adults http://www.wisebread.com/taxonomy/term/8673/all en-US Treat yourself like a child to be more grown up http://www.wisebread.com/treat-yourself-like-a-child-to-be-more-grown-up <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/treat-yourself-like-a-child-to-be-more-grown-up" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/parent-and-child.jpg" alt="Parent and child" title="Parent and Child" class="imagecache imagecache-250w" width="250" height="181" /></a> </div> </div> </div> <p>This post is about repurposing a trick that grown-ups use to manage a child&#39;s wants.  You know the one.  It starts with pointing at a substitute.  Then, the grown-up frames one of two questions, such that the answer is always &quot;you don&#39;t need one.&quot;</p> <p>Whatever the child wants--let&#39;s call it X--the adult can always ask one of two questions:</p> <ol> <li>You&#39;ve got a perfectly good X--you use it all the time!  Why should I buy you a new one?</li> <li>You never use the X you&#39;ve got!  Why do you need a new one?</li> </ol> <p>Now, I&#39;m going to say in a minute that this is a useful way to think about things, but before I do, I want to acknowledge that grown-ups often use this structure to play what amounts to a cruel trick.  Until the child learns the structure, there&#39;s the implication that the child could get his or her wants fulfilled by switching--abandoning use of something needs to be replaced in the one case, or going through the motions of using something that&#39;s not really useable in the other.  This, of course, is a futile maneuver, because the adult then merely switches to the alternate question.</p> <p>Still, the underlying logic is entirely valid.  For pretty much anything you&#39;ve got, you&#39;re either using it--which proves that you&#39;ve got one that works and therefore don&#39;t need another, or else you&#39;re <strong>not</strong> using it--which proves that you <strong>certainly</strong> don&#39;t need another one.</p> <p>I&#39;ve had good luck in using this trick to manage my own wants.  And, since I&#39;m a grown-up, I can do it without being obliged to go on and turn it into a cruel trick.</p> <p>There&#39;s all kinds of stuff I want.  But, when I think of some new thing that I&#39;d like to get, I can say to myself, &quot;You don&#39;t need an iPhone--you&#39;ve got a perfectly good cell phone.&quot;  I can then let my inner child and inner adult argue for a while, with the child explaining that my old cell phone has crappy internet features and the adult pointing out that I spend plenty of time accessing the internet on my computer, so why would I need to access it on my phone as well?</p> <p>As the argument rages on, I can pay attention to either (or both!) sides of the adult&#39;s trick questions:  If I&#39;ve got a perfectly good one that I use all the time, why do I need a new one?  If I&#39;ve got one that I hardly ever use, why do I think getting a new one would make me any better off?</p> <p>Since I&#39;m in charge of my own spending, I&#39;m in a position to let myself be convinced by my arguments.  After all, there are sometimes good answers, even though they don&#39;t work for children.  Some things that I use all the time need to be replaced because they&#39;ve worn out.  Some things that I never use need to be replaced because the reason that I never use them is that I foolishly bought a crappy one that never worked well.</p> <p>When I take just a minute, now and then, to treat myself like a child, I find it a little easier to make the grown-up choice.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/treat-yourself-like-a-child-to-be-more-grown-up">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should Master</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-only-6-rules-of-frugal-living-you-need-to-know">The Only 6 Rules of Frugal Living You Need to Know</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-many-reasons-to-make-do-with-less">The Many Reasons to Make Do with Less</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-do-a-spending-fast-in-16-easy-steps">How to Do a Spending Fast in 16 (Easy!) Steps</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-frugal-living-skills-you-should-be-teaching-your-children">7 Frugal Living Skills You Should Be Teaching Your Children</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living adults children grown-ups needs wants Mon, 21 Jul 2008 12:46:15 +0000 Philip Brewer 2253 at http://www.wisebread.com Strategies for households with more than one adult http://www.wisebread.com/strategies-for-households-with-more-than-one-adult <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/strategies-for-households-with-more-than-one-adult" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/morning-at-home.jpg" alt="Adults around the breakfast table with multiple iBooks" title="Morning at Home" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>The strategy for households with a single adult can be disposed of in the first paragraph: Earn enough money to buy everything your household consumes, plus provide through direct labor all the other needs of your household. Add one or more additional adults to the mix, though, and your options expand considerably.</p> <p>Actually, even with a single adult there&#39;s some flexibility in that &quot;direct labor&quot; category. A single adult has the option to hire people to do the things that they lack the time, skill, equipment, or inclination to do. You can hire people to do almost anything: Fix your car, mow your lawn, plow your driveway, raise your kids, etc. Plus, even a busy single adult has some time that could be devoted to producing things that they&#39;d otherwise have to buy--knitting sweaters, brewing beer, growing a garden.</p> <p>The structure of the labor market (in the US, at least), is such that there&#39;s very little flexibility for a single adult in the job market. You can&#39;t just say, &quot;I&#39;d rather work X hours a week, so that I&#39;d have an extra 40-minus-X hours to directly satisfy my household&#39;s needs for services.&quot; Or, rather, you can say that, but most employers will just laugh at your funny, funny joke. (Even the idea that 40 hours covers your obligation to your employer amounts to black humor for many people.) There are part-time jobs, but they tend to pay disproportionately less and to lack benefits.</p> <p>There is the option to <a href="/opting-out-of-the-money-economy">opt out of the money economy</a>--to live as subsistence farmer or a <a href="/encounter-with-a-freegan">freegan</a>--but there are limits even to that (subsistence farmers have to pay taxes too). In any case, it means living at a lower standard of living than most people would choose. </p> <p>A second adult vastly increases a household&#39;s flexibility and stability, and raises its standard of living. That&#39;s true with almost any division of labor.</p> <h2>Zero adults working in the money economy</h2> <p>From the dawn of mankind until the invention of money, this was the only structure available for households. In only slightly diluted form, it remained common until about the beginning of the 20th century. Even after a large fraction of the population had moved to cities and taken jobs, many people still lived on farms and directly provided a large fraction of their daily needs--food from their fields and gardens, milk from their cow, clothes made at home, etc.</p> <p>Even with more than one adult to share the work, this strategy provides a standard of living that&#39;s low enough that most people don&#39;t choose it. Plus, even if you think you might like it, it&#39;s a hard way of life to experiment with--it requires a good bit of capital (in the form of land and a house) and a vast array of skills that we could have learned from our great-grandparents, but that aren&#39;t so common any more. That makes it hard to &quot;try out&quot; for a few weeks to see how you like it.</p> <h2>One adult working in the money economy</h2> <p>Until the 1960s or so, this was the most common arrangement. In a lot of ways, it provides the best of both worlds. One person working full time can earn enough money to buy everything a household needs to buy in the money economy. One person with a <strong>good</strong> job can provide that, plus health insurance for a second adult and any number of children. (Insuring additional adults is not so easy.)</p> <p>Additional adults in the household can perform a wide range of tasks, reducing or eliminating the need to hire them done. Child care is a key one, but the whole range of work that needs to be done is on the plate: cooking, cleaning, laundry, gardening, lawn care, car repair, home maintenance, etc.</p> <p>There&#39;s also a good bit of additional flexibility for a second adult to work part-time in the money economy. With one person working at a job that provides benefits, some of the negative aspects of part-time work become non-issues.</p> <p>In additional to the flexibility that a second adult provides, there&#39;s also some extra stability. If the person who has been working loses his or her job, all the adults in the household can begin separate job searches. That will minimize the time that the household goes without income. If the adult who&#39;s been working can&#39;t do so any longer (because of a health problem or some other issue), another adult in the household can enter the money economy.</p> <h2>Two adults working in the money economy</h2> <p>Household with two adults in the money economy have become common in the last 25 years or so. The extra income lets the household buy more stuff. Whether that amounts to an increase in standard of living is a more complex question.</p> <p>Each additional adult entering the money economy after the first provides diminishing returns. A second worker earns additional money, but at the cost of whatever household work that person could have done. A second worker may also receive benefits, but two sets of benefits are not twice as good as one set of benefits. The tax situation of a two-income household is better than it was, but a second income is still taxed more heavily than a first income.</p> <p>Still, there are many good reasons for a second adult to stay employed. Keeping his or her skills up-to-date is valuable, as is having a resume with current work experience. Staying active in one&#39;s field is useful for maintaining contacts which might be crucial in finding another job. Some people choose to work in the money economy simply as a way to be in daily contact with like-minded people. Still others do so because they don&#39;t feel they can rely on their spouse to provide a steady income.</p> <h2>More than two adults</h2> <p>Many households have more than two adults. They&#39;re often related--households with adult children at home, households with a in-laws or grandparents (or aunts, uncles, and cousins) come to stay--but they don&#39;t need to be. Some are religious groups with a spiritual reason to come together. Some do so entirely for economic reasons. Still others just like one another and want to live together.</p> <p>Just like married couples, they can integrate their finances completely, partially, or not at all:</p> <ul> <li>A married couple renting out a room wouldn&#39;t need to mingle their finances with their border beyond just cashing the rent check.</li> <li>A group of students sharing a house might all keep separate bank accounts, but put money into a common fund to buy groceries and then take turns cooking.</li> <li>Three or more adults can live together, pool their income, and share the tasks of housekeeping.</li> </ul> <p>The IRS code has a provision for members of &quot;income sharing&quot; groups to file their tax returns on equal shares of the income of the group enterprise. It was created for communal groups like the Shakers, and requires that the group state a religious or spiritual purpose for their coming together, but thanks to the first amendment, the IRS can&#39;t really police what&#39;s a valid religious reason and what isn&#39;t. The group does have to have some sort of group business activity--the IRS doesn&#39;t generally allow it if three adults who live together all go to separate jobs--but if there&#39;s any kind of business that some of them work at, the option should be available.</p> <p>Adding a second adult to a household brings with it a huge jump up in standard of living and stability. Additional adults continue to do so, although with diminishing returns. </p> <p>With extra adults working in the money economy comes both extra income and extra income stability. (Just having a border paying rent means that losing a job doesn&#39;t result in income dropping to zero. More integrated households with multiple adults can be more stable yet.) It also provides extra flexibility--some fraction of the group can work in the money economy, the rest can do work that they would otherwise need to pay someone to do or else let go undone. And there&#39;s no need that the fraction remain constant; members can enter and leave the paid workforce in whatever ways give them the life they want.</p> <h2>Predictions</h2> <p>I think we&#39;ll see the average number of adults per household go up. The idea that a single person can make enough money to set up housekeeping as a one-person household off his or her first job is really quite recent. In many cultures (and in our own until just the past hundred years or so), young adults live at home until they get married, and often even after they get married.</p> <p>I might be wrong, though. I&#39;m frankly quite surprised that we haven&#39;t already seen a surge in larger households because of the mortgage crisis. Vast numbers of households seem to have fallen behind on their mortgage, and then gone into foreclosure and lost their house, without even considering renting a room to a border.</p> <p>I can imaging a family scrimping and saving to enjoy the luxury of a household with only family members. But preferring to <strong>lose your house</strong> rather than let a stranger live there with you seems very odd to me.</p> <p>So, I may not have my finger on the pulse of modern households. Still, the advantages of multi-adult households are significant. The extra stability and extra flexibility mean both a higher standard of living and extra security.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/strategies-for-households-with-more-than-one-adult">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/meet-meg-favreau-our-senior-editor">Meet Meg Favreau, Our Senior Editor</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/february-roundup">February Roundup</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/self-sufficiency-self-reliance-and-freedom">Self-sufficiency, self-reliance, and freedom</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-good-writing-skills-saves-and-earns-money">How good writing skills save and earn money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/another-path-to-recovery-higher-incomes">Another path to recovery: higher incomes</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Frugal Living Career and Income adults freegan household Sat, 02 Feb 2008 14:55:02 +0000 Philip Brewer 1736 at http://www.wisebread.com