Tuesday, August 9, 2011

We All Need A 'Bottom Bank'

Some of you might remember a few years ago when some near (and hopefully dear) relatives of yours were going through South Jordan and were stopped and had their truck impounded because they were/are not the best at book work, and a just-past-teenie-bopper-girlie cop took exception to their lack of organization and had the truck impounded.....

So, there we were, grandparents in our mid-50's at 11:30 at night, on the Redwood Road sidewalk with the contents of the truck cab and truck bed stacked beside us like a couple of homeless people.  We could not see how this had come to pass - it just seemed beyond bizarre, but it might have been worse.

As it was, we called Chandler and he and Julie brought us their extra car and we drove home and came back on the next Monday and paid all the fines and tow charges and claimed our pickup.  But what would we have done if we hadn't had a cell phone, or someone to call, or any money to walk to a motel.....

We are wonderfully fortunate in that we have a depth of resources that could help us, but not everyone is so lucky.  In this article : "The Criminalization of Poverty" ,  Barbara Ehernrich writes about how, if you are poor, it is very possible for you to end up being a criminal, and it isn't that hard.  I'll just include a short quote - the part about having your car impounded kind of struck home to me:

"...... there are two main paths to criminalization, and one is debt. Anyone can fall into debt, and although we pride ourselves on the abolition of debtors' prison, in at least one state, Texas, people who can't pay fines for things like expired inspection stickers may be made to "sit out their tickets" in jail.
More commonly, the path to prison begins when one of your creditors has a court summons issued for you, which you fail to honor for one reason or another, such as that your address has changed and you never received it. Okay, now you're in "contempt of the court."
Or suppose you miss a payment and your car insurance lapses, and then you're stopped for something like a broken headlight (about $130 for the bulb alone). Now, depending on the state, you may have your car impounded and/or face a steep fine -- again, exposing you to a possible court summons. "There's just no end to it once the cycle starts," says Robert Solomon of Yale Law School. "It just keeps accelerating.""

It is of course a good thing to not be poor - we all are working to avoid that.  Things happen, rocks fly up and break windows and headlights...... there is an endless limit to what can break, or what we need or think that we need.  But we all need an emergency fund of some kind.

When our kids were little, they would sit on their money when they were playing 'Monopoly' so as not to let their siblings know how much they had.  One charming daughter coined the term 'bottom bank' for this little trick.  It was a good thing.  I don't know if she won or not, but she had a pretty good poker face, and I don't think her siblings knew how much she had in the bank.

We have all been advised to have some money available for emergencies.  If you are being advised by a financial guy, they will talk about having 6 months of your yearly wage ready to go - which I think would be nice, but is really silly.  I don't know of anyone that really needs money in the paycheck-to-paycheck sort of way that we and most of the people that we knew actually live that has anything like that.  

But when you think about actually falling into poverty, we should all have some kind of reserve that can be a 'last resource'....something that we would not use even to pay our cell phone bill, or for high speed internet...  Maybe it's only $50, maybe if we save our change we can grow it to $500 or $1000 or more.  That would be a pretty nice rainy-day fund for when the rain is coming down hard.  We are not a nation of savers.  Saving doesn't come easily to me, but it is important.  Anything you can save will give you some power in your life.  

Here is a little clip that shows the value of a 'Bottom Bank' over an investment bank...