Monday, April 25, 2011

U is for Unemployed

We are always hearing about the unemployment rate skyrocketing, about folks losing their houses and cars, and about the economy being in the dumps. I’m definitely not here to tell you I disagree with that, but I would like to talk about living below your means, something I very, very rarely see.

If Person X makes $50k a year, and can afford exactly $3,500 a month in expenses, why oh why would that person seek out things which ensure their bills are $3,500 a month? If the maximum mortgage that someone can possibly pay and still keep breathing is $1,800 a month, they should seek to purchase a house which would allow them to pay far below that. Why? Because shit hits the fan, that’s why.

I am always very impressed with people who plan a little bit, or make smart decisions, because I don’t see it very often. I see people living at or just above their means, struggling constantly to make ends meet. These same people are always saying how they are stressed out and that bills are swamping them and that life isn’t fair. What? If you want to put on the air of success to yourself and others, you’d better bring home the successful paychecks, as well.

Of course, we have the people who match the theme of today’s blog post who acquire a bunch of neat stuff and then lose their job. Now they have to basically sell the life they were used to, and are forced to live more simply. The Escalade goes back to the dealership in favor of the economy car they probably should have been driving in the first place. The house goes to a short sale and big money is lost, forcing them to move into the much more moderate house they should have been living in the whole time. The jet skis go, the Harley goes, the dirt bikes go.

Now, I’m not saying that you shouldn’t purchase cool and fun things and make the best of life, but I’m saying that as a member of middle-class America, you don’t need to drive a BMW and hit Starbucks three times a day. That is what we call a Yuppie. Do you want to know a secret? The folks who make real money see a Yuppie coming a mile away, and have zero respect for them. You aren’t fooling anyone in your 3-series BMW that looks like a Nissan Sentra with a different logo. The investor who drives a big, black 7-series Beemer isn’t even acknowledging you exist, so why play the game? You’ll only pay for it later when the unemployment monster knocks on your door.

I have designed my life so that if I were to lose every bit of income I receive, I could still float by for a year easy, maybe more, and even a slight, part-time income will get me out of a hole. I live below my means, and still manage to have a ton of fun. If the unemployment monster rears its ugly head at me, I’ll be ready.


Dan said...

Right on bro good message. I need to do some tuning to my life still but that unemployment monster sucks!

Eliza said...

I was carefully forming a response, especially re: the term yuppies. I stumbled upon a blog by the God known as Christopher Walken and decided to share that intead. Oh, and a couple of jokes too. Mostly because anything I have to say on the subject of people living beyond their means might be overtly offensive to some people. So here is Mr. Walken:

What is a yuppie? Perhaps this joke will help illustrate what a yuppie is.

A yuppie parks his new BMW at the curb and opens the door.
As he opens the door, a large truck tears the door and his left arm off.
In shock he looks the car and cries "My BMW, my BMW."
A good Samaritan comes to his aid, and says "Sir you have to sit down, and let me help you, you arm has been torn off."
The yuppie looks at where his arm was and screams

People that are more concerned about the label rather than the function are yuppies.

What's a SITCOM?

Single Income, Two Children, Oppressive Mortgage.

What Yuppies get into when they have children and one of them stops working to stay home with the kids.

Bethy B said...

I agree with you! I come from a family have farmers who were used to living below their means and saving. My father instilled that in each of his kids and that has created us all to be very future orientated and big savers. :)

L.L. Woodard said...

Ah, I wish I had the means to become a Yuppie, but shun that lifestyle.

Marie Anne said...

Derek, I think I love you. No, I KNOW I love you.

Karen B said...

Yep, I've often thought the same of some of the people I know. I see them spending more than they earn and wonder why the "Jones'" even need to be kept up with. lol

Renata Yvonne said...

One of the best posts I've read in a loooong time!

R. Elizabeth C. Kitchen said...

One million percent agree. I drive a 1996 Chrysler Sebring convertible. Paid cash for her. I refused to have car payments, so I spent a little time saving and searching and when I found the car I negotiated and got it for about a grand less than the seller wanted.

I am also a saver. Quite meticulously. I have my savings in categories. For example, savings put aside for car repairs, savings for vet costs, savings for emergency medical costs, savings for emergency home repairs, etc.

I am only 27, but I fancy myself quite responsible. I don't go on shopping sprees, but I have nice things. I live below my means, but I have what I need. I don't buy the latest gadgets because A) I don't need them and B) I don't have the time to learn to use them anyway. I find much more pleasure in saving than spending.

I'm a full-time freelancer and this business is unpredictable. In the last few years, I have set myself up to where I could live comfortably for 1.5 years if every client went away tomorrow. I already have it planned out where I would make cuts, such as cable. Cable is a luxury I can afford now, but would be gone in a heartbeat if anything happened to my income.

I grew up poor and while it sucked at times, I am thankful for it because I learned how to survive and how to appreciate the little things. I can entertain myself more with a cheap box of crayons and a piece of paper than I can with a TV with 100 channels. My parents also instilled an incredible work ethic in me that I am thankful for.

I am going to link to this on my personal blog (if you don't mind?). This is something everyone needs to hear!

Derek Odom said...

Absolutely! Thanks so much for reading. :)

Anonymous said...

Brilliant! I've never understood shopping for recreation.

I’m A-Z Blogging and my “U” post is right here.

DeusExLibrus said...

I'm with you on the living below your means shtick. I can't help but think we'd all be better off if we glorified that mindset instead of pushing the idea that you had to go into crushing debt and manage your money poorly to be happy. That said, I still struggle with this. There are definitely months that I have a credit card bill that I don't need if you know what I mean.

Derek Odom said...

Hehe, I've never even had a credit card. Not once. Everything I've ever owned I've owned outright. Weird, eh?

DeusExLibrus said...

Considering the standard American PoV, yeah. I guess the difference is I'm careful to pay it off every month. Still, the temptation is there.