Beating Broke

Personal Finance from the Broke Perspective

Breaking Your Money Superstitions

By 7 Comments

Did you know that when you were born, the only things you were afraid of were loud noises and falling?  It’s true.  Anything else is a learned fear.  Now, it may be true that you can learn a fear at a young enough age that you won’t actually remember where the fear originates, but it’s still a learned fear.

Stop and think about that for a minute.  What are some of your fears?  Each and every one of them is a learned fear.  And if something is learned, it can be unlearned.  Or, at least corrected with proper learned knowledge.  Take today for instance.  It’s Friday the 13th.  Well known as the day of bad luck.  Walking under a ladder today, or breaking a mirror today is double bad luck.  Isn’t it?  Well, it’s something like that, I’m sure.

Superstitions and fear have done their fair share of damage throughout the years.  The first good example that comes to mind would be the Salem witch trials.  All those innocent women burned at the stake.  It’s especially heinous when, after watching The Wizard of Oz, everyone knows that you pour water on a witch if you want to get rid of them.  Less mess too.

Merry Crisis and a Happy New Fear by Robinsoncaruso, on Flickr

Seriously, though.  Your superstitions about money, and fears about money are learned.  Somewhere along the way, you decided that the superstition or fear was a valid one to have.  Money superstitions are just as much hocus pocus as crazy Quaker witches.  Today, Friday the 13th of July, 2012, take a few moments to really think about the superstitions and fears that you apply to your money.  Then, do something small that goes against those fears.

Have a fear of losing it all?  Take a handful of change down to the river or lake and toss it in.  It’s not everything.  Just some random bits of metal in a circular shape.  Not only can you make more, but you’ll likely get along just fine without it.

What are your money fears and money superstitions?  Share them below, and let’s all compare and see how common some of them are?

And remember, there are babies all around the world being born today that have none of them, until we teach them to them.

How Higher Education is Ruining the Economy

By 20 Comments

The last thing you probably expected, today, was a post about how higher education is ruining the economy. After all, aren’t personal-finance bloggers supposed to be all about advancing yourself, spending wisely, and earning all that you can? Perhaps, but I’m of the personal belief that one can still advance yourself, spend wisely, and earn all that your worth without having to go to college. Before I get off on a tangent let me explain just what it is that I mean. Higher education has its place. If you want to be an engineer, a doctor, social worker, or even a teacher, you’ll likely need to have a college degree. For those professions that require a college degree there simply isn’t any other way around it. But, that doesn’t mean you need to go to a college whose tuition costs exceed several years worth of the expected salary for the profession that you wish to have. After all, the idea is to learn a profession so that we can earn more money, not learn a profession so that we can spend more money.

Higher Student Loan Debt is Burdensome.

How does all that relate to the economy? The effects of the high cost of tuition are far-reaching. The added debt of college loans can create a cyclical debt treadmill. A recently graduated student may have a small window of time to get his or her affairs in order, but is quickly saddled with a student loan payment. Newly minted professional usually work extra hours to make extra money to pay off the large student loans they’ve accumulated. The combination of less free time with higher debt repayment figures creates a vacuum whereby the money earned never gets a chance to enter into the economy. And everyone knows that the quickest way for money to enter into the economy is through consumer spending.

Exaggerated Educational Requirements are Exaggerated.

But, the added debt isn’t the only reason that higher education is ruining the economy.  Heck, it isn’t even the student loan interest rates.  Our economy has always had an informal hierarchical system.  When I say that, I don’t mean that the people with the degrees got the better jobs, either.  Not so very long ago, the people who got the better jobs were the people who were best suited to it.  For many positions, that meant that the people getting the better jobs were the people with the most experience, and the most aptitude for the position.  Somewhere along the way, the people in charge of hiring decided that a higher education degree could replace some level of experience.  More and more companies decided that this was a good thing.  And now, many job openings require that you have a degree of some sort.  Real world experience in a position has been surpassed by classroom experience.  Entry level jobs that could just as easily be done excellently by a person with a high-school diploma are suddenly closed off to anyone without a degree.  Anyone that aspires to hold such a position is thereby required to attend college for a minimum of two years rather than spend those two years gaining experience and job skills for the position.  Worse, for the economy anyways, is that that person is then effectively taken out of the economy for at least two more years.  Instead of earning money, paying taxes, and contributing to the economy, that person is racking up the debt while taking so many credits that they can’t even afford the time to take on a part-time job.

How do we fix higher education?

College Fund © by Tax Credits

I think, first and foremost, we need to stop pretending that a degree is a “requirement”.  Stop pushing our children to attain a degree, and instead push them to get the minimal required training to attain the job/position that they desire.  Kids will be kids and they’ll do what they please, but they shouldn’t feel like their being pushed into a college education because their parents want them to get one.

We need to stop requiring degrees for positions that clearly don’t really need one.  In my particular field (IT for those curious among you), very little of what I learned in college has been applied in my work experience.  And yet, each of the positions I’ve had (with the exception of my most recent part-time job) has required a four year degree in the field.  Let me tell you, anyone with an aptitude for IT, and a willingness to learn on the job could have easily fulfilled all of the duties that I performed.  It’s a fact. How many other positions are there that are the same way?  Lots and lots, I’d wager.

From a strictly financial perspective, we have to do a better job of educating our children about how to go about getting a degree if that’s what they choose to do.  There are numerous tools that can help us out, in this internet age.  Our own government has a plethora of information to help, and there are plenty of other resources, like Big Future, that have lots of information too.

We also have to properly express what a fiscally responsible adult should do.  I can’t count the number of my fellow students (myself included) who took the maximum allowable student loans out, despite not needing that amount, so that they would have the extra funds available to do what they pleased with.  Yes, it’s some of the cheapest money you will ever borrow, but unless you’re planning on investing in a guaranteed rate account while you attend college, it’s still debt.  And every penny of it will make your financial life harder once you graduate.

Finally, we have to stop this idea that we are all entitled to a college education.  We aren’t.   It’s a privilege that we pay grandly for.  Just because you can spend $50,000 a year to get your library sciences degree, doesn’t mean you are entitled to, or should.

Do you have a degree?  Was it required for your position?  Should it have been?  How would you fix higher education?

The Struggle with Enough

By 18 Comments

If you’ve read any of the more popular personal finance blogs, books, or attended any of the seminars, one of the more pervasive themes is the idea of enough. Heck, I’ve even written about it before.  Just what is enough, or how much is enough.  They’ll tell you that you need to find your “enough”, and then hold yourself to it.  Instead of using the inflated “enough” that the Joneses next door use, you’ve got to take a good look at your finances and find your own “enough”.  Now, a show of hands, how many of you have actually found what enough means to you, and held to it?

I can’t actually see your hands, so maybe a show of hands wasn’t the right way to measure the tally.  But, I’d bet that only a few of you actually would have put your hands up.  Why?  Because, you struggle with enough.  I do too.  Enough is an arbitrary measurement.  What you think enough is today isn’t necessarily going to be enough tomorrow.  So many factors go into what we believe enough is, and many of them change regularly.

A few years ago, if you’d have asked me what enough was, I would have told you that it was having a good paying job, a nice house with room for my family, and enough leisure time to enjoy the benefits of having those things.  Today, my answer is a bit different.  I quit my job a few months ago, and have had no other income besides what a part-time job and a handful of small sites provides.  We still have my wife’s income, but, compared to what we were making before, it’s a fraction of what it was.  Today, enough has a totally different feel to it.  And, we struggle with it.  Just like I’m betting you do to.

Enough money does © by Michell Zappa

The struggle is rooted deep into our psyches.  Growing up, we’re inundated with commercials touting the latest and greatest toys.  As adults, the only difference is the price of the toys.  Instead of a “Castle Grayskull Playset“, we want to have the newest credit card with all the fancy bonus miles, the new car with the rearview camera, or the house with the dedicated room for a library or mancave.  And that doesn’t even begin to touch the use of money as a security device.

People fear being broke.  A quick reminder that the name of this site is Beating Broke, will tell you that even I am not immune to the fear of being broke.  I’ve got a small secret to let you in on though.  Like “enough”, how you define “broke” makes all the difference in the world.  For some, being broke means making less than $100,000 a year.  If that’s the case, my family is way beyond broke.  Even when I still had my job, we were a full-time income away from making $100,000 a year.

What does broke really mean to you?  To me, broke is a place where you have tons of debt, and your income is the only thing keeping you afloat.  You’re stuck in a job you don’t like, so that you can make money to pay your bills.  The funny thing is, I feel less broke now that I don’t have a full-time job, than I did when I had my job.  Part of that may be straight up delusion, but it’s true.  But, I think a good part of that also comes from changing my definition of enough.  Instead of the good paying job, nice house, and leisure time, my definition of enough is something that feels a little bit more like satisfaction.  I’m satisfied with just barely making enough to pay the bills.  I’m satisfied with finding free or low cost activities that will entertain us.

And yet, we struggle with it.  For the last few weeks, I’ve been struggling with the idea of getting a new full time job.  Partially because the income from this and other sites hasn’t scaled to the degree that I thought it might.  Partially because with the amount that I’m making we teeter on that precipice of being able to adequately pay our bills.  And, partially, because we still struggle with the definition of what enough is.

What is your definition of enough?  How has it changed over the years, and do you feel that your definition of enough is enough?