Wednesday, January 16, 2008

Money Story

Once upon a time, me and all my friends were in the same financial situation.

Scraping by living paycheck to paycheck, eating dinner at free appetizer happy hours, charging groceries on our credit cards because we were low on cash.

Back then – I’d say maybe as recently as 4 years ago – there was no shame in saying you were floating your rent check in the hopes that it wouldn’t be cashed until payday. Nobody threw down a debit card to pay for the whole table, saying “you get it next time.” And we certainly never heard each other talking about our tens of thousands of dollars in the bank.

I’m reminiscing about those times because, lately, I feel like my friends are all over the map when it comes to money.

Some have managed to save boatloads of it and demonstrate that by looking at $500,000 condos. Some have married into fortunes, allowing them annual exotic vacations, free cars and other big gifts. And then there are those on the other end of the spectrum, working two jobs and barely scraping by with enough left over to go out to dinner.

The disparity has made for some awkward situations, like New Year’s Eve, where some friends easily dropped $200 on a big party at The Drake, while others decided not to make it.

And, from a more personal perspective, it leaves me wondering where I stand. I managed the NYE ticket, but it was definitely an investment that forced me to watch my spending for the weeks before and after. I barely have a savings account. But I also don’t have credit card debt.

Does that make me normal? Or terrible with money? Or decent for my age?

I just have no idea.

It seems important to have some idea of where you stand financially, not just for your own security, but for knowing how you look in a relationship.

Would a guy consider me a liability because I don't come with a pool of cash? Should I be embarrassed to admit that I don't have more?

Or would the guy see fiscal potential in me since I have a pretty good job, I'm not paying off student loans and my parents are always there to spoil me?

I'd be curious to know what other single people consider "normal" when it comes to bank accounts for this age.

But maybe there is no such thing as normal anymore. Maybe after a certain age, we all create our own happily ever after.

9 comments:

Matt said...

Doesn't make you a liability unless your Credit Score is crap. You can always save money, but it takes a long time to fix your credit score.

I have a couple of friends that went to purchase a house with their new wife/husband only to find out that their combined score horrible. With the trend of married people keeping separate checking accounts, you better know and be honest with your credit score.

InFact said...

There's many angles to your current column and, thus, many ways to address comments.

One thought is "shallow" is the person who is attracted or repelled by the $$$-value of a potential dating partner/mate.

Then again, it's inevitable in our 30s to begin noticing differences.

After you've been through several relationships, you begin to realize there's choices.

You also start to notice the hitched people and their economic status.

For men like me, it was valuable to discover guys I met chose well-paying women as life partners.

More important "red flag" warning signs for me with a prospective woman date would be a person who either didn't care about making money or one whose credit card debt was substantial.

The reason: It's difficult today to buy a house and have a family, if both partners don't command a decent to good income.

Why make life difficult.

If a person is smart, funny, good-hearted, and decent looking, then it seems like a good idea to choose stable partner who has economic stability.

You don't learn that lesson in your 20s (sadly!).

Your Eyes Wide Open only begins (for most people) in their 30s.

InFact said...

Vikki:

#2 comment is below, BECAUSE.......

You posed the following questions in your current column (below) and I'll answer them because I assume they are not rhetorical:

Does that make me normal? Or terrible with money? Or decent for my age?

You have no savings at 34? Hmm, to be honest, that's sorta below average.

Then again, I wouldn't worry.

Now that you've got a great job, your best earning years are here.

Saving at least $10,000 per year to index mutual savings account should be your aim -- and, to be specific, you need to start a Roth IRA account now, if you haven't yet done so.

The best class I ever took post-grad school was an extension class that taught me the basic of "investing" $$ -- and what I learned could be summed up in one sentence:

Invest all extra $$ in low maintenance fee/low expense ratio mutual funds. That meant a visit to www.vanguard.com where its mix of diverse mutual funds offer the best chance to accrue $$$ over the long-term without trading.

Vikki, ask a guy friend or your Dad about these investing options, if you're not savvy yet.

Would a guy consider me a liability because I don't come with a pool of cash? Should I be embarrassed to admit that I don't have more?

Or would the guy see fiscal potential in me since I have a pretty good job, I'm not paying off student loans and my parents are always there to spoil me?

Errr, some of these questions are practical and others might be more appropriate for a therapist and you to consider.

In practical terms only from a no-nonsense man who judges you:

Yes, a woman with no savings at your age would raise the eyebrows of a duly employed man who is educated and possesses a good job.

I may be wrong, but most guys don't assess a woman's earning status and/or potential until they get into their 30s. Or: A guy cares about a woman's earning prowess, if he himself isn't doing that great or wishes to do better in the long-term.

Nonetheless, based on merely reading your column for a spell, and knowing about your fine character, I'd say you're a fine "catch," Vikki.

So I wouldn't worry if I were you!

You're a fine writer and journalist -- and have a lot going for 'ya........

Angela said...

Vikki,

You don't have to "ask a guy friend or your Dad" about how to invest. Girls know how to do this stuff too, and I bet that one of your girlfriends with Roth IRAs and a 401(k) would be happy to talk to you about her strategy. There's also mounds of information online. Suze Orman comes to mind, so does Jean Chatzky. Both are smart women who know a thing or two about money.

But I digress. While you may not talk dollar figures with your friends, you will find yourself increasingly talking about money with them. And you'll spend your 30s getting smarter about it. One thing I'm proud of is that I have no shame when it comes to telling my girlfriends that I can't do eight days in Aruba or have to pass on the hottest new (and expensive) restaurant in town. Especially with the volatility of today's market, I'd rather have a healthy rainy day fund to hold onto than fleeting memories of a pricey meal.

As for the dating situation, I find that men these days - the ones worth being around, that is - want to make sure that you have something to bring to the table. That means savings. That means a good job. That means a clear vision of what you're working toward and why. And if you can find those same qualities in a guy, you're off to a great start.

John said...

The people that size you up the first time or first several times you meet them in regards to financial means or employment, ....perhaps shouldn't be at the top of your list of associates...to put it kindly.
"What you do for a living" or "How much money do you have" aren't exactly things that would interest me in new friends, male or female. Sure, it's a nervous, don't know anything else to talk about ice breaker for those who lack depth, but again, wouldn't you rather associate with people who don't make that a topic of conversation until after you know them a little while? Those are people with more depth and interest to me.

Sure, financial independence and responsibilty are positives in life, and necessary when dating, however those things can always be improved. Find the people who don't make these things topics of conversation unless you ask them for some opinion, advice or assistance. Those are the ones worth your time, even if it takes many tries to find them.

Cheers,

John

InFact said...

Angela & John make good points and wise thoughts.

To wit:

When I was single, my antenna went up when the first question I received from a woman was "What do you do?"

Believe it or not, on a first date, a woman asked me how much money I earned per year.

Nonetheless, it's only human nature and the truth to acknowledge what Angela wrote about men is true:

".......(men) want to make sure that you have something to bring to the table. That means savings. That means a good job. That means a clear vision of what you're working toward and why."

Thomas said...

Not having any credit card debt makes you that much more attractive, in my opinion. You could have been like me, underpaid and overextended. I currently pay a thousand dollars a month on my credit cards. Fortunately I was able to stop using them, so the debt will be gone in a few years.

But yes, it's all over because some people choose to spend on things and some choose to save for what they really want.

There's a lot to be said for living small.

InFact said...

Credit card debt?

Oh my, I cannot say I feel your pain.

Lucky for me, one of the first lessons my Dad and Mom taught me in my teens was to not buy items for which you cannot pay
(i.e., never go in debt).

At 12-20% interest, I cannot imagine have a monthly overdue balance on a credit card.

Guess I'm lucky, as I simply use credit cards to accrue mileage for free trips and use them exclusively to do so.

At the end of the month, I pay off the $$ amount.

It's sad how the credit card companies have used advertising and psycho-babble angles to get credit cards into the hands of folks who sometimes cannot pay off the monthly balance.

In my opinion, our federal and state governments should have more regulations on the shady practices credit card companies have employed to exploit unknowing and naive consumers.

In fact, the only reason the credit card companies have a profit is due to the interest charges they collect.

1 packerfan said...

Vik,

I have to agree with John, if money comes up in the first few dates as an important issue, for me it would be a deal breaker...When I met my wife neither of us had anything...17 years later we have a very good combined income and three kids...what is important to us is the three kids...when I walk in the house and my 3 year old daughter runs to me and hugs me every night...that is important...my job will always be second to that. My money, which we have some, will always be second to that. Do I wish I had more money ...sure, is it important...no. Do I worry about anything...no...I work hard as do you. My ends meet and then some...I save money from every check for myself and each child...do I stress about it no...

Life as you are finding out is about choices...I would choose to have no money and work for minimum wage as long as I am happy. Money shouldn't be important and if I was dating again whether the woman had money or not wouldn't be important. Being a good person and being nice far outweighs the money question.

Finally, are you normal...probably, should you begin to save yes...like I told you last year (remember) have money sent directly from your check to a seperate savings account till you have enough to open an investment account (usually $500)once you have that much and if you set it up directly from either your check or the above mentioned account you can invest as little as $50/month. Do your research, read about investments and choose for yourself...ask your friends what they do... make mental notes and see how the things they do perform.

Good Luck Vikki

Im still Just Ed...miss your blog in the JS...Erika is pickin up the slack though...