Below rather than within...

I had a bit of a ... heated disagreement ... today with someone wanting me to edit a newsletter that talked, in part, about how the economy is better and Americans are recovering.  I argued against that position, not wanting to be even an editor to something that is not inherently true.

Recently, I read this article about a Pew study of the state of American household finances.  Honestly, I think the researchers missed the mark a bit, but I believe the conclusion that personal finances are fragile, at best, is true.

My house insurance has actually doubled in four years.  I find that hard to swallow, much less the rather significant increases in medical expenses across the board, co-pays, care, premiums, and prescriptions alike.  My sister's best insurance plan for a national company has an individual deductible of three thousand dollars.  I am flabbergasted.  Even my worst health insurance coverage never had an out-of-pocket deductible greater than $500.  Her family deductible is $6,000, but that, too, is no real help.  Who has $3,000 of out-of-pocket money before coverage kicks in on top of the increased premiums??

I get a tad irritated when folk assume I'm just peachy with Medicare. For one, Medicare is not insurance.  And, not being a senior, I am barred from getting the supplemental policies that help with the coverage gaps.  Did you know that Medicare only pays for a single pair of glasses and only if you've had cateract surgery?  Vision is not important.  Cholesteral screenings are covered only once every three years, despite the fact that cardiac disease is the leading cause of death among women, greater than all cancer deaths combined.  It's nuts.  And it is a much more expensive jar of nuts than even two and a half years ago when I started Medicare.

These cost of living expenses outpacing earnings is part of the Pew study.  Part of what I disagreed with, however, is the line:  "Still, Americans aren't necessarily spending their money on fripperies. Pew found that spending on housing, health care, insurance and pensions rose, while spending on non-essentials such as food and entertainment decreased or stayed flat compared with other areas."

Really, you need a bit of clarity on how food is a non-essential.  However, food prices have increased, so I am not sure how spending on groceries can decrease or stay flat.  What I could see was if the spending on eating out decreased or stayed flat.

I also cannot see how spending on entertainment decreased or stayed flat, unless the cost of internet, cable, and electronic devices were not included in that line item.  Because, really, those costs have also risen.  And Americans have no problem spending money on those items even when budgets are inadequate for them.

So, really, what I think should more clearly be defined is "fripperies."  After all, how was agreement reached on what is "tawdry" or "frivolous"?  In a country where, in 2006, we reached the point where the average home had more televisions than people, I highly suspect that a whole chunk of American spending is still on what legitimately could be categorized as non-essentials, but fripperies???

The strongest part of the study addresses housing, especially the bit where pointing out that folk are spending closer to 40% of their income rather than 30% on housing.  However, that really is rent and mortgage.  It does not take into account home repairs, home maintenance, and insurance.  The president keeps pushing the "American Dream" of homeownership and does not really go into the fact that owning a home has its own costs.  Plus, rents have skyrocketed during the recession and have not come back down.  Even before the recession, in cities the problem of multiple families in a single apartment was a growing problem.  Housing has most definitely not recovered.

To me, I would like to see a study looking at the concepts of financial literacy and fiscal responsibility.  Americans are clearly undereducated in the former area and are not that good at practicing the latter.  The focus, at best, is to live within your means—not that the federal government has any concept of such restraint—yet really the genuine need is for folk to learn to live beneath their means.  We are not a nation of savers.  As the Pew study points out, even seeing the devastating effects of not having adequate savings, we remain a nation of non-savers.  We spend-first-and-think-of-saving-later.  But when does the "later" come?

I started another small savings account this month.  One for Amos.  I have his food, heartworm medicine, vaccines, license, and annual exam budgeted.  I have budgeted for his "maintenance." However, I do not have any funds budgets or saved specifically for his "repair."  For example, Becky's dog just needed surgery.  I want to be prepared for any unforeseen Amos repairs.

Only, well, it feels like my slivers of pie are getting awfully small. Really, the grocery/household items budget line is the only real place for savings, but I have eked out a bit from my utilities.  I've even stopped apologizing to folk who stop by and leave their coats on.  Really, 60 degrees is not too cold for winter clothing.  Through trial and error, that is the point on my thermostat where I save money on my heating bill.  Below 60, the heat runs too long to catch up.

I actually started two small savings accounts, one for Amos' repairs and one for home repairs.  Like I wrote before, I cannot fathom anything breaking, given all the shoring up I've done, but it is better to be safe than sorry.  I know that I can just take funds from my main savings account, but I am trying to move in a positive direction, rather than a negative one.  Some way, somehow, I am bound and determined to end the year having lived below the rather meager disability income and added to savings, both in all those little ongoing savings accounts from which I can then take out funds for payment (such as the real estate tax savings account) and in my main one.

If I can manage to do that, manage to live below my means for 2015, come next December, I am most definitely going to treat myself to one of those amazing-but-not-economical fillet mignon steaks at Baker Street.

One of the reasons this is on my mind is that I read an article about the Greek election.  The guy who won its "presidency" did by declaring that he would get the country's debt written off rather than continue with the austerity measures its creditors demanded.  Now, I am not any sort of economic expert as to know whether or not the austerity measures would help, but I do find it rather arrogant to make promises that you will get others to write off your country's death without any sort of discussion with those creditors.

It seems America is not alone in thinking that personal responsibility for its government's spending is not necessary.  I just don't get that. I don't get how we, as a nation, can continue to elect officials at all levels who spend recklessly, spend beyond means, and rarely consider operating beneath means.  I don't get how a man can promise an entire country he would, essentially, get its debt substantially written off.  Basically, someone else should pay.

How?
How does that make any sense at all?

This whole plan for free college?  Well, that irks me.  I mean, you do not have to graduate with thousands and thousands and thousands of dollars of debt.  You can take advantage of community college and in-state tuition and actually work whilst earning your education.  Plus, any taking on of debt should be in proportion to ability to re-pay given average salary of your chosen profession.  I mean, if banks set limits on the amount of a mortgage based an assessment of property value, why do school loan programs not do the same by major and/or future earning capacity?  I believe that students can learn to learn, can learn to be better at learning.  However, if you spend $60,000 getting an undergraduate teaching degree, you will struggle greatly to repay that loan on the average teacher salary.

Where?
Where has common sense gone?

Of course, to be fair, I am still dreaming and scheming to figure out a way to shave enough pennies off of something so that I can get a small bistro set for the airing porch.  So, where is my common sense??  When I say I want to live below my means, just how do I measure (define) what is "below"?

What fripperies do I still have in my spending?  Too many, I fear.  Perhaps I should seek the consultation of those austerity experts who've suddenly lost their "jobs" in Greece, eh?