Saturday, December 6, 2014

The Million Future Nows

This morning, I read Linda Tirado's "Why Poor People Stay Poor" in Slate. She argues that "saving money costs money" (this is the actual subtitle of the article) and the poor don't have the luxury of making good decisions because virtually all their spending happens as an emergency. Essentially, the poor are too poor to shop for good deals.

Tirado is right about the mechanics of poverty, but she treats it as a given, as an exogenous phenomenon that happens to us, over which we have no control. She's wrong.

Tirado's knows she can't get ahead of expenses because there's no emergency buffer, no runway. But she dismisses building the runway. She acknowledges that her day-to-day decisions keep her poor, but she doesn't do anything differently. Saving, she says, is for the rich.
"When I have a few extra dollars to spend, I can’t afford to think about next month—my present day situation is generally too tight to allow me that luxury. I’ve got kids who are interested in their quality of life right now, not 10 years from now."
That's the trap. She has it exactly backwards: she can't afford not to think about next month, because next month won't be any better unless she does. Yes, we care about quality of life now, but now is almost over. Next month and the month after that, we will care about our life in a different now. But unless we do something today that will make the future nows better, they will suck just as much. Tirado choses to make the current now a little better at the expense of the future. These decisions add up:
"If the good toaster is 30 bucks right now, and the crappiest toaster of them all is 10, it doesn’t matter how many times I have to replace it. Ten bucks it is, because I don’t have any extra tens."
She's wrong, because it does matter how many times she'll have to replace the toaster. It matters a lot! She denies having agency and digs herself deeper. Must she buy the toaster right now? Is it possible to toast bread on a pan rather than spending your last tenner on crap? Can this purchase wait until a more favorable time? She says no. She understands her total toaster expenditure will be greater but doesn't make a different choice. Why?

There's a tendency to view our current lifestyle as the absolute bare minimum, that we can't possibly live on any less than what we make now. This is independent of level of income. A young professional who "can afford" to go out to dinner and drinks every night but has no savings is no less vulnerable than Tirado. And it may seem as impossible for them to not go out as it is for Tirado to live without a toaster. Without a runway, changes in our incomes are catastrophic. We may have higher quality of life than Tirano, but unless our answer to "how long can you live your lifestyle if you lost your job" isn't "pretty damn long," we are vulnerable.
"It is impossible to be good with money when you don’t have any. Full stop. If I’m saving my spare five bucks a week, in the best-case scenario I will have saved $260 a year. ... If you deny yourself even small luxuries, that’s the fortune you’ll amass."
This is Tirado being an idiot. "$260 is so small, I can't care about saving it." She complains of lacking any financial flexibility, but here she is, pissing away a chance at it. Can we assume $260 would actually make a big difference to her right now? Didn't she know she'd need it when she chose not to save it? It's possible the memory of those past "small luxuries" makes her happier than a bit of financial flexibility would, but I doubt it.
"Of course you will never manage to actually save it; you’ll get sick at least one day and miss work and dip into it for rent. Gas will spike and you’ll need it to get to work. You’ll get a tear in your work pants that you can’t patch."
This is a fatal flaw in Tirado's relationship with money. This is how she keeps herself in the cycle. This is her locking herself into poverty. Anticipated emergencies somehow translate into "why bother saving " rather than "save now so I can buy pants on sale, not when I tear my only pair." She is literally saying  that she'd like her next expense to be another emergency.

Tirado makes choices that ensure she doesn't have a runway, then attributes later bad choices to not having a runway. She understands how it works but is unwilling to take action that can make things better.

It sucks to be poor, and it sucks to be vulnerable. I've been there and I have sympathy for Tirado, her family's life sounds legitimately hard. But she's not making it easier when her in-the-moment choices shortchange the future. $260 a year is not a lot, but it's 8.6 quality toasters.

Tirado talks about money-saving strategies (buying in bulk, proper vehicle maintenance) as luxuries of the rich. But if she were just $260 wealthier, would she not be able to buy air filters for her car and a bunch of cereal for her kids? Would that not get her on the right track, where she's buying a $30 toaster once and not a $10 one over and over?

Being too poor to save money is like being too fat to exercise or too busy to learn time management. Tirado is right, it's easier to continue doing well once you're already doing well. But that's an argument for doing whatever it takes to get on the right track now, not against it. The work and pain of now will soon be in the past anyway, but they determine how much you enjoy (or hate) your future nows.

Tirado connects causes and effects, except those of actions over which she has direct control. She isn't willing to make the "now" suck a little more even if that means improving a million future nows for her and her family. And this isn't just her, and it's not just low-income folks. When we borrow for a vacation, or smoke a pack of cigarettes, or simply lay around in front of the TV, we are in some way borrowing from our future selves. This is human nature. And we have to draw the line somewhere, at some point we have to let ourselves relax and enjoy rather than building maximally optimal futures for ourselves. But it doesn't sound like Tirado is at that point, and it doesn't sound like she gets enough joy out of her small luxuries and crappy toasters to justify keeping herself on perpetual brink.

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