talk and teach
Gecko Girl brought my attention to this article, Michelle Singletary’s Too Rich to be Poor-Mouthing, which discusses how a man with a six-figure salary and kids in private school asked her for advice because he didn’t have an emergency fund. He and his wife are savers and investors - contributing to retirement, college saving for their children, and keeping a low-debt lifestyle with a reasonable mortgage, no revolving credit card debt, and a soon-to-be-paid car note. He was blasted by some observers, who said that he had no right to complain given his high salary, and that he was simply whining.
Ms. Singletary thought that the commenters were being unnecessarily harsh, and I agree.
My take on it is that the man did everything right so far as he and his wife could tell, but then one day, they looked up and realized that they’d committed all their savings and investing to every progressive thing EXCEPT an emergency fund. He just wanted advice on how to put one together, since he couldn’t just set money to the side because all of his money was going towards everything I mentioned in the first paragraph. He wasn’t saying he didn’t make enough money. He wasn’t whining. He was just asking for guidance.
Ms. Singletary gave him some budgeting advice, and I agree. It seems that they just need to prioritize differently in their retirement/college/expenses plan until they have a suitable emergency fund, and then they can get back to the super-saving that they were doing before.
But the interesting thing was how people felt about his request. Whining? Sounded like sour grapes to me. It would have been one thing if he’d complained that his family couldn’t make ends meet because there wasn’t enough money. That would have been ridiculous, since they can always scale back saving and investing during tough times, and their family income is more than enough to get the necessities of living. But he didn’t. Should people only be allowed to ask for money management advice if they’re poor? Would people have reacted better if he had lied and said that his family income was half of what it really is? I think he did well to explain how well his family was doing, lest Ms. Singletary erroneously assume that he and his wife were mere spendthrifts who needed scolding, instead of good stewards who were maybe investing a little too vigorously to save.
Finance is personal and relative. His concerns are certainly different from mine. I’m more worried about getting out of consumer debt than he is, since he doesn’t have any besides a car note, which will probably be paid off before my own car note. But my self esteem about my finances is not so low that I can’t see past it enough to realize that his concern is definitely valid. Why would someone doing so well want to leave an emergency to chance or credit cards, when he has the means to create a liquid emergency fund that wouldn’t make him indebted to anyone should his family ever need it? What good would their high income do for them if they lost pay due to disability, for example?
I can learn from his story. My emergency fund won’t get any less important over time. Even people who are doing well need emergency funds. No matter how much money I ever accumulate, I’ll still need a cushion, just in case. And I should be mindful of that as I make forays into retirement savings, investing, my first mortgage, and other developments in my life, like having a family to educate. Then I can plan around making sure I have enough in my emergency fund as I make major decisions. If he had, he wouldn’t be asking Michelle Singletary for advice. But I’m glad for my sake that he did. He "talked business," and I learned something. If folks would do this in an openminded way more often, maybe we’d all learn something more often.
