| ||||||||||
| ||||||||||
— Media Maneuvers —
In his media column last week, The New York Times' David Carr wrote of "a smart young woman" in Hollywood who tells him that she is indeed feeling the effects of the troubled economy -- she's ordering drip coffee instead of lattes. "I waited a bit for the woman to crack a smile, to hammer me for being so credulous," Carr relates, "but then I realized she was serious." For Carr, this woman is a prime example of Hollywood's "indifference" to what's going on in the rest of America, where folks are fretting over plunging 401(k) balances and are in a general state of financial panic. But Carr doesn't realize is this young woman isn't totally in la-la land. On the contrary, she's just following the advice being doled out by an ever-so-helpful personal finance press -- cut out those lattes and watch the savings pile up! The demonization of the latte has been a pet peeve of this column, going back to 2006, when some financial-help gurus and their media enablers tried to convince unenlightened renters that all that stood between them and the American dream of home ownership was their penchant for froufrou coffee. (And a subprime mortgage, we suppose.) Now, of course, the message is different: Skip that latte and retire in style! "If invested, the savings from brewing coffee at home and 'brown bagging' lunch over the span of 25 years would be staggering," chirps a story in the Colorado Springs Business Journal.
Interestingly, the big personal finance glossies aren't the ones espousing the latte-less lifestyle. (The most recent issue of Money suggests charging a latte a month to a rarely used credit card to keep the account active.) This time, it's more of a local newspaper phenomenon, with skip-the-latte pieces spotted in The Columbus Dispatch, the Allentown Morning Call and the Chicago Tribune. The trend is so ubiquitous and so annoying that we found at least two money-saving-tip stories -- in USA Today and North Carolina's The News & Observer -- boasting that they are NOT suggesting forfeiture of the foamy fix. Instead, The News & Observer tells us to wear long underwear and "turn the dishwasher off when it gets to the drying cycle and open the door to add heat to the room." If only Bob Cratchit had thought of that. Such frugal behavior, it seems, is in, so much so that BusinessWeek decided to put it on its cover last week. Never mind that the actual business news of the past few weeks -- bank failures, bailouts, markets in crisis -- was unprecedented. Instead, the magazine trained its eye on "The New Age of Frugality." Intones BusinessWeek, "People who overconsumed during the past decade are now rejecting extravagant lifestyles. They're spending less, and more wisely. Some are getting their finances in order. Others are fearful of losing their jobs, shocked by investment losses, or hunkering down amid the general uncertainty." Really? We're shocked. And just to make sure we don't think BusinessWeek is making this all up, the magazine wheels out the Ingram-Behre family, former spendthrifts who now have no credit-card debt thanks to a year of walking everywhere, dining at home, shopping at consignment shops and turning off lights when they leave a room. We're told that Leah Ingram even has a blog, " 'The Lean Green Family,' where she encourages others to be more frugal." And green, but BusinessWeek doesn't really concern itself with that. Indeed, there's lots of stuff the magazine doesn't tell us about Ingram, though she and her family clearly serve as the centerpieces of the story. ("Ingram and Behre are harbingers of a dawning Age of Frugality," the magazine declares.) It turns out Ingram, a self-proclaimed "lifestyle expert," has written several books and countless magazine articles on shopping, gift-giving, etiquette, wedding planning, etc. And on her Web site, she informs that The Lean Green Family blog is "the topic I hope to cover in a forthcoming book and TV show." That's great for Ingram; more power to her. But what does it say about BusinessWeek? If you're going to write a lifestyle trend story based solely on anecdotal evidence, shouldn't your main anecdote be about an ordinary person -- not a plugged-in media-type looking for a book contract? Or maybe BusinessWeeek is just getting frugal with its reporting assets. Yvette Kantrow is executive editor at The Deal. Comments
From: Afi Scruggs,
Even if I gave up a latte a day ($5). Where am I going to invest that great big $100 a month? Alex, that $100 pays the telephone bill. Or the Cellphone bill. Or the gas bill - I'm on a monthly payment plan. It fills my gas tank for three weeks. Or, you could save it and have $1,200 at the end of the year. And Yvette, don't laugh at that family who saved money by cutting out lattes, abandoning the coffee shops, eating at home instead of eating out and shopping in consignment shops. It works. I'm just afraid that my wardrobe will suffer because more folks will be buying clothes from Goodwill, than donating to them.
Posted on:
October 19, 2008 9:52 PM
From: Alex,
Afi, You're missing the point. Yes, the $100 pays the gas or the electric or the whatever. Yes, it's $1,200 at the end of the year. But the STL (skip the latte) mantra is fundamentally ridiculous on its face. Once we all give up our lattes, the talking heads will tell us to give up ________. And the _______ will be something like "name brand canned goods" or "fresh bread over the day-old stuff which is really almost just as good." And it will be a continually recycled meme of giving up. My $1,200 a year savings, so I can pay my electric bill? I don't want to sound too selfish, but I didn't sweat all those years in school and job after job to now enter into the uberthrift period of my life, scrimping and scrapping, while the should-be-indicted-and-thrown-in-jail CEOs and hedge fund managers and boards of directors who still managed to come out of all of this with millions of dollars in hand get rewarded. Personally, I don't have a latte every day. But you know what? I also know not to spend the rent money on lattes. How about answers to these two questions: 1. People take my money to invest in a 401(k) for me. For their "knowledge," and for pushing a couple of buttons, as almost everything in the 301(k) mechanism is automated, they get x percent of my money. Whether I get rich or starve to death, they get paid upfront and from the top. That's what they do in Vegas. Now why EXACTLY am I paying someone for advice that will leave me poor? Why is it that NOT ONE SINGLE ONE of these expert-filled portfolios will guarantee a rate of return? Is it because all these experts are basically just taking a wild stab and doing little better than anyone else could? Go on, let's see someone who's urging me to skip lattes answer that one. 2. How about someone writes an article on 401(k)s. You buy stock, hang on to it, then sell it as you retire. Yeah, me and everyone else in my age group. When I hit retirement, aren't all those stocks, being sold simultaneously, going to drop in price as they're sold? There's no guarantee that the smaller number of employees coming up behind me and still buying into their 401(k)s are going to be able to purchase all the stocks that are flooding the market. Has anyone actually looked at this? I wouldn't mind the whole "scrimp, scrimp, do without" lecture, but why should I? Look at the ads for retirement everyone's showing now. Vital, elderly woman painting on a beach without a house in site. She's not stuck in the nursing home waiting to die while she chokes down substandard food and the interns steal her few possessions one by one. You know what I suspect? When (if) I get to be a similarly vital old man, after all those years of doing without, I'm not going to have a beach to retire to because a bunch of sharpsters were able to scrape every penny they could out of me. They're on beachfront homes, laughing themselves silly over the millions of drones they bilked for decades with the whole 401(k) scam. So skip your latte. I have little confidence in the amount of kindness the future will hold for those people for whom the price of a latte matters in the first place.
Posted on:
October 20, 2008 9:08 AM
From: Joel Whitaker,
Skipping a latte may not seem like a big deal, but it is -- especially for people who have no savings, no emergency fund at all. The problem with most of the financial "advice" given in popular prints today is that it requires heroic actions. Almost none of us can do heroic actions for very long. That's why religious groups that advocate fasting also have time limits; one is more likely to maintain a fast for 40 days than for a year. But all of can give up our latte each day, put the money into a savings account at EmigrantDirect.com or the equivalent -- earning 3% -- and at the end of the year have more than $1000 as an emergency fund. That $1000 is enough to avoid having to use a credit card for a number of emergencies -- replacing a set of tires, for instance. And for a worker making $48,000 a year, who thinks he should have a rainy day fund equal to three months spending, that $1,000 means he's one-third of the way to his goal.
Posted on:
October 20, 2008 12:40 PM
From: Richard,
You can nit-pick, but Yvette gets my vote here. Frugality is good, but why obsess about a very modest savings by cutting out - they never say cut DOWN, only eliminate! - one of the few indulgences that mildly lifts one's spirits while contemplating, for example, how to finance college for our twins beginning next year. The idea that latte deprivation will put much of a dent in 2 X $50,000 a year for private colleges is hilarious; even two state school tuitions will call for considerable loans - if they are even available.) Giving up costly meals out, delaying big ticket purchases and foregoing vacations make sense. But guilt-tripping baby boomers over their lattes - which, after all, are not simply fancy coffee but usually consumed with a bit of ambience, relaxation, and much needed socializing - is not the road out of credit Hell. In fact, why not require the credit-default-swap geniuses and subprime-peddlers to buy everyone in the US a Starbucks card?
Posted on:
October 20, 2008 1:01 PM
From: Afi Scruggs,
Joel, thanks for your comments. You've understand my point. And Alex, "but I didn't sweat all those years in school and job after job to now enter into the uberthrift period of my life, scrimping and scrapping, while the should-be-indicted-and-thrown-in-jail CEOs and hedge fund managers and boards of directors who still managed to come out of all of this with millions of dollars in hand get rewarded." ... You're not saving for the CEOs. You're saving for yourself. If you have an emergency fund, that's great. The majority of Americans don't have one. Our consumption habit is costing us, and learning to save isn't really that much to ask. By the way, giving up a latte a week is not "uberthrift." Not by any means at all.
Posted on:
October 20, 2008 5:13 PM
|
|
|
|
|
|
Thank you, Yvette. I am so sick of all these simpering, smirking, Sarah-Palin-would-jump-up-and-applaud-'em-Joe stories about "thrift."
Even if I gave up a latte a day ($5). Where am I going to invest that great big $100 a month? I can just see me dialing up a stockbroker. "Yeah, put Buffett on hold. I got me a Benjamin to hand over to you. Yeah, um, gimme 2 shares of McDonalds."
Oh, yeah. Gravy train with biscuit wheels. And there goes my entire lifetime's earnings to make up one panel on the golden parachute some CEO just got for helping to run the economy into the ground.