I keep reading that huge numbers of people in different age groups have no savings. Zero savings. Not so much as a penny in savings. I want to share that I get this, intimately. I recall having to spend my “lucky dollar” coin to take the bus to work. I’ve gone to bed without dinner many times, walked four miles with a suitcase because I didn’t have bus fare, and sold personal items to pay for my marriage license. I also want to say that I know how to save a fairly significant amount of money out of a stupidly low wage.
Why do I attribute the word “stupidly” to a low wage? Because when wages are low, people have nothing to spend, which means they’re not raising GDP or creating jobs. I paid over 40% of my income in rent for much of the period between age 18 and age 30. What did my landlords do with the money? My guess is that they used it to buy more rental properties, which is exactly what I would do, so it’s not like I blame them. Frugality is a very particular type of economic message that, if widespread, would lead to very particular results across the economy. But I digress.
I started out working part-time at a convenience store and earning the Oregon minimum wage, which was $4.75 per hour in 1993. I earned $300 a month and my rent was $300 a month. I would put snacks on my tab at work when I occasionally got too hungry, a primitive form of credit. I did not get an employee discount. My boss suddenly showed up one day and presented my bill for the month, which, sadly, ate up almost my entire paycheck that week. Due to drama, I commuted on the bus over two hours each way - for a 4-6 hour shift. Clearly this was not going to work.
This situation lasted only about two months, and it was over 20 years ago, but it feels like I can remember every minute of every shift. I could still draw the layout of the store and tell you which items were on which aisles.
I got a full-time job as an office temp. Suddenly my income tripled!
There is nothing quite like tripling your income from one week to the next to make you relax about money worries.
I was making $7.00 an hour and getting a solid 40 hours a week, unlike the convenience store job, where my schedule was constantly being changed and my hours were continually whittled away, until I could barely get sixteen, mostly on weekends.
I netted about $220 per paycheck. As it happens, my mom worked in the same building, and we were members of the same credit union. We would ride the bus up the street together to deposit our paychecks. This was fortunate for me, because I was still young enough that parental command tones worked on me. Mom told me that I could afford to save $50 per week, so I shrugged and did it.
I could also easily have SPENT that $50 per week. I never would have noticed and I never would have been able to explain where it went. In 1993 we had to pay for such things as video rentals and compact discs if we wanted entertainment. Probably that’s where my savings would have gone: to clothes and lunches and magazines and movie rentals and music and funny trinkets and posters and concerts. If I’d had a car most of it would have gone into my gas tank, insurance, etc. Instead I saved it.
That money wound up being about exactly enough to pay for my plane ticket when I decided to go to New Zealand the next year.
When I came back, my circumstances changed. For a series of [drama] I fell out of the savings habit. I didn’t have access to credit, so at least I wasn’t able to run up any debt. I started saving again during my first marriage, and that was the money I lived on between my divorce and going back for my degree.
How was I able to save nearly a quarter of my net income at 18 years old?
It started with the feeling that I was really lucky to have such a great job (making photocopies as an office temp) and that I was doing better than bare-bones survival. Seven dollars an hour and weekends off gave me a feeling of natural abundance.
I lived on a cash basis because that’s how I grew up. My parents often talked about the dangers of credit and all the ways that debt could destroy you. As a result, I never had to pay finance charges or over-limit fees. (The fact that I was denied credit when I finally applied is also relevant).
I didn’t have a student loan. I wish I’d been in school at the time, because compared to what I wound up paying a few years later, tuition was dirt cheap. Only after I got my degree was I able to land a middle-class job.
I rented a room in a house with three other people. My rent was $300 a month, which was roughly on target, and I split utility expenses. I did not own a car. I didn’t pay for cable, I didn’t have any substance habits like caffeine, alcohol, or nicotine, and I spent basically nothing on clothes, beauty treatments, or entertainment. I did not experience these things as hardships or scarcity. What I liked to do at the time was to chat on IRC (before the “Information Superhighway” had a name) and to read library books. I lived cheaply and it felt like I was living richly.
In many ways, I live the same lifestyle now that I did over half a lifetime ago. I didn’t own a car then and I don’t own a car now. I didn’t drink coffee or alcohol then and I still don’t today. I didn’t dye my hair then and I don’t now either. I bought my clothes at thrift stores then, and that’s a habit I’ve never dropped. I didn’t carry consumer debt then and I don’t now either. I didn’t have a mortgage then, and in fact I never have. No dishwasher, washer, dryer, or air conditioning - same same. I live in a 612-square-foot studio apartment rather than a single room in a shared house, so that part feels a bit more luxurious. The major differences in my life are having health insurance, a retirement account, access to credit, an emergency savings cushion, and a proper mattress.
The thing about savings is not that giving up everything that makes life pleasurable will somehow be enough to, I dunno, pay off your student loans or buy a house. Oh no. It isn’t enough! The point of savings is that you have to find a path to inner contentment that does not rely on external stimuli. The feelings of deprivation and scarcity can follow you even if you have multiple millions of dollars. That’s why so many celebrity actors, musicians, athletes, and lottery winners wind up going broke. It’s not really about the money. If you can live an interesting and fulfilling life in spite of a low-wage job and a cruddy room in a sketchy neighborhood, then you can find peace and joy anywhere you go. That alone is the point.
I've been working with chronic disorganization, squalor, and hoarding for over 20 years. I'm also a marathon runner who was diagnosed with fibromyalgia and thyroid disease 17 years ago.