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patterns of ink

How fruitless to be ever thinking yet never embrace a thought... to have the power to believe and believe it's all for naught. I, too, have reckoned time and truth (content to wonder if not think) in metaphors and meaning and endless patterns of ink. Perhaps a few may find their way to the world where others live, sharing not just thoughts I've gathered but those I wish to give. Tom Kapanka

Saturday, September 29, 2007

Bringing Home the Duncan Phyfe: Chapter 11

"Saving Up"

When I taught English (a long time ago in a galaxy far, far away), I sometimes used "what ifs" to help students start creative assignments. All fantasy and science fiction starts with a magic "what if?"

There is a huge “what if” that recent generations seldom imagine. This “what if” was very vivid to my parents and to their parents and grandparents. It goes something like this:
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“What if… everything you've used as collateral for a loan or anything you have in your possession that's not yet fully paid for... had to be put in your front yard and a collection agency came and said, ‘Pay off this debt now or we take it away?’” This “what if” could be about mortgages on farms or homes, loans on cars—anything purchased on credit. Baby Boomers and all the generations to follow are thinking, "Wait a minute. That can’t happen. They can’t do that.” But those who lived through the Great Depression are thinking, “That’s not a ‘what if.’ That’s an ‘I remember when.’”

Take, for instance, that new Firestone refrigerator my parents bought in April of 1951. Today's consumer would pull out the plastic and rationalize using the credit card this way: "If I'm confident that can save enough money to buy this unit in six months, why not take it home now and pay it off over time?" People with good credit do this all the time, and it makes sense in many cases--especially on necessities (like a refrigerator) or items that hold their value.
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My father, however, and many people of his generation, did not want to owe anybody anything. For some, it was a matter of pride. To Dad it was also a matter of fear. The kind of fear you don't talk about. The kind based on experiences you'd rather forget...
like walking home from school as a small boy to see all of your household furniture on the front lawn and your mother and older sister sitting on the front porch crying and your mom looking up and saying, "We lost the house." You don't talk about things like that. You just look for the box that has your stuff in it and ask, "Do I get to keep this?" And deep down inside, you begin to hate not knowing when something is really yours.
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So Dad and Mom were big on saving up to buy things, and in time they passed it on to us kids. "It's half the fun of owning something," Dad once told me. "If we could just go out and buy anything we want whenever we want it, we'd never learn to choose between things that matter and things we'd tire of in a week. Think of it like this, Tom. If you start saving for something and a month later decide to save for something else...that's okay. At least you didn't waste your money on something you really didn't want that much. That's one of the best things about 'saving up.' The other good thing is the feeling you get when you pay for what you've saved for and know it's yours."
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For my folks in that first year, "Paying as you go" meant driving a '39 Ford with "round" lines and dull paint while some friends were driving the flashiest new car designs ever to roll off a Detroit assembly line. It meant a wedding night at Aunt Edith's house; coming home to tiny upstairs flat and a bed bought from Dad's third grade teacher; laughing with friends when the spring popped through the center cushion of the couch from Dad's cousin. It meant talking about hamburger as if it were a fine cut of steak... it meant a wooden ice box on the apartment stoop until the day they walked into Star Oil with all the cash in hand. But it also meant feeling rich enough to have a butler as Dad poured "M'lady" a glass of milk from their new, paid-for refrigerator.
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Saving up is a lot like the joy and intimacy of marriage itself. It's not just the getting of something that matters; it's the wanting it enough to sacrifice for it and wait 'til it's rightly yours.
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During this frugal time of life, however, Dad had a secret. From the day he started working at Bell Telephone (two years before their wedding), he was doing two things on a regular basis: (1)he was buying shares of AT&T stock and (2) putting money into the Telephone Employees Credit Union. They had a regular banking account, too, but he started a nest egg where all the pole climbers, and wire pullers, and phone repairmen, and switchboard operators put their savings. He liked what the pamphlet said when he made his first deposit:
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“The purpose of this credit union shall be to encourage thrift among its members…and provide an opportunity for its members to use and control their own money on a democratic basis in order to improve their economic and social condition.”
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Dad liked the sound of that. He was "saving up" for a dream.
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Note: It is sheer coincidence that this is Chapter 11, a term used to describe a bankrupt business that is allowed to continue operating in spite of failed credit and unpaid debts.

22 Comments:

Blogger JR's Thumbprints said...

It never fails, someone will call me with a new low teaser credit card rate.

"I'm not interested," I'll say.

"What interest rate are you being charged on your current card?"

"Oh, I don't know. Seventeen percent, maybe."

"We're offering twelve percent."

"It doesn't matter. Any percentage of zero is still zero. I pay off the balance each month."

I guess this is a rarity nowadays.

30/9/07 8:06 AM  
Blogger patterns of ink said...

JRT,
Many years later, Dad eventually did use a credit card, but it was just as you've said... for his convenience--not for plastic loans. Up until recently, it did seem like the loaning institutions were just begging for people to get deeper and deeper in debt. To this day, my wife and I get unsolicited "gold" and "platinum' cards that we just cut up. I must confess that there are times in life (for instance, when you have two in college, four cars to maintain [all used], and a recent wedding) that it is harder to remain debt-free, but it is and has been a goal of ours from the start. I included this chapter after a comment from Julie in CO--not to put us on a guilt trip, but to point out that 55 years ago young consumers had a very different perspective about saving up and ownership.

30/9/07 1:18 PM  
Anonymous Anonymous said...

I was brought up by parents who did live through the depression as young marrieds...though I was born in the '40's and my siblings were nearly grown by that time. For some reason the values my parents had, didn't transcend down to me and I've always had a "hole in my pocket". Not sure if that comes from having to do without in some cases or not, growing up. It's taken me 6 decades to learn some hard lessons in thrift.
I wish we (my mate and I) were debt free because "if" another depression hit, I'm afraid we'd be out on the curb because we still have a mortgage and a bit of debt besides. BUT, I would have to say that things are much better now than they were in our earlier years of marriage.
Not to play the blame game, our culture really hits us hard with the commercialization of about everything in the media. We're told we "deserve it", that we can't live without it and the list goes on. When I read or hear stories like yours I'm hit with guilt as I should know better....and should have known better from the womb.
I think of how my parents even built a house buy paying for it as they could and not going into debt. Don't know that there are many like that today!!

30/9/07 3:16 PM  
Blogger patterns of ink said...

Anon,
Don't feel guilty, but don't use the plastic they send you in the mail. They don't care about debt burden and want people to use credit as a ticket to a lifestyle beyond their means.

I benefited greatly from my parents' example, but of necessity have had to do things differently, too.

I do know it's a better feeling to save up and buy something than to buy it on credit and pay it off. i remeber that feeling from the 10-speed I bought in 9th grade(see last week's post).
College and Home mortgages are usually a safe use of borrowed funds--although, as we will learn in chapters to come, Dad made some good "home" investments (building all but one of the houses we lived in by himself). They never had a mortgage on a home. I've had very good returns on our sold homes that far outway the fact that we had a mortage. Even Dad agreed.

Sometimes it takes really hard times to equalize an economy, but we're all hoping there is not another Depression! =)

Thanks for reading here and commenting.

30/9/07 4:40 PM  
Blogger HeiressChild said...

i've learned some hard lessons from over-extending myself, but the important thing is l learned. a lot of today's generation is what i call a "microwave generation"--give it to me now, as quickly as you can. i watch some people i know, and they use plastic, buying whatever they want, and usually within a few months, they're either throwing it away or giving it away, and purchasing something newer, bigger, better, or least that's what they tell themselves. the credit never ends that way.

30/9/07 7:07 PM  
Blogger patterns of ink said...

HC,
Good observation. Again I'd say that guilt is not the purpose of this post or the answer to debt. Consumers need to change that "I deserve this" mindset and set some goals to avoid and get out of excessive debt.

According to a report on MSN at
http://moneycentral.msn.com/content/Banking/creditcardsmarts/P74808.asp

More than a third -- 36% -- of those who owe more than $10,000 on their cards have household incomes under $50,000, according to the VIP Forum analysis.

13% who owe that much have household incomes under $30,000.

The percentage of disposable income used to pay debts is still near record highs.

The median value of total outstanding debt owed by households rose 9.6% between 1998 and 2001.

Bankruptcies set another record in 2003, with 1.6 million personal filings, the American Bankruptcy Institute reports.

30/9/07 8:45 PM  
Blogger Josie said...

Wow. More people should learn that lesson. About 15 years ago I got rid of all my credit cards, and I decided to either save up for something I wanted, or just buy the things I needed if I could afford them. And I haven't had any debt of any kind, and the things I buy have value to me.

30/9/07 10:56 PM  
Blogger the walking man said...

once i paid off thirty thousand of credit card debt I found i could do very well without that bit-o-plastic in my pocket. Now I owe no one anything except the bank for the MH and they can take it if they want it.

Peace

mark

1/10/07 8:37 AM  
Blogger Cris said...

Wow, you learn something new everyday and I just learned something new reading your blog. I knew that during the depression that times were tough, but I never knew that they would actually demand that you pay off something on the spot or lose it. It can be really devastating to lose something like a house.

1/10/07 1:38 PM  
Blogger the walking man said...

Cris...that is what caused the depression as well as GW's grandfather and Joe Kennedy pulling thier money out of stocks...the average american investor was buying stocks on margin which means 19% down, when Bush and Kennedy & Rockerfeller pulled their profits out they caused the margins to be called in, most people couldn't pay them, which caused runs on all the banks and people pulling all the cash out of them and BANG! Depression, yes they used to repo more than just your car or house.

Peace

mark

1/10/07 3:08 PM  
Blogger the walking man said...

sorry 10% down

Bush Kennedy and Rockefeller all SOLD short on their stocks and made a killing which flooded the market with unbought stock in companies, which then had less capitol to invest as more people bought on margin, then when prices tumbled because those three sold short the market crashed.

1/10/07 3:12 PM  
Blogger Dr.John said...

I remember my parents paying cash for everything.

1/10/07 6:10 PM  
Blogger Nancy said...

Your dad was a very wise man and I am sure you are delighted that these traits will continue to be passed down in your family... hopefully by all the newlyweds from the summer! Even though you have had to do things differently, you still did them wisely and that is a blessing indeed!

1/10/07 7:50 PM  
Blogger patterns of ink said...

Josie,
Good to hear from you. It's been a while. I don't like carrying cash so credit cards in and of themselves are not an issue with me. Using them as plastic long-term loan officers for living beyond one's means is is a recipe for high anxiety.

Cris,
I think the saddest thing was all the lost family farms in Kansas, Oklahoma, and elsewhere. I think bankruptcy laws now prevent taking the primary dwelling.

TWM,
There's no doubt about it, common people were playing the market with the big boys of the day and most of them did not survive Black Tuesday in 1929. Even some of the "big boys" fell that day. Banking and Stock Market law has improved, but the recent home mortgage crisis proves our human nature to "McSuper Size" to the max. Back in the 30's, though, it was the 25% unemployment (and that is a statistic that does not include about 90% of adult women who were not considered part of the workforce back then)that put most families on the street to downsize (like Dad's parents did) or move in with family (like my mom's parents did).

Dr. John,
Not only did they probably prefer it that way... but credit was not pawned off in the mail back then like it is today.

Nancy,
I am thankful for learning to enjoy frugality and creative solutions from Dad and Mom.
I was even allowed to learn from mistakes like when I bought my first bike. Dad agreed to go "half" on our very first bike. All my siblings saved for a Schwinn. I wanted a bike in time to ride in a parade so I bought an "el cheapo" brand with Dad's half that he intended to toward a Schwinn. He tried to discourage me, but let me do it. The bike was junk. It literally broke at the cross bar and my uncle had to re-weld it. I regretted owning it, but learned that it's worth saving for what will last even if you miss the parade.

1/10/07 8:22 PM  
Blogger SusieQ said...

What is unfortunate is when you give your children a lifestyle that they can't afford to maintain once they are married and on their own. That happened to our youngest child. It took her and her husband years to learn their lesson. They have seven children now and she knows how to shop the garage sales and thrift stores.

I get so annoyed by all these credit card offers. We get a couple of them in the mail every day. It sounds like most of the mature readers here use credit cards as a convenience only and pay off the balance each month. We do the same thing. But we had to work up to that. I can remember the time when we had no choice but to buy things on credit and pay off the balance monthly. There are certain things you should not try to live without till you can pay cash for them. For example, dependable tires on your car.

I have the twins story completed now.

1/10/07 9:36 PM  
Blogger the walking man said...

Tom just a side note about the depression era...unemployment in the Negro community reached sometimes as high as 75%

Peace

mark

2/10/07 2:06 AM  
Blogger patterns of ink said...

SQ,
Because of my upbringing, I did not experience a "downward" adjustment in lifestyle after marriage. I suppose that would be an even greater challenge for a young couple. Julie and I rented little (and I mean little--one was a converted garage) houses or apartments for three years, then we bought a mobile home in a nice trailer park. I know... I know... trailer parks have a certain connotation and then tend to attract tornados, etc. but for us it worked out. After two years the Iowa farm economy went belly up and some great starter homes flooded the market, allowing us to sell the trailer and buy the little blue house that to this day is our girls' favorite. (It had been occupied by a little old lady who moved into a nursing home, but the price was way below market value because so many homes were for sale.) Almost every piece of furniture in our house has a story behind it from auctions, garage sales, thrift stores, and more recently Craigslist.net, etc. Julie is quite the home decorator and it all comes together like a million bucks (okay, maybe not that many bucks).
My daughter and her husband have done their apartment in eclectic shabby chic (true hand-done stuff not store bought) and it looks great.

TWM,
It was especially hard in those areas that were already socio-economically depressed before the Depression. It's hard to imagine what it would have been like. There's no doubt about it, we are "soft" as a nation compared to the Depression and WWII generations. I don't even want to think about what it would take to get our attention and pull together as "one nation under God indivisible..." again. I wish it didn't take hard experiences like that, but it is I suppose "the upside of down" when we learn from hard knocks.

2/10/07 5:27 AM  
Blogger Julie said...

I could go so many different directions with this, but I'll try to keep it short. Maybe you can prove me wrong with statistics, but these days with it seeming like the cost of living increases are not keeping up with salary increases, this really is a time where the only way to "keep up" is to have a two income family. We've made what this generation would view as a sacrifice, with me only working 2 days a week (just for insurance)so I can stay home with our son and have also just recently become a single car family as well - both are not the norm these days. Fortunately, my husband has a job where he has access to a vehicle 95% of the time, but yet it's not officially his. We realized it was pretty silly to be making car payments every month on a truck that only sat in the garage so we've decided to take a risk. It's very scary, yet very liberating at the same time. Of course, we do realize that we may need to be prepared to obtain another vehicle at a moments notice, and who can really do that with out accruing a little debt? Anyway, I am thankful that we aren't too far gone and fair slightly better than some of those statistics you shared, but I know it's going to be a long, hard road for us to finally become debt free (and if that day ever comes, you have to pray everyone stays healthy!)
Sorry to be long-winded and a sound a little negative - I take full responsibility for the situation we are in. Just wanted to add a perspective from the "microwave" generation.

2/10/07 10:56 AM  
Blogger Julie said...

Ooops! Forgot my "Julie in CO" signature ;)

2/10/07 10:57 AM  
Blogger patterns of ink said...

Julie in CO,
I don't think you're being negative or long-winded. What you've described is a reality for many people--especially in your age group. It sounds like you're doing the best you can do and putting important things first.
Getting out of debt is not easy and little steps in the right direction should not be underestimated.

2/10/07 9:44 PM  
Blogger HeiressChild said...

i never intend to say anything that would be offensive to anyone. when i referred to some of today's generation as "the microwave generation," i was referring to people i personally know who want everything (material things) now, at any cost. they're deeply in debt, and are staying that way because they buy and buy, then decide they don't want it anymore, give it away, and buy bigger and better.

julie's situation is totally different, and i even admire her for the sacrificial steps they've taken in their family. i think what you said to her tom is right on the money.

4/10/07 3:35 PM  
Blogger patterns of ink said...

HC,
Thanks for caring enough to follow up on this with Julie in Colorado. Finances are a touch topic. I know this post was a good reminder to me, and if it strengthens our resolve to do all we can to curb the national statistics of reckless spending and credit...that's a good thing.

6/10/07 7:21 AM  

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