The Motley Fool: The Fribble, Why? by George Runkle

Monday, March 02, 1998

Why?
By George Runkle (TMF Runkle)

Maybe it's a mid-life crisis, or maybe I just got a dose of common sense. Anyway, some "why?" questions have come to my mind, and I discovered that the answers fly in the face of conventional Wisdom. Here are some of the questions:

Why can't a person (me, for example) live on less than he or she makes? Oh, we've heard that trite little saying, "the more you make, the more you spend." Does that have to be the case? My wife and I certainly needed to spend more as we made more in the first few years of our marriage. That first apartment was cheap, but the cockroaches got old, the crime rate was frightening, and when all of the apartments across the street were set on fire, it was a little too much. In time it was necessary to move up to a house in a decent neighborhood to raise our children. Beyond that, how much is really needed? After you get past a certain point, it's just scale that increases. The houses just get bigger, the cars more expensive, the clothes more expensive, but there really isn't an improvement. The debts get bigger, too.

Why does living on less than I make mean I'm cheap? I read a book once that was supposed to help me live on less. The methods suggested were a true exercise in agony. There were instructions on how to make your own envelopes out of scrap paper. It recommended that you put half -finished glasses of milk back in the refrigerator (which is a good culture medium for the bacteria that came out of your child's mouth). You were supposed to buy huge quantities of raw oatmeal (ugh!).

I suppose this is good for some of us who are brought up on guilt. If I don't make my own envelopes out of scrap paper, buy oatmeal by the trailer load, or get all my clothes from second-hand shops, I can feel really bad for not saving money. I don't have time to make my own envelopes, I hate oatmeal, and I didn't like leisure suits when they were in style. However, it hit me like a ton of bricks that money can be saved with less difficulty. My wife and I did a budget, and I discovered I could save a lot by bringing lunch to work. I don't even like going out to lunch; it takes too long, and I hate waiting in line. Other easy ways to save appear too, like using coupons at the grocery store. The easiest way is to not buy things. I really don't need that laptop computer. Wow! That $2,500 was saved fast, with no effort whatsoever. I don't even have a barrel of oatmeal in the garage.

Why is it assumed we have to go through life without an element of control? Tell anybody at work or your friends that you are working out a budget. They'll laugh, and insist it can't be done. Too many "unpredictables," they will say. How is it that businesses make a budget? In business, or in my case a government agency, there are equally unpredictable events. In my full time job, I have heating systems that fail. This week I discovered a hangar structure was full of loose bolts, and overtime jumps when unexpected snowfall hits us. Still, we get by on a budget. You just throw in a number for what you think can happen.

A household budget can work the same way. Think of this; I'll bet you know people who make a lot less than you do and seem to be doing just fine. What if you budgeted yourself on their income? Then set aside the extra for the water heater failing, the car dying, or the refrigerator self-destructing. It's a much better alternative than using MasterCard to cover the unexpected.

Why is it always necessary to jump to even higher-paying jobs? Isn't it possible to go to a lower-paying job that might be more enjoyable, less stress? Obviously, if you're living beyond what you make, that can't be done. If you believe that the only way to spend less is to be cheap, you can't really cut down on expenses. That makes it difficult to live on less than what you make now. This of course makes it necessary always to move up to higher paying jobs. Ultimately, you peak in what you can make anywhere, and then you get to sweat about losing the job. We've all known people who were terrified of retirement; they couldn't afford to do so. Do you like your job? Or are you in it because you can't afford to take a lower-paying one?

All of these "Why" questions point back to one thought. If I live on less than what I make, which I can do by not buying things I don't need, and building a budget that shows less waste, I can add an element of control in my life. If I do that, I can do more of what I want. As I said, I don't know if this is a mid-life crisis, or being hit with a sudden flash of common sense. What kind of "Why" questions can you think of?