Right up front, it’s important to know that I’m not a contestant for the title of Mr. Totally Financially Prepared.
I imagine those who are in the running for such an honor are the kind of people who save the wrapper from a lollipop, so that when they only get halfway through it they can keep it to finish later on.
Now, that’s a bit extreme, but if reflects a certain mentality about being prepared that is escaping a significant number of Arizonans, according to a new report. More on that in a minute.
Now, in my case, I had good influences.
My grandmother and great aunts told stories about living through the Great Depression. Even nearly 50 years later they were carefully comparing supermarket prices to see which one was a dime cheaper for a pound of ground beef or a bag of produce.
They would have endured torture before any of them would have used a credit card.
Until I was laid off myself many years later did I understand their decades of thrifty ways long after the economy improved. During the Depression everyone knew people who lost jobs if they didn’t lose their own. Back then, it wasn’t a choice to try to stretch a bag of beans or rice for an entire week. You lived it once, you feared it happening again, no matter what the stock market or the real estate market did.
We are just getting through a Great Recession. While it has been nothing like the 1930s, it has been tough enough for many of us, even for those who kept their jobs during the recent financial crisis, to critically look at our lifestyles and make changes.
For a while, things had been improving. I remember seeing statistics of a few years ago showing that as a nation, as the recession went on we went from having an aggregate negative savings rate, the worst of all the world’s developed nations, to a positive one.
But statistics reported by the Cronkite News Service’s Connor Radnovich in the Tribune last week show a significant number of Arizonans aren’t saving, and not because they’re at the bottom of the economic ladder.
Radnovich’s story was about the Corporation for Enterprise Development reporting that 25 percent of middle-income families in this state have less in savings than it would take to pay all household expenses for at least three months, a benchmark for determining whether a household can weather a short-term loss of income.
In other words, not having enough in the bank isn’t just an affliction affecting the very poor, the CED’s director of state and local policy told Radnovich, saying the 25 percent figure is for Arizona households whose annual earnings are between $52,000 and $87,000.
Radnovich also wrote that the report also found the credit card debt load of a typical Arizonan is more than $12,000, about 12 percent higher than the national average.
Each family’s circumstances are different, and for every person cavalierly tapping further into his or her credit card debt limit to pay for vacations or that must-have 37th pair of shoes there are many others who must do so to pay their utility bills.
But this report says that too many of us aren’t listening to their grandparents. The Great Depression keeps receding into history. My grandmother and my great aunts have passed away, but if they’re looking in on me now, they might feel relieved that the kid finally got it.
I still have plenty of room to improve. Not too many of us can swear on a stack of Suze Orman’s books that they’re looking seriously at their saving and spending and doing the most that they could.
If the recent economic crisis has taught us anything, it is that economies are cyclical, not linear. Things don’t keep going up forever (or down, thank goodness). We can hope that market forces and proper, limited regulation will help prevent catastrophes. But neither the market nor regulation helped much last time.
It’s really up to us. We middle class folks have to resist inner voices telling us to just go for it, as in that strange car commercial with a small second head that pops out of a guy’s neck at the dealership to musically urge him to buy now. We have to quiet insistent children in store aisles. We have to stop worrying about what the neighbor just bought.
Yes, Wall Street has to clean up its act, too. But we can’t be pointing fingers at them if we’re making personal financial decisions as bad on our scale as theirs were on theirs.
Read Tribune contributing columnist Mark J. Scarp’s opinions here on Sundays. Reach him at firstname.lastname@example.org.