Third World America (24 page)

“A credit union saved me from Bank of America,” wrote Joe McKesson on the Huffington Post.
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“Every day BoA had a way to take some amount of money from me—every day a fee ranging from 25 cents to 35 dollars. Once I went credit union, transparency came back into my life. I woke up with the same amount of money I went to bed with.… The robbery was over. I will never trust a large bank again.”

“All I can say is that nothing beats the personal attention a credit union offers,” wrote Consuelo Flores.
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“It’s the ‘Cheers’ bar where everybody knows your name.”

Deborah Bohn’s nineteen-year-old daughter, who had no credit history, was unable to get a car loan, even when she was offering to put 50 percent down.
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“Our credit union came through for her,” wrote Bohn.

The truth is that millions of people today are unnecessarily losing money every year to banks and other lenders. That is due, in part, to the fact that only 20 percent of households can afford to get quality financial advice.
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But new technology now exists that can change that.

Witness
HelloWallet.com
, a start-up company that, for a very small fee, acts as an online personal money manager, identifying savings opportunities for its users and alerting them to threats to their financial health before they become economic catastrophes.
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Launched in 2009 with a grant from the Rockefeller Foundation and touted by Bill Clinton, Ernst & Young, and dozens of nonprofits across the country, HelloWallet is giving
America something that hasn’t been available before: affordable financial guidance.

The site will automatically find you the best rates on financial products such as mortgages and credit cards and will alert you when your bank tries to increase your rates or charge fees.
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It also makes it easy to create, and keep, a budget: it keeps track of your accounts in a single place, categorizes your spending, and presents you with a breakdown of where you’re spending your money.

Best of all, the site is independent from banks, which means it can help you avoid fees and can give you unbiased guidance about how to make the most out of your money.
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The result is that HelloWallet could, for the first time in a long time, put banks back to work for their customers, saving the public billions of dollars every year.

Another good online tool is
Mint.com
, a free service that allows you to securely link all of your credit card, loan, bank, and retirement accounts for a great overview of your finances.
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The site also helps you to budget your spending with tools that easily divide your expenditures into a variety of categories, helps you plan the optimal repayment of your debts, and can send you alerts when accounts get low or when certain bills need to be paid.

If you are getting a tax refund at the end of the year, you might want to consider having less money withheld from your paycheck and using the additional cash to pay off debts rather than let the government hold on to it without paying you interest. And it’s important to keep track of your credit report and credit score, which can determine what type of interest rate you are eligible for.
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Also, start making saving a habit—even if you can only save a little each month.

In April 2010, President Obama issued a proclamation for National Financial Literacy Month.
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“While our government has a critical role to play in protecting consumers and promoting financial literacy,” the proclamation read, “we are each responsible for understanding basic concepts: how to balance a checkbook, save for a child’s education, steer clear of deceptive financial products and practices, plan for retirement, and avoid accumulating excessive debts.”

On top of this practical caveat emptor advice, perhaps the proclamation should have added “And remember: The people you think of as ‘service providers’ are actually out to get you. They may appear friendly, but they’re not your friends. They’re hoping to hook you and your family into a vicious cycle of debt. This is financial combat. If you want you and your family to survive, you’d better learn how to spot the financial land mines buried in your mortgage and credit card contracts, and keep yourself out of harm’s way.”

Earlier this year, I was reading
Consumer Reports
and came across an article offering “10 New Rules for a New Economy.”
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The first seven rules touched on the kind of personal finance tips you’d expect, things such as “assess risk” and “control spending.” But the last three rules caught me by surprise. They were:

Or, as Suze Orman puts it, “No Blame, No Shame.…
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The first, and most difficult, step is to absolve yourself and your spouse or partner of any guilt.… Whatever mistakes you feel you have made with money, whatever moves you wish you had or hadn’t made, are irrelevant.” That’s not the kind of counsel you’d normally get from a financial adviser—but it is spot-on. Focusing on the deeply personal aspects of “personal finance” is essential if we are going to effectively navigate these challenging times.

Karen Reivich and Andrew Shatté, authors of
The Resilience Factor
, have identified resilience as the key to how we deal with what life brings us: “Where you fall on the resilience curve—your natural reserves of resilience—affects your performance in school and at work, your physical health, your mental health, and the quality of your relationships.…
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We all know resilient people. They inspire us. They seem to soar in spite of the hardship and trauma they face.… Resilient people understand that failures are not an end point. They do not feel shame when they don’t succeed. Instead, resilient people are able to derive meaning from failure, and they use this knowledge to climb higher than they otherwise would.

“Resilient people,” they continue, “have found a system—and it is a system—for galvanizing themselves and tackling problems thoughtfully, thoroughly, and energetically. Resilient people, like all of us, feel anxious and have doubts, but they have learned how to stop their anxiety and doubts from overwhelming them. We watch them handle threat with integrity and grace and we wonder: Could I do that?”

Luckily, resilience, like fearlessness, is a muscle we can build up. The more we use it, the stronger it becomes, and ultimately, how we deal with adversity depends on how much we have developed this inner strength.

Dominique Browning, who lost her job as editor in chief of
House and Garden
, describes the long months after being knocked off her career path: “Privately, I was in a whiplashing tailspin.
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My nightmare had finally come true. For years, I had a profound dread of unemployment that went way beyond worrying about how to pay the bills. I would like to say that this was because of the insecure nature of magazine publishing, but my anxiety had more to do with my own neuroses—though I didn’t think of it that way. Work had become the scaffolding of my life. It was what I counted on. It held up the floor of my moods, kept the facade intact. I always worried that if I didn’t have work, I would sink into abject torpor.”

Indeed, after being fired she went through “months of depressed sloth.”
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But, slowly, she began to take daily walks, sometimes for miles every day, giving herself lectures: “Buck up.
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Just because something has failed doesn’t mean I am a failure. Just because something has ended doesn’t mean it was all a mistake. Just because I have been rejected doesn’t mean I am worthless and unlovable. Sound familiar? It would if you or anyone you know has gone through a divorce. I had hauled myself through one of those many years earlier. This felt like the same thing. Worse. A divorce you choose. Unemployment chooses you.”

Obviously, faith helps people develop the resilience they need in difficult times, but so do simple things such as learning to reduce stress by unplugging and recharging, getting enough sleep, and the walks and daily lectures like Browning gave herself.

Eventually, things turned around for her.
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“I hate to be the one to bring up silver linings, or worse, windows opening while doors are slamming,” she says, but over time she came to feel as if she had grown a new taproot, “one that reaches deeper into nourishing soil. I am more resilient. If I had to pin it down, I would say I finally fell open to the miracle of this world.”

Jim Laman of Holland, Michigan, is another great example of how resilience can get you through tough times. He spent twenty-one years working at furniture manufacturer Herman Miller before he was “downsized” in the economic tailspin that followed 9/11. He found his next job at a smaller company, but in 2006 he abruptly lost it in a mass layoff. “There was absolutely zero warning,” he says. “My benefits ended that night at midnight, as did my pay. I was devastated. Never saw it coming. They even kept the bonus that I had earned for the past year. I was bitter for a long time about that and it still bothers me, as the company was supposedly so ‘family oriented.’ I guess that came with a caveat!”

Laman found another job, this time at a manufacturer of truck transmissions in southwest Michigan. It was sixty-five miles away, but he kept his gas bill down by riding his motorcycle, even through treacherous weather, which saved him about sixty dollars per week. Then, in November 2008, as the economy reeled from the financial crisis, his company issued a round of pink slips—and once again, with just twenty-four hours’ notice and a month before Christmas, he was out of a job.

“It was not a merry Christmas,” he remembers, “but we got a few gifts for the kids and a free tree to put them under. I started selling things on eBay to help make ends meet, and have continued to do so sporadically to this day. Classic Herman Miller furniture is quite valuable, so we sold a few pieces
and I parted with a classic Saab and the parts I had collected for it for many years. I’ve sold about five thousand dollars’ worth a year on eBay, and it has helped tremendously. In the meantime, my wife lost her contract job at Herman Miller, which was another blow to us. During this time we were very worried about losing our home, and my parents helped us a little. I was so stressed that there were days I wondered if I could go on much longer, frankly. Unemployment benefits and the remainder of our retirement savings got us through. I looked into selling blood, any sort of factory work, doing odd jobs, anything for some income … but no takers.”

He filled out almost five hundred job applications. Frustrated, Laman broadened his search, first to Indiana, and then as far as Chicago, where he finally received an offer in mid-March 2009. In a complete upheaval of his life, he accepted the job.

“Soon after, I found a room to rent up in Evanston, about six miles north of where I work, and I still live there. I commute home to Michigan every Friday night, returning on Sunday evenings, so weekends are rather short, but we are making it work. People thought at first that my wife and I were separated or getting a divorce. But no, we are fine. We just live in different states! Kind of funny really, but I got a better cell phone plan and with that and email, we stay in fairly good communication. At times, I find out what is going on via Facebook, too! … I think it is about attitude and priorities: If you go in with a good attitude, good things will come your way. As a result I am involved in many things that I never would have done before, including company volunteer work, a softball league, and exploring the city on my own on my motorcycle. All new stuff—and kind of fun. Things I never would have imagined doing back in 2006 when I lost my job.”

For many left jobless by the recession, resilience has meant hitting the books, so as unemployment rose, college enrollment—particularly at community colleges—also increased. When Patty C., a director of service for a health-care company in Denver, Colorado, was laid off from her job in June 2009, for example, she kept herself busy for the six months she spent unemployed by earning new certifications and heading back to school for a degree in health-information management. For Patty, losing her job was a chance to sharpen her skills and upgrade her qualifications: “We have spent our lives dedicated to the companies we worked for,” she said. “Now is the time to focus on ourselves and rethink our next career move.” Unemployment also forced Patty to slash her family’s expenses, which she did with the guidance of coupon blogs and websites dedicated to frugality. When she did land her next job, as an operations manager for a nonprofit organization, she said that despite a 25 percent pay cut, she felt “secure about the future,” confident in her ability to get by with less and certain that her new education would “open doors … that were closed before.”

Lesa Deason Crowe, a small business owner who lives in Oklahoma City, Oklahoma, saw the financial crisis nearly destroy her twelve-person advertising firm. “It started in the news,” she recalled. “Every night, there would be another story about the recession, depression. This was in fall 2008. Clients started to get jittery and began to proactively get ready for ‘disaster.’ Part of that planning was to get rid of all the ‘fat’ in their budgets, which in my case meant cutting all advertising, marketing, and public relations work. My lowest point was when three clients quit in one day. I walked in, prepared for a typical monthly meeting, and the next thing I knew I was fired
on the spot. Three in a row. Our two largest clients and our fifth largest. Gone.”

She tried to keep her prized employees busy, but she couldn’t shield herself from worry, which kept her up nights. “My husband was in Iraq, my son would be asleep, the house was clean and I would lie there awake, staring at the ceiling, unable to sleep. Something like this haunts you. I worried about the people I work with, as well as my clients, because I care for them, they’re friends. I worried about the bills, about my business, about absolutely everything.”