The Micro and Macro of Spending

Sequester

The day after my birthday was my afternoon off.  Mary and I were together, enjoying each other’s company and trying to make responsible spending decisions.  We drove to the recycling center and paid $5 to drop off several weeks worth of garbage.  I spent $5 for a new used wallet, and another $6.95 for a replacement strap for my wristwatch.  I looked at some cheap DVDs, but didn’t buy any.

I also made one purchase above my usual level.  I bought a used Alpine Design jacket at the consignment store, and negotiated the price down from $30 to $25.  It’s still raining most days and my other raincoat’s wearing out.  I beat myself up about the purchase for a few sentences until Mary offered a polite version of “Shut up.  Happy Birthday!”  Aside from scrubs needed for work, I spend about $100/year on clothes and shoes.

I’ve changed my attitude about spending a lot.  When I worked behind the scenes in showbiz I thought nothing about dropping $100 for dinner, buying all kinds of new software, coming home with a handful of DVDs, or buying new shoes if I saw a pair that looked good in a store window.  I wasn’t living above my means, but a great deal of it was impulse buying of items I didn’t need.  I often came across clothes in our closet with the tags still on them a year after purchase.

You might be forced to change your spending habits because of losing a job or facing unexpected calamities like disease, accidents or being the victim of a crime.  That can be brutal, painful and frightening.  My change was gradual, over an eight-year period.  I decided I wanted to do work that helped people directly, and I expected (correctly) that it would pay a lot less than the entertainment industry.  I had enough time while I was transitioning careers and getting an education in health care to think carefully about how to live on less.  My wife and I planned, and we now have a life that is more spiritually nourishing in no small part because we chose to spend less and own fewer things.

I get the feeling our government hasn’t gone through any similar sort of soul searching.  This sequester thing is such a dumb way to reduce spending.  Suppose I had used a method like this.  Instead of considering my purchases case-by-case, I would just spend 6% less.  I would buy 6% less food, drive 6% less, heat the house 6% less, only take part of my asthma meds etc.  Instead, I chose targeted spending reductions like moving to a smaller house much closer to work, which reduced my driving 80% and our mortgage more than 50%.  I therefore didn’t have to do “dumb cutting” like EVERYTHING OFF 6%, because WE MUST REDUCE SPENDING.

Regarding the national agenda, I think there are things we shouldn’t cut at all, and other things we could cut more than the sequester levels demand (weapons).  We even ought to spend more on some things, like repairing bridges, and expanding preventative care for all citizens.  But they aren’t asking my opinion about it.  No one is.  National government isn’t my area of expertise.  I’ll concentrate on self-government.

The sequester approach is a result of viewing the problem of what to do about spending from an overly superficial perspective.  Taking an intransigent position like “we need more” or “we need less” government doesn’t solve anything when what we need is BETTER government.  Wise choices require careful examination.  Surgery is far more challenging than butchery.

It’s possible that if the sequester hurts enough people one of the consequences of the dumb budget cutting will be the election of fewer ideologues to Congress next time.  Voters might blame “those guys who did it to us”.  I don’t really know.  I’m glad I’ve been practicing my own austerity measures for a decade, though.  I’m better prepared to weather any coming economic difficulties than others with modest means.  Perhaps the failure of dumber approaches will lead to trying smarter ones!

About these ads

15 Comments

Filed under debt, Ethics and Morality, Money

15 responses to “The Micro and Macro of Spending

  1. Michael – you are a brilliant essayist! And you explained budgeting and what is happening in DC so well.

  2. super piece. kudos to you for your journey and thx for sharing.

    The husband was shopping yesterday. He found a DVD he really wants at the store (kind of a Walmart). At the register he decided 25 euros was just too much to pay, even for a film we’d really enjoy.

    When he got to the car he realized he still had it — but he hadn’t paid for it. The longing for the disc rose up and had a conversation with my ultra-honest husband. Probably took him by surprise!

    He came home without the movie, without having spent money we shouldn’t (can’t?) and with a clean conscience.

    • You said it correctly – shouldn’t. Much of our spending, both personal and national, is a matter of choice. We ought to decide on moral and ethical bases, consciously, and too many of our expenses are driven by force of habit. Your husband’s instance of self-examination is evidence that we can change, with a little thought. Thanks for retelling the story!

      I’m a great lover of film too, and all but the most obscure titles appear on the TV schedule after a year or so. DVDs are also available free from lending libraries, and free online content increases each day.

  3. We’re into downsize mode, and have adopted a practice of ‘two out, one in’. Before anything new comes into the house, two similar things have to be sold or recycled in some manner.

  4. galenpearl

    I agree with your approach. A few years ago, my church needed to make some spending cuts. I was appalled that the solution that carried the day was to make set cut across the board rather than making choices based on priorities. I would have cut certain things more and others not at all. But when people can’t agree, then across the board standard cuts end up being the agreement by default even if it makes no sense!

    • That’s disheartening, especially in a church isn’t it? There must have been a balance of power between those on different sides. My normal church spending experience is observing some well-established “leader” drive the majority right to whatever pet projects they are backing. I expect you all did try hard, but I can still see myself praying (out loud) for guidance in making wise choices, as I do (silently) in my life outside of church.

  5. I totally agree with you about government spending. I always look for bargains and because they’re cheap doesn’t mean they’re ‘cheap’ – if you know what I mean ;)

  6. ” Surgery is far more challenging than butchery.” So true. Stupid spending decisions aren’t cured by across the board cuts. They take time and thought.

  7. I had never heard of sequester until this year. In Canada, drastic things have happened in govn’t, but it can result in lay-offs over a period of many months for govn’t depts. seen as not lean enough. Whatever those reasons may be.

    Right now, there’s probably some massive changes going on with long-term employee boomers retiring. So that’s opportunity for govn’t to reorganize a bit..and then get fat again in 5-10 years.

    • In most other countries, the term used is “austerity”. In practice, it benefits the 1%, so the stock market is zooming up. But it increases income disparity. I’m glad I don’t live by the standard rules of Capitalism. I can tell it’s going to hurt too many of the wrong people. I can’t extrapolate very much about the specific details because it’s outside my education, but I know it smells. I agree with you that these behaviors are cyclical. The political cycles don’t provide the health benefit that your cycles do.

  8. Here’s the problem. The Federal Government is largely a catch-all for those who cannot get real jobs.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s