Welcome to Ask the Bills, where every two weeks Helaine Olen answers readers’ questions about their most nagging personal finance and financial etiquette dilemmas. Seeking advice on a money issue? Email email@example.com.
A few years ago I left my profession, which was making me severely depressed. I was out of work for seven months, during which I traveled to Nepal to find myself and practiced yoga at home. All the while, I was living off my small severance and credit cards. I then went back to work, at much reduced pay, and continued to finance the gap between my expenses and income with credit. I eventually moved home with my parents to save money. It worked in the short term: I was able to meet my minimums but wasn’t able to save for retirement or chip away at the debt. Last year, the bank called in a loan—I had $90,000 in debt on an income of $50,000. I filed for bankruptcy and worked out a settlement and repayment plan. It was a great relief! Since my filing, I’ve finally been able to build a three-month reserve. My question: How do I tell people not to pity me when they find out I filed for bankruptcy? I’m not ashamed—corporations file for bankruptcy all the time, after all. Also, what do I say to a friend who is constantly judging me for purchases I make? I have a budget, and it includes money for fun things.
Here’s the No. 1 one rule about explaining decisions that work for you: You don’t have to. That’s a choice, not an obligation.
Yes, our culture seems to push the idea that anyone who makes a financial mistake or suffers a financial setback ought be condemned to sackcloth and ashes. That’s ridiculous. I assume you learned your lesson—no more quitting your job and traveling to Nepal on a credit card, right? You’re using bankruptcy exactly the way it should be. The law permits us a fresh start after we get in over our head financially. There is no bankruptcy clause that says you need your friends’ and neighbors’ approval.
So you have two problems. Let’s start with your “friend,” who deserves those scare quotes. Filing for bankruptcy must have been hard enough, but it sounds like you’re making good progress. If your pal won’t cut it out, it’s time to move on from the friendship. As for the other issue: If you think people pity you, you might—in this one case!—look to Donald Trump as a role model. His businesses declared bankruptcy four times. No one pities him, do they? Trump refers to his use of corporate bankruptcy law as “smart.” He may be over-the-top, but on this he’s right.
I’m heartsick. My husband and I, 30 and 32, want to start a family but don’t think we can afford to have children. We both work in education and don’t make very much. We’ve tried to trim our expenses by downsizing to one car, canceling gym memberships, limiting social outings, and so on. Our only debt is our mortgage, but even so, building any substantial savings has been out of reach for us. Our current mortgage payment is roughly what rent for a small apartment would cost in our area, so I’ve abandoned the idea of selling the house. I feel like we’re running out of time. We’ve toyed with getting second jobs, but we’re already completely sapped. I work year-round, very long days, and sometimes weekends. My husband is in classes part-time during the school year and full-time in the summer working toward a master’s degree. The only other thing I can think of is to cancel some of our large monthly expenses that come out of our paychecks, like our health insurance or employer-matched retirement plans, but even saying that out loud sounds nuts. The only thing I know about parenting is that it is insanely expensive. We can’t live on one salary, but child care costs as much as my entire salary. Did our choices to work in education doom us to childlessness?
Your letter reflects a classic cognitive mistake: You’re assuming the future will look like the present. In behavioral finance, that’s called recency bias. Your read of the situation going forward might be right, but it’s quite possible—indeed, likely!—that it’s not. I assume your husband is getting an advanced degree so he can boost his wages either at his current job or a new one. At the same time, once he receives that degree, he should have more free time, no? Or perhaps you’ll get a new position, one with higher wages or requiring less time. See where I am going? Things do change, often for the better.
Many years ago, a very smart woman—OK, it was publisher Judith Regan—told me that timing childbirth to ensure it fits into your life is a fantasy. At the time I rolled my eyes. Two children later, I know she’s right. You’ll never find an ideal time to have kids. So I now pass on the advice to younger folk, who all too often roll their eyes at me. Such is life. But I do think you’ll find a way for it to work even if it means giving up on retirement savings for a few years. That’s not ideal—but we do what we have to do.
Health insurance, on the other hand—don’t even think about going without it.
I’m in my early 30s and doing well financially. I’ve earned a master’s degree, paid off my student debt, and put away a good amount of savings for retirement. I make six figures at my corporate job, and am fortunate enough to work at a Fortune 500 company that values “work-life” balance, so my hours aren’t crazy. I have money and time to enjoy my life. I feel pretty silly even complaining. The problem is that I never wanted to be a cog in the machine. The job pays the bills but gives me almost nothing in terms of emotional satisfaction. The rat race is wearing me down and making me depressed. On one hand, I think I would be happier doing something that I enjoy such as teaching or writing, but on the other, a good job and a good salary are nothing to sneeze at, and I’d be crazy to give them up for the possibility of greater happiness at a job with more purpose but lower pay. Am I being irrational? Is this feeling merely a final rebellion against embracing adulthood and everything that goes with it?
Let’s start at the beginning. What brought you to this job, this company, and this profession? Did you always dream of doing it? Did it once give you purpose? If yes, what changed? Or were you mostly prizing the perks? It’s easy to think you’ll love a job because the salary is great; it’s something else to discover that you hate it but still need to do it.
First, you need to remember that switching professions may not restore the magic. Teaching and writing are jobs, too, and they come with their own frustrations—and that’s in addition to the lower pay they’ll likely offer you.
So instead of immediately taking a leap, why not take advantage of the work-life balance your job offers you? You could teach at night, perhaps as an adjunct at a local college or as a tutor in your specialty subject. Or you could try some writing and see how it feels. Perhaps you’ll discover that doing it on a limited basis is satisfying enough and decide to stick with your main gig. You might also find that these were wonderful dreams, but only that. Or maybe some dabbling will convince you writing or teaching is what you want to do full-time. Thanks to your good financial habits, you possess the freedom to make a change—or what Paulette Perhach, writing perceptively in the Billfold, recently called a “fuck-off fund.” You can tell someone to take your job and shove it if you want to. Luckily, it sounds like you have a work situation that won’t necessitate doing that quite so hastily.
My advice doesn’t end there, though. I need to ask: Is there something else going on in your life, something you didn’t think to mention? Many of us fixate on something outside of ourselves—a job, a city—when the problem is more personal. I’d hate to see you give up a good gig and then realize after the fact that it wasn’t the issue at all. When it comes to the desire to change locations, this is such a common problem that 12-step programs have a term for it: pulling a geographic. Don’t do the career equivalent. Make sure it really is the job that’s making you despair before you chuck it away.