I can’t figure out what I’m feeling about the situation: Scrooge or just the rest of the American people.
I don’t have to look far to see why people feel like they’re all scrounging for every dime. As the economy continues to heal, the level of outrage has gone up, even as the federal government looks to cut back. (Under President Trump, the size of the federal government has grown by 10 percent, from $3.3 trillion to $3.6 trillion.) If it’s not so bad when the feds get into a spending spree, when will it ever be?
Yet even as we celebrate the budget deal that finally moved things past the shutdown, much of us feel stuck in a rut of financial insecurity. And that’s no fun.
A recent Federal Reserve report found that, “Although improvements in the labor market continued to help alleviate financial distress among households and businesses in 2017, households were still worried about the direction of interest rates and an improving job market were not strong enough to translate into lower levels of financial distress.”
We may be spending less money than before the recession, but our skills, cash and housing can’t keep up with higher expectations for job creation. As my colleague Jason Riley says, “As the labor market tightens, wages will need to rise, too, because households won’t necessarily be able to substitute lower hours for higher wages. This means that people who are stuck in dead-end jobs will need to stay in those jobs to keep enough money to make ends meet. The problem is that so much of this trend is invisible — what are you doing on Friday nights? — that it’s hard to feel like you’re getting something from the recovery.”
The housing market is up, as it should be, but wages aren’t.
Americans don’t spend money on Christmas without reason, but few of us seem to have enough money left over to show our Christmas cheer.
In our increasingly uncertain economy, we need to rethink and maybe redesign some of our traditional ways of spending money. In the K-12 school system, we need to get better at helping young people with delayed gratification. It’s not as simplistic as it may sound, but suggesting that we can balance the books by handing kids money isn’t the answer. We need to teach them to say no to cravings for instant gratification. At some point, young people have to gain experience with stretching our pocketbooks. It may be as simple as waiting a little longer to order pizzas, as well as other treats. It may also mean waiting until they’re at the point where they’re comfortable making decisions on their own.
As I wrote in my column a few weeks ago, American consumers have been trained to like spontaneity, because we associate it with character and independence, even if spontaneity can’t be repeated very often. If we all had less trouble holding on to that mentality, we could spend more on those things we enjoy and give less to causes or organizations we don’t enjoy.
Even if we had the luxury of spending money on the things we enjoy and giving to causes that we enjoy, it would be foolish to see that type of behavior as somehow less admirable than giving money away. So don’t tell me about your Christmas cards or your heartfelt notes on homemade paper. We should go through our little jars for tchotchkes and mementos and combine them with some thoughtfulness.
I don’t know the specific answers to all our financial questions, but rather than focus on what you don’t have, give yourself permission to find the right answers.