Monday, October 27, 2008

Financial Fasting Holiday

I have guilt.

And the reason I have guilt is that I remember long ago the experiences that formed me and cut my teeth. And those experiences were putting myself through college, and not just college, but all living expenses, and doing so by working full time at the U of MN Police Department in their "campus cop" program WHILE ATTENDING SCHOOL FULL TIME and GRADUATING IN 3.5 YEARS.

I remember working over 120 hours in one Christmas week because not only would be get holiday pay (1.5 times) but if we'd get overtime on top of it, 2.25 times. This provided a perverse incentive at times to try to get 40 hours under your belt before midnight of Dec. 24th, and then try to work, if possible, all 48 hours of Christmas Eve and Christmas Day to maximize your 2.25 time pay. Sleep deprivation was very common (and if you think I'm making this up, you may certainly feel free to contact any number of UMPD veterans from those days who will vouch for me).

I started at $6.90 and finished with an hourly wage of $9.10. Which means, at most I was making around $20 an hour. So even in my best year, I grossed $20,000 while in college.

Still, I managed ALL my tuition and ALL my living expenses.

Oh sure, you had to control the other side of the formula too; expenditures.

I remember renting a room for $179 a month. Shared a bathroom and a kitchen with a bunch of guys and nothing ever got cleaned. I remember bringing in a bottle of bleach to the bathroom, pouring it over the floor and the toilet and seeing it foam as it killed who knows what lethal biohazard. I remember only going to McDonald's four times in my days at college BECAUSE MCDONALD'S WAS TOO EXPENSIVE! And I remember not drinking until I was 21 because the concept of spending $5 a drink, not to mention the time wasted trying to chat up the Bambi Sociology majors at the bar, was an impossible waste of time.

Ergo, why I have very little pity for people who "claim" they're "poor" and "can't get out of it" but meanwhile manage to have children they can't support.

Regardless, today I obviously make more than $6.90 an hour. But it is because I make significantly more than $6.90 an hour that I often look back, in an ironic sense, fondly to my tortuous days at UMPD in that back then I damn well know I earned it. In other words, I feel like I'm getting soft. I'm getting weak.

Could I manage another 120 hour work week?

Could I patrol 50 miles on bike a night for 3 years straight?

Could I walk the 10 miles a night in 10 below zero temperatures as I did in my youth?

The primary point is I don't want to forget what I had to go through to get to where I am today. And it is because of that, that I recently started seeing the point in "fasting."

Fasting is largely a religious activity. Various religions have it for whatever purposes they may be, but I started thinking that it would be a damn good idea to see if I could live within my old (inflationary adjusted, of course) budget of $5 a day of discretionary spending for two weeks. ie- a "financial fasting."

While this was for my own personal purposes, when I got to thinking about it, in the context of the financial/housing debacle we have before us, I started seeing "financial fasting" as actually something the US and other western nations are in dire need of.

The world's largest economic crisis since the Great Depression has been brought about, quite simply, by people spending beyond their means. Fiscal discipline and austerity is never taught, and because the west has been so successful (well, until recently anyway) we've been able to get away with it. But if there was a financial fasting, an INTERNATIONAL HOLIDAY, where people spend an abysmally little amount just to see if they could do it, as well as remind them of how hard times can get, I think it would do a world of wonder for not only personal finances, but national finances as well.

Ergo, the Captain has decided to institute a new holiday, of which it is purely voluntary to participate in.

Starting October 31st, people will have to live on less than $5 a day discretionary spending for two weeks (discretionary meaning outside the mortgage, car payment and various utility bills).

It will be called "The Financial Fasting."

You will have to buy booze at the liquor store and drink at home.

You will have to borrow movies instead of going out to watch them in the $12 per ticket theaters.

You will have to cut back on heat and wear sweaters.

You will have to eat bagels at home instead of going out.

You will have to spend time with family and loved ones to be entertained and engage in that long lost art of "engaging conversation" to derive utility from this time.

It is a period of where we test ourselves and our ability to get by on the bare essentials and, dare I say it, find out what's really important in life beyond consumption and spending.

And then, two weeks later, on November 13th at the midnight switching over to the 14th, there will be a grand celebration where you can then spend the money you've saved over the two weeks on something glorious and glamorous. There will be excessive mirth. High end dinners. Gaiety. Men can buy that plasma screen TV they always wanted. Ladies can buy that new dress they always wanted. And of course (since I am the founder of this holiday and can therefore dictate the rules) the Captain mandates French Maid outfits for all the ladies (if you don't like the rules, then make your own holiday!)

Of course, the reason I set the fasting date on October 31st, is because I am damn well going to see the new Bond movie, Quantum of Solace which comes out on the 14th, so truth be known, that's why it starts on October 31st.

Regardless, that doesn't change how serious I am about this holiday, nor the immense good it could potentially do. Therefore, if you find this a good idea, as no doubt some of you do, forward this onto your various friends and colleagues.

Remember, October 31st! You fast. 2 weeks. $75 bucks. No more.

The Captain will participate.

REFINEMENT

Based on the responses I have received from the various reading public I have decided to institute the following rules;

1. The $75 should be for each person, not per family. So if you have a spouse and a child, you will have...$225 (if I did the math right???)

2. Yes, you can fill up your gas tank before Oct. 31st. Or you can bike it.

3. The $75 applies to DISCRETIONARY expenditures. ie- Things that are already not set in stone. So if you have a car payment or students loans, etc. those are exempt. I'm talking stuff you DON'T have to pay. If you can live off of $5 a day, then you have traveled the "path o' the Captain."

4. A reminder or perhaps better stated, a bit of information I left out. Starvation is certainly par for the course. I was, WAS, 145 pounds when I was a senior in high school. It wasn't until I was a sophomore in college that I was at a party and there was a scale at the house the party was at where I weighed myself on it and found myself to be 118 pounds.

Sarcasm set aside, it is things like that, that make me remember what it was like to be poor and to ensure myself I don't forget it.

30 comments:

Michele said...

Since you're making up the rules, I have a question. And a follow-up.

Five dollars per person?
So, for a family of four, are we talking about $20 per day?

Arĉjo said...

Rules Clarification, please:

A. Would one have to fill one's car tank in gallon-and-a-half increments every morning on the way to work, or does this count into the general necessities "car payments"?

B. Food: most people could easily spend double or triple the $75 limit on a single week's trip to the supermarket for themselves alone (heaven help them if some yenta calls social services on their kids having to brownbag it to school one day). What's the rule here? (It seems like the obvious solution would be the "anything someone else cooks for you counts as a luxury item" rule, but I'm not the rulemaker here.)

C. Presumably, sales taxes are included in the $75 limit, such that one could really only spend $70 and change, yes?

Ryan Fuller said...

The Captain speaks wisdom. I'm all for it.

Actually, I come pretty close to this already, if I don't achieve it. A $50 video game for a month's entertainment actually turns out to be a pretty cheap way to do it, but I guess that's not for everybody.

Anonymous said...

Captain,

Your fasting idea is essentially mercantilist. Presumably, you will be working during these two weeks so you will be accumulating "gold". As Adam Smith pointed out, this is not a good strategy to become wealthy.

Smith's advice was never to refuse a good deal. To fast, you'll presumably refuse the occasional good meal.

dtrum said...

You have chosen the best possible starting day, probably without knowing it:

http://en.wikipedia.org/wiki/World_Savings_Day

RW of Ottawa said...

Captain, I too did my time as a student. I have also done my time as a struggling entrepreneur; I have also done my time as a divorcee, where she got all the loot - and the house - and the dog

No, I do not willingly do financial time.

No sir!

Eric said...

Slacker! I graduated from college with a mechanical engineering degree in 3 years! Just kidding about the slacker comment. ;)

Of course, unlike you, I had some student loans when I was done. So congrats on that accomplishment. However, I did pay them off (along with those I acquired from my wife) in four years.

langmann said...

Been there. Put myself through undergrad, graduate school, and medical school. The first two by working without getting any loans. Currently living on $0 discretionary spending a day to pay back medical school loan (no way I could come up with $150,000).

What peeves me off more than anything is not necessarily people who don't feel the need to work. Those people will generally always live meagre lives. Some people are also honestly not blessed with a great deal of intelligence.

What annoys me the most is people who get massive student loans for some strange arts program and then complain because the rest of us aren't paying enough taxes to lower their tuition.

University student loans should be run like one of those medieval Medici Banks, where they wouldn't lend you anything unless you could prove it could be paid back, and if you didn't pay it back they cut off one of your legs and put you in stocks. And I don't mean the stocks that are sinking right now due to crap price earnings ratios, but medieval stocks with tomatoes and a frenzied mob.

I don't see why I should have to pay for some basketweaving course that isn't going to do a squat of benefit for society and then be told that I am some sort of Nazi (like the guys that killed my ancestors) when I say that I don't want to pay.

bleechack said...

A fine idea. Those of us who made our own money should remember what it was like before we did so. Those who were born into privilege can experience want for the first time.

AeroGuy said...

Reminds me of my time at the academy when I would average 3 hours of sleep a night and my only luxury where the cans of monster on my desk waiting in anticipation for the all nighter that awaited me.
We need a way to legitimize the french maid idea so that the girls will follow through on it. Maybe a fetish raffle where the guys and girls write down their favorite fetish and put them in separate hats (one for the males and one for the females).

Tom said...

That sounds like a terrific idea. I'm usually one to not spend on things, but my wife sees all sorts of things we "need", and I usually give in.

I can restrain myself till the 14th. I'm really glad you set the time frame around the new Bond movie because there is no way I'll be missing it.

I might have to hold off getting my Call of Duty: World at War video game a couple days though. You getting that game Captain? It's World War 2 setting!

sab said...

I'm all in. I just got a job after a short period of unemployment and I won't get paid until Nov. 12th anyway, so that will keep me honest.

Anonymous said...

Are we allowed to start the fast with a full gas tank and deplete it?

Or should we be required to top off the tank at the end?

Anonymous said...

Hey Captain:

Here's an article I'd like your opinion on, if you deem it necessary.

http://www.chicagotribune.com/news/chi-obama-chicago-socialist,0,4048540.story

Thanks!

Ryan Fuller said...

"Your fasting idea is essentially mercantilist."

No it's not. Mercantilism was all about accumulating currency, basically just running a trade surplus with everybody. The Captain's idea is to get by on as little as possible for a while. While you're more likely to accumulate cash when you're living on such a small amount of money, that's merely a side effect and not the main purpose.

Anonymous said...

Not a problem. It happens during Hunting season and I am stocked up on ammunition. I will be in the middle of the woods and will eat what I shoot.
Unless however gas is included, then I am in trouble. I have a big truck to fill and ATVs... ...someone has to do their part for this Global warming...

Although since "Big Oil" has been so generous on lowering the prices I might be able to pull it off. you know "Big Oil" sets the prices... NBC and CBS told me so..)

Anonymous said...

I ALL READY HAVE A FRENCH MAID OUTFIT COMPLETE WITH FEATHER DUSTER, SO iF I HAVE MONEY THEN I'LL BUY SOMETHING ELSE, BUT BESIDE THE OCCASONAL DINNER OUT WITH FIRENDS I ALMOST NEVER SPEND MONEY ANYWAY, SO YOU MIGHT AS WELL COUNT ME IN TOO.

Alfred T. Mahan said...

Couple of points:

First, the West will continue to be successful; this is just a bump in the road of capitalism (and you, of all people, should know better-SHAME ON YOU!)...I'm not too worried.

Second, as a veteran of the UMPD myself, I fondly recall the ISAG conference, when any OT was authorized for a period of two weeks in the summertime, and some folks worked a total of 300 hours. I "only" worked 190, which paid my rent and tuition for the year.

Third, your plan pretty much describes what I do anyway. Why change a good thing?

Anonymous said...

Those of us who save for our own retirement already live this way! Although I live 60 miles from work and there's no way I can make it on that if gas is included. Otherwise, it's a piece of cake.

Paul E. Zimmerman, M.A. said...

The Cappy is my Shepherd; I shall not overspend.
He maketh me to lie down by ledgers of black ink:
He leadeth me beside the stagnant assets.
He restoreth my net worth:
He leadeth me in the paths of solvency for His name' sake.

Yea, though I walk through the valley of the shadow of debt,
I will fear no creditor: For thou art with me;
Thy blog and thy craft, they educate me.
Thou preparest a chart before me in the presence of mine enemies;
Thou annointest my wallet with cash; My bank balance runneth over.

Surely dividends and capital gains shall follow me all the days of my life,
and I will dwell in a reasonable house with a paid off mortgage until I become metabolically challenged. Amen.

Bike Bubba said...

I'm not in for your fast (I'll be observing /celebrating Reformation Day in this time), but kudos to you for remembering how you can make ends meet when there aren't as many dollars.

Capitalist Pig said...

I read all the time about folks who say they only managed "four hours of sleep a night," etc...while in college and so forth; is this really true, or was this just occasionally?

If I tried to average four hours of sleep a night constantly, I'd get ill (I know because it's happened before!). Yeah, maybe for a few weeks, but otherwise, I always need at least seven hours of quality sleep, preferably eight.

Dustin May said...

I don't understand why I should have guilt?

http://o2richenvironment.blogspot.com/2008/10/why-all-guilt.html

Kasia said...

I won't formally participate, because I refuse to spend good money on a French maid outfit. But with the exception of gas and a flusher food budget (ok, and way more eating out than I should do), I'm pretty much already there. My monthly entertainment budget is $13 for Netflix. Par-tay...

Oh, and I have non-standard expenditures right now (like for wedding invitations and such), so that gets hairy (though everything I'm doing is still cheaper than most weddings).

What I will do, though, is try to keep to the $5/day food budget and fast from all eating out on my days in town. (I do not control what is served at my mother-in-law-to-be's house out of town, but it's not out of my pocket anyway.)

One question - for people who have a well-stocked pantry, would you want them to calculate what their cost *would have been* (i.e. I make bread - do I figure out how much the flour would have cost)?

Ranty said...

$5/day is my smoking habit alone.

Crap.

AeroGuy said...

"I read all the time about folks who say they only managed "four hours of sleep a night," etc...while in college and so forth; is this really true, or was this just occasionally?

If I tried to average four hours of sleep a night constantly, I'd get ill (I know because it's happened before!). Yeah, maybe for a few weeks, but otherwise, I always need at least seven hours of quality sleep, preferably eight."

It is true that 4 hours of sleep a night is not sustainable indefinitely. For my case of referencing 3 hours of sleep a night I was referencing weekdays, on weekends I might sleep 14-18 hours a day. This also does not include opportunistic napping, I was eventually able to doze off even while standing up. It's like poison, you can't start a full dose right away or you'll die. You have to work your way up.

Anonymous said...

If the US and much of the world is headed towards, or already in recession, wouldn't it make sense to instead have a "spending" holiday to infuse the economy with spending (similar to a tax rebate) and get the sluggish economy moving again? The last thing business needs right now is for consumers to quit spending even further. Have the financial holiday AFTER this financial mess is sorted out.

Kasia said...

$5/day is my smoking habit alone.

That brings up an interesting point. I've noticed that the people who smoke tend to not be the ones who could afford to. It's not 100%, of course, but there does seem to be a general inverse correlation.

I find myself wondering how many people living in poverty might be able to slightly improve their living situation if they chose to forego alcohol and tobacco?

Bike Bubba said...

Anonymous, the "spending to save the economy" idea is profoundly Keynesian. Don't you know that your gracious host favors sound economics? :^)

Seriously, Bastiat more or less refuted Keynes' "paradox of thrift" a mere fourscore years before Keynes came up with it, if I remember correctly.

jgriffin316 said...

Hi Captain,

I don't know if I missed the post where you commented on the results of your fast. If you have and I missed it I apologize. I too, decided to take up the challenge and live off of five dollars a day. However, I had the following additional caveats;
1. This was a personal thing, I did not ask my family to participate with me. My children are young and so I do not see how this self deprivation could ever be the result of free choice as apposed to "doing what I think Daddy wants me to do."

2. I kept driving my car. To take the bus would have extended my total commute time from one and one-half hours to over four hours. Again, not practical if I didn't want my children to suffer as a result of my choices.

I ended my fast on the weekend and I found out a number of interesting things along the way.

1. Socializing takes money. As a working guy with small kids, most of my socializing happens either over lunch or after the children are asleep. As a result, I go out for lunch or go out for coffee later in the evening quite a bit. Curtailing these activities bit into my social life noticeably.

2. If you are at work, people expect you to be available. While I was fasting brought a lunch and ate it in the building where I worked. When people found me, it didn't matter if I had both cheeks stuffed with peanut butter and jam, they would expect me to stop eating and help them with whatever there problem was at the millisecond. I reminded me of why I started eating out in the first place; to have an hour of my time that was actually my time.

3. My discretionary income is mainly spent on food. I don't seem to be overly materialistic. I buy the occasional book or magazine but that is about it. However, whenever I socialize food and/or drink is involved.

4. Laughter carries in a house. I tried having buddies over for coffee in the evening thinking that I could be cheap, stay home and still have fun. But we all ended up all talking in hushed voices so that the kids would stop coming down stairs to see what we were laughing about.

5. You have to be more organized when you are fasting. I had to make sure that I packed a lunch the night before if I wanted to eat the next day. The only problem I had was the kids eating my bread, etc. and leaving me nothing (found that out the hard way).

6. You can still have great moments with your kids on little to no money. It's amazing how much fun a toonie's worth of Timbits can generate. (a toonie is a Canadian two dollar coin)


There were other things, but this list is getting longer than I intended. I hope others will publish the results of their own fasts.

jg316