Don't think of a polar bear.* Rawr! Gotcha. Okay, now try to get a good night's sleep when you have unpaid bills, debt, and no savings.
Maybe it's where I live, but a polar bear is nowhere near as frightening to me as debt is. A polar bear can only drag out the devouring of my head and neck for a few minutes, whereas debt can swallow my soul and eat up my peace of mind for decades. I know which demise would make a more interesting story for posterity. "Here lies Auntie, who was eaten by a polar bear while trekking through the tundra." Versus: "Here lies Auntie, who could never afford to do anything cool whatsoever."
If I really am ever eaten by a polar bear, please read this story at my wake. I AM CLAIRVOYANT!
If you are a polar bear, please don't eat me.
Moving right along...
We're built to respond to immediate threats in the natural environment. Thinking in the abstract about things like the future, our hypothetical old age, the precise location of Funky Town, or "retirement savings" does not come naturally to us. There's no real biological imperative to surviving past the age of reproduction; we just kinda tend to prefer it. I mean, I never had kids anyway, but I still get to be here, right? The more I think about this, the more I'd rather talk about money than about top-tier predators or infant care. It's a taboo topic, though. Most people would more openly talk about their sex lives or history of trauma than we would about how much we earn or how much debt we carry. Most of us would rather not think about money at all. We like to float along in the money fog.
Imagine a group of five American women, representative of the general population. Maybe we're having a book club meeting and eating brownies. Two out of five of us have no retirement savings whatsoever. The third has under $10,000 put away. Unless three-fifths of American women are under the age of 25, it looks like we have a problem. Indeed, about three quarters of Americans over forty are behind on our retirement savings. That includes me. I'd really like to have twice as much in my account as I do. It's something I take seriously, though, because it's real to me. I look at my mom and I look at my grandma, and I realize that due to genetics, I am likely to live at least as long as they do. I'm lucky enough today to have them here, where the three of us can have a book discussion together. I'm also lucky enough that they share their experiences with me, and I can draw my own conclusions about the role of money at those stages of life. Women live longer than men, so money is more important for us.
It's true, I'm going to have the poor taste and lack of judgment to continue to grow older. A few years ago, I was pretty sure I could pull off being 32 forever, but I guess I just wasn't stubborn enough.
I started learning about money after my divorce. I mean, I know what money is. I started working for money when I was ten years old. I used to have a little canister with a cat on it where I put my babysitting money, and when I had a certain amount, I would go to the mall and buy a pair of earrings with it. It never occurred to me that I was handling human feces in exchange for cheap costume jewelry, but that's what I did. If I had truly realized that I could have saved that money toward something like an interview suit, a new computer, or night classes, I doubt I would have. A future age when that sort of thing might be relevant to my life would have seemed boring and dorky. Earrings, man! Give me the new earrings! I felt deprived and I wanted treats. After the divorce, I felt deprived all right, but what I wanted was freedom and independence. I wanted to make the rules in my life. I wanted to feel smart and capable. I wanted MONEY and lots of it. Money represented power and leverage and choices that I did not have at that time.
I went to the public library and found the personal finance section. It edged into the investment section, followed by the business section. I'm a fast reader and I plowed through that stuff. On the other hand, my math skills are barely average. I struggle with transposing digits and simple arithmetic errors; it's not dyslexia but it's close. Sometimes I think a 3 is an 8 or a 7 is a 2. I felt like I was in way over my head, and it was really, really hard. Honestly I have an easier time with automotive repair. I'd much rather change a fuel filter than do math problems. Money fog, thickening out of thin air, blurring my vision and making my head spin. Do I HAVE to? I kept reading. I read the same information over and over and over again, explained by different authors, many of them women. Gradually, it started to make sense. Then I realized that I didn't really have to do math at all to be good with money. I started seeing trends, the same way that I do in the study of history. I told myself a story that worked in my life.
If you're good at math, then you can certainly do what I did, only it will be faster and easier for you.
What I understood was that I will probably spend more time being an Old Person than I did being a Young Person. (Ages 18-35 is seventeen years, while I may live far more than seventeen years past the age of 65). I had this idea that retirement magically happens at 65. I worked in social services, though, and every day I saw elderly clients who lived on social security and had chronic money problems. There are few things sadder than an 83-year-old woman crying. I was quite broke myself, but I was obviously young and strong enough to do extra work that a frail Future Me could not do. From a scarcity perspective, the idea of being old and poor scared the crap out of me. This was no money fog. This was a polar bear. I studied harder.
I learned that "savings" comes in categories. I learned how to set up different kinds of accounts. I learned how to research the different kinds of investments I could make with the retirement contributions I made at work. I remember the day I finally had over $100 in my retirement account: triple digits, woohoo. I was 26 and I felt like I was years behind. I was becoming competent. I kept reading personal finance books and articles and blogs and following business news. I started to like it. Then I started to really, really like it.
One day, I realized that I KNEW WHAT I WAS DOING. I remember the precise day. We had just gotten our quarterly retirement reports at work. It was January 2009. I grumbled to my friend that I had only made a quarter of a percent in the last year. "You MADE money?" she asked in surprise. It was, after all, the aftermath of the crash of 2008. "Well, yeah," I replied, "I had a contra fund." Blink. I'm getting better at it. I made a pick that has gone up 93% in value. My husband and I manage our own accounts, and it's been fun to see him start paying more attention to my results. He's even invested in a couple of my picks because he respects my research. It's something I do for myself, but it's nice that money is something that brings us closer and helps us respect each other more. In a second marriage, it's... well, it's a necessity.
Foggy thinking is the enemy. It never helps. It never helps to be foggy about your friendships or your romances or your pet's veterinary needs or your physical condition or your personal living environment. It definitely doesn't help to be foggy or vague about money. Spend too much time in a money fog and you'll find yourself walking straight off a money cliff. You're a smart person; you must be, or you wouldn't have read this far. Make a commitment that you will start learning more about money and figuring out how to get some. Do it for Future You. Do it so that you can be a cool older person with great stories to tell. Do it so that you can take care of yourself and afford the kind of life you really want to live.
* This is a reference to Dostoyevsky and what is known as ironic process theory. This means that trying to suppress a thought makes the thought more likely to come up.
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.