What’s the value of ten dollars? The question seems obvious. Ten dollars is exactly ten dollars, or a thousand cents. The effect would be much the same as asking how long a meter is.
Except that’s a meaningless tautology, and doesn’t address the core problem. Ten dollars is just a collection of symbols on paper, or more frequently today, a series of numbers on digital records. This would still be true if the United States were on the gold standard, or even used gold coinage directly; gold may restrict the supply of money, the scarcity of which safeguards against the most egregious fluctuations in value, but having money made of shiny metal rather than elaborate paper and plastic sheets, or ones and zeroes does not give it inherent value.
But I digress with my monetary musings. My focus is not on the dollar, but on the ten. What is ten dollars, relative to one, five, or a hundred? All of these are, after all, positive amounts of money which on any given day I would be happy to receive. I could easily spend any of these amounts without much planning. And perhaps most crucially, none of these amounts would make the difference in being able to afford my medication, and hence paying my bills, an activity which happens on the scale of tens of thousands of dollars.
This is, of course, uncoupled from the reality, which is that, whether or not any of those amounts would cover my cost of living entirely, all of them certainly add up, and all need to be accounted for. Losing track of that- losing touch with the value of money as one spends it -is a surefire way to fritter away one’s savings and wind up deep in debt. This maxim remains fundamentally true regardless of the size of one’s own net worth and budget.
Just as I link to think myself intelligent, I like to think myself reasonably adept at money management. After all, with only my $5/month allowance, occasional birthday checks, and sporadic income from babysitting, recycling, and other side ventures, I have managed to amass a nest egg which puts me snugly in the top quartile for net worth in my age group. But this paints a very one-sided picture, particularly given that the prevailing financial strategy which got me to where I am today consists principally of never paying for anything myself for which I can have someone else foot the bill.
As I have mentioned before, our household is chiefly a gift economy, where one’s purchasing power is not so much a matter of labor as social credit. If something is needed, it is bought without question or particular regard for the price. If something is merely wanted, it is considered and debated at length, until either it is bought on some special occasion, or it is forgotten about.
It is expected that in due course each person will be given or will be allowed to purchase out of the common household funds, a certain amount of luxury items or other frivolities. Those who exceed their share, or misbehave, are forbidden from making new purchases, or else receive fewer gifts on the relevant occasions. In comparison to the social credit aspect, the actual dollar price is almost trivial.
The actual finances of the house are handled quietly and efficiently without public discussion. For as much as I know my parents pride themselves on having passed on their frugality and money management skills, I know precious little about the actual financial situation of our household. This creates the awkward situation where money seems to just appear, and expenses charged to credit cards handle themselves.
Naturally, despite the insistence of my parents that I needn’t worry about it, I do keep a budget, meticulously tracking dollars spent, correlating receipts, and ensuring that the bank statements I do see- my personal savings account that I’ve kept since before I could sign my own name -match my own records. But with the stakes only ever as high as the occasional extra milkshake, or upgrade to a larger coffee, this is essentially a kind of pantomime game.
There are two things about this situation that scare me. The first is that a lack of exposure to expenses beyond what can be expressed in playground pocket money terms. I know how much a milkshake costs at the place I usually buy milkshakes, but couldn’t tell you the cost of the groceries that go into making it. I am dimly aware in the abstract that shopping at the grocery store is more cost effective than eating out, but I don’t know what would constitute a bargain in either case. This makes me dangerously vulnerable to price gouging.
I am also concerned that the money I do have saved doesn’t feel real. After all, price has almost never been a primary consideration, and my rigid saving has meant that almost every amount over a hundred dollars has gone into the bank. Though this is obviously the superior financial decision, as in a savings account at least my money can generate interest greater than the dust and lint it accumulates sitting in the house, it also means that I can no longer feel the paper currency in my fingers while spending it, but have to construct an abstraction around digits on a page.
Yes, I can imagine money in terms of the things which I may use it to purchase, but in addition to being merely another layer of abstraction, it is difficult to parse this in a meaningful way. At present there are no expenses, or even products that I feel a particularly pressing need to own, on a scale that is helpful. The primary luxuries I buy for myself are all in the $10-$20 dollar range, and many of these are foodstuffs, which I would buy even if I weren’t financially stable because of my medical diet. Even so, imagining an unusably large number of pizzas is not particularly more helpful than imagining ones and zeroes.
Besides which, it ignores the larger point: what stops me from going out and draining my bank account isn’t strictly frugality so much as social pressure. I’m not afraid of starving because I know that for almost any financial trouble I could get into short of setting out to lose money, my parents will bail me out. And if I was suddenly cut off, the meager sum in my account wouldn’t put a dent in my medical expenses for a single month, so I have very little incentive not to squander it before it gets seized by creditors. Rather, what stops me is that household social credit system; I don’t buy more for myself than I do for others because that would unbalance the whole regime.
What scares me isn’t that I can’t handle today’s financial problems. Rather I am afraid that someday off in the future, as I become responsible for handling my own matters more and more, that I will lose my benchmarks for understanding what purchases are necessary and what justifies what amount of spending, and the taboos that keep me in line today will erode and shatter. Then I will find myself with a lot of ones and zeroes, and lots of ways to spend them, and not a whole lot of idea how to manage them.
At some point after that, I fear, with no firm guidelines and only a vague grasp on what things should cost, I will be adrift without a reference point. And if, on that day, I don’t learn up from down and so forth very quickly, I will get a crash course in finance the hard way- by hitting rock bottom. There is then the risk that I will find myself unable to afford my medical regimen, and will either wind up deep in debt which will take an inordinate amount of time to repay, or suffer serious, possibly even fatal, health effects.
This idea of losing everything, despite my starting advantages, because of something that is intrinsic to others, but which I lack, either due to my disabilities or my unusual upbringing, is one of my greatest recurring fears; as is no longer having the resources to pay for my life support. Now, I don’t expect that this scenario is imminent by any stretch of the imagination.but of late it has begun to seem just a little too believable; just slightly too easily imaginable; for comfort. I could perhaps brush these bothersome anxieties off, but for the increase in rhetoric directed at me to the effect that, at my age and stage in life, I ought start making more moves towards future independence.
Being nothing if not prudent, I have already begun implementing measures to hopefully safeguard against the most deleterious effects of this scenario. To start, I have acquired another credit card from my parents, which I intend to use to build up a credit score with which to acquire a credit card under my own name. I have also opened up a checking account under my own name, through which I intend to centralize more of my finances such that I shall be able to more easily review spending habits, and hopefully expand my current budget from a mere exercise to an actual working financial plan.
For the purposes of this particular project, which I have chosen to call Project Clearinghouse for obvious reasons, I am opting to stick with option that are simplified at the possible expense of some small financial benefit. So, for my checking account, I chose a bank that is well known, widespread, and has plenty of online options over one that might possibly give me a better deal in the short term. The reasoning is twofold: first, that I am trying to set up infrastructure that will work for the next several years, and rather than try to divine the future, it is better to stick with options that allow me that strategic flexibility. Secondly, I am attempting to circumvent a scenario in which I become detached from financial reality, and it strikes me as more likely that this will happen if I am made to navigate a byzantine codex of regulations.
There’s a third reason, and that is that over the past few years, I have begun to realize the extent to which I can get in my own way if I am permitted to overthink things, as is my habit. This analysis paralysis is arguably as great a danger as the possibility that I will neglect planning entirely. Even ignoring the long term, if I were to permit myself to agonize over the minute differences in interest or fees for a week, there is a better than even chance that I would defer any decision for another week to think it over, and so forth.
In any case, what’s done is done. The account is set up, the first checks (despite having now spent as long in the United States as I did in Australia, I am still tempted to refer to them as cheques) have cleared and I have managed to, near as I can tell successfully, enable their mobile app and mobile payment system. I’m not entirely sure how the shift towards online payment and electronic checking, which is being openly encouraged by many of the institutions with which I deal, will impact my own designs, but that’s another topic for another time.
Getting my ATM/debit card activated has proven to be quite the ordeal, with the phone tree system not working, and the human operator to whom I was redirected was locked out of making any changes to my account after I gave my phone number, which despite being the very same number at which I have received from them the security codes to log into their app, and which I am quite positive I put down upon opening my account, did not apparently match their records, and therefore my identity was not proven. I was then told that I would have to proceed to activate my card in person.
I am left hoping that I shall one day look back on these present frustrations as worthwhile and helpful. Since I am undertaking this project not to solve a current ill, but to prevent future ones, I can do no more than guess at which is the best course of action. This is particularly troubling to me, as my track record is severely mixed at best. Nevertheless, it seems like the best course at present.