that left me scrambling to find the time. Sure I made a lot more money, but it left me thinking about the whole work/life balance thing.

Oh, I’m self-employed, by the way. A lot of people think you have more free time when you work for yourself (as though you’re retired), but most self-employed people I know actually have less, because you’re working all the time.

I went to the bank to make the tax payments (I’m rather fond of the big PAID stamp they have) and while I was there I spoke to an advisor. I mentioned my next big project is saving up for an investment/income property. He told me that with my equity and good credit I wouldn’t need to save up, I could finance the whole thing through the bank. All I have to do is go in when I’m ready and they’ll pre-approve me.

Fully financing a second mortgage through a bank? Too Big to Fail started flashing through my brain. Credit is good, when used appropriately. But sometimes credit is like Spandex.

Just because you can get it, doesn’t mean you should use it.