Interviewing Gen X

Our relationship with money can change over time. We interpret its value on our life, if we are even aware of it, and then go forward to live our life. The impact of money means different things to different people. Everywhere you look on the web there are personal stories about people’s relationship with money. CNN has been publishing a long running story called “In their own words” about how changes in our economy affected people. I’m not particularly fond of these stories, even for merely entertainment value. They are far too sensationalist for my taste and just breed more fear and the impression that “the sky is falling”. In addition, something that seems to be severely lacking in these interviews – financial stories from Generation X or Y. Don’t these generations have a significant financial impact? After all, aren’t these the same people who are going to see the impact of the baby boom generation on their financial situation? Where are their stories?

Perhaps out of selfishness for my own intellectual curiosity, I want to see stories of how people in my own generation are dealing with money. Financial education is lacking in our country and lives. No one wants to talk about money. So I’m opening up the door and starting to tell those stories. My good friend Rachael over at Ms.MoneyPenny selflessly agreed to be interviewed as my first guinea pig. (Thanks Rachael!) Her unique and inspiring story follows….


Mrs. Common Cents - Let’s take a look back at the financial life of Rachael…what’s your financial philosophy?

Rachael - My philosophy has changed a great deal over the years. I grew up without any money, and parents that were pretty financially uneducated. My father was - and is still - a compulsive spender, raised by compulsive spenders. It made sense that I ended up the same way. I grew up believing that the object of having money was to get stuff that I wanted, and was completely utterly clueless about saving, planning or even why spending money on the necessities was more important than the things I wanted. Now my philosophy is that money is a tool that will eventually buy my freedom from spending my time in ways I don't enjoy. It's been a huge change, wanting time vs. stuff.

MCC - Has it always been this way? (Meaning, were you more of a spender and something changed, did you have some kind of eureka moment, or were you always kind of a saver?)

R - I had a moment. A few of them actually. I completely destroyed my credit by age 19 - I got credit cards, ran them up and couldn't pay them back. So I just didn't. I wasn't doing that to be irresponsible, I just saw no way out, so I stopped opening the envelopes.

I probably did myself a favor - I had to learn to live on cash after that. And I got into a relationship where I was the primary wage earner, and so I had to learn to be frugal. I bought a copy of 'The Complete Tightwad Gazette' by Amy Dacyczyn, and I started living it. Bulghur wheat and lentil burritos and all. But I kept us afloat during that period by washing out baggies and not buying things, and it really imprinted on me.

After that relationship ended, I got pretty spendy again. I blew through my savings, spent a ton on clothes and disposable purchases, had a credit card balance....but never truly forgot the lessons from my frugal days - I kept building my credit score, and even though I wasn't saving, I was in a manageable situation most of the time.

And over the years, watching myself on this financial roller coaster, I became fascinated with money and it's impacts on me and others. I began to see how warped and unhealthy my relationship with money was.

I'm more frugal now, and in a much better financial place, but my fascination with money and it's impacts on people's lives remains.

MCC - Describe your lifestyle and goals…what are your financial challenges?

R - My goal is to eventually be completely - even mortgage - debt free and able to downshift, or retire early. I haven't quite worked out how it's all going to flow, but that's where I want to end up, and not in 30 years. Far less.

The challenge for me is to find the right balance between planning for the future and living for today. Like today, I'm working late. I had to drive into work. And I had a really hard time taking the faster route, with a $3 toll, vs. the longer route, with no toll but more mileage. And I thought "I can see myself busting out the calculator here" to see which way was financially more sound. In the end, I took the faster route, but I'm not totally comfortable with that decision, I'd rather put the $3 elsewhere. I have difficulty spending money to save time.

MCC - What do you do differently than other people?

R - I think a fair amount. We make our coffee at home - almost always. Coffee out is a rare thing. We also pack our lunches pretty much every day, make breakfast at home. We've started a big vegetable garden, and planted fruit trees, raspberries, blackberries and strawberries. I'd like to be about 30% self-sustaining in 3 years from a food perspective.

Eating out is a treat for us - only 1-2x a month together, and then periodically with friends. I'm a good cook, and I love to try new recipes, so eating in is not a hardship.

We plan and save, and do everything in cash. If we can't pay cash for something, we don't do it. And our savings is as important to us as our daily expenses.

MCC - Do you feel pressure to compete financially with your peers? Why or why not?

R - Sometimes. It really depends on what reference group we're with. We have some peers in our lives with real, genuine wealth, and some that have almost literally nothing. Having grown up with very little, and a great deal of financial insecurity, I am sometimes boggled by the financial security others are able to take for granted - part of me still feels like a kid with my face pressed up against the glass in that regard.
But mostly my husband and I march to our own beat, and aren't too fussed about what others have. I wasn''t born with the ability to do that, but I've learned over the years that I'm happier that way.

MCC - Where do you see yourself in 10 years (or longer if you want to go into it)?

R - In 10 years, I'd like to put my downshift plan into effect, and get off the corporate treadmill. I'd like children, and I want to be around to get them off the school bus. I'd also like to be able to make a living from my writing. Mostly I just want to be happy.

MCC- What financial advice would you give yourself 10 years ago?

R - Oh, heck, I don't know. I could give myself lots, but if I hadn't been such a financial screw up, would I be in such a good place today? I don't know, I really don't. I think I learned so much from my mistakes....but it might have been nice to not always learn the hard way.

MCC - What are some tips you could offer for someone embarking on a financial turnaround?

R - Change your mind. Instead of thinking "I cut back because I have to", think "I am doing this so that I can acheive this goal". It makes leftovers and rabbit ears on the TV instead of expanded cable so much more appealing. At this point in my life, I have taught myself, slowly, over the years, to prefer pizza made at home on a Friday night to one we picked up. I genuinely like it better. Same with many frugal choices - I prefer them over the more expensive options.

Amy Dacyczyn wrote 5 words that have stuck with me for many many years. "Tightwaddery without creativity is deprivation". I'm not saying everyone has to become a card-carrying tightwad, but I think that living frugally and within ones means can be very very rewarding if you are willing to be creative and look at all options as equal, not some as less appealing than others.

If you are willing to change your mind.

MCC - How about some of your favorite money tips for dealing with the day to day?

1. Learn to cook. Let's say your average blog reader is 26, and the average life expectancy is 74 years. Most people eat 3 meals a day. That's 17,520 meals remaining in your life. Let's say the average purchased meal costs $6 per serving (some being cheap prepared food, others being more expensive) and the average homemade meal is $4 per serving.

Cook in and you save $35,000.00. $70,080.00 vs. $105,120.00. To me, that $35k is worth some trial and error in the kitchen. And you'll eat better.

2. Eat organic, local food - as much as you can. It tends to be a bit more expensive, but it's healthier, and it's better for the environment at large. Get to know your local farmers. You won't regret it.

3. Don't go shopping if you don't need something. I cannot go walk around a mall without finding something I never knew I needed. Chuck the catalogs and stay out of the stores, and every time you don't buy something you want, deposit that money into savings for a goal. You'll be amazed at how quickly it adds up.

4. Go for a walk. It's good for your body and your soul, and it doesn't cost a dime.

This is the first in a series of (hopefully) many interviews discovering the financial lives of the generations following the Baby Boomers. If you’d like to be considered for an interview, please send an email to ourcommoncents@gmail.com.