Eleven years ago, I left a job at a small company. My boss, the head of the company, agreed to call the break-up mutual, but I was leaving the organization without any prospects for a new job. I spent the next few months looking for a teaching job that matched my interests and my degree, but this was well into the school year, and the positions were not forthcoming. After difficulty coming up with rent and after some kind of miscommunication with my landlord, I found myself without a place to live and an increasing mountain of debt.
My father stepped in and allowed me to stay with him. I was motivated to change this situation, as I had no desire to be a twenty-five year-old living with his father. He was gracious, and I was thankful, but we both understand that the more temporary this situation would be, the better it would be for everyone. I found a job with a corporation — and I stayed with the same company until I quit a few years ago to work on Consumerism Commentary and other entrepreneurial projects full-time. Within a few months of living with my dad, I was starting to build up my net worth and could afford to rent an apartment. I began taking budgeting seriously and figured out where I could save money.
I was lucky to have family to fall back on during difficult times. I never assumed someone would be there to help if I stumbled financially, but it worked out for me. It wasn’t a situation I wanted to stay in, so I was motivated to change the situation and improve my life.
It would have been risky for me to assume that someone would take care of me, yet this is a fairly common attitude. Faith in yourself should come before faith in others if you plan to build wealth in order to meet the goals you set for your life. If you sit around and wait for the world to provide you with what you need, or if you have no fear of consequences because someone else will have your back, you give up your ability to grow.
When a person believes their actions have no effect on their ability to earn wealth, and instead waits for their family, the government, or God to take care of them, his likelihood of success falls significantly. These are all worthy of at least some faith, but modern economy and culture will make it difficult for anyone who doesn’t have a strong concept of self-efficacy to succeed.
Don’t rely on your family
It has been common in many cultures throughout history for multiple generations within a family to live together and take care of one another. Even in more modern, developed cultures, where working for a living is an integral part of survival, those who cannot work, whether too young, too old, or have some other impediment to physical activity or mental capacity, are supported by their more agile family members. Children obviously live with their parents until they have developed into capable workers, and sometimes, but not always, the adults who raised the children come to rely on them later in life, reversing the roles.
Unless a plan has been discussed for a long time, someone approaching retirement age shouldn’t expect their children to support them once they don’t have a steady or livable income. While there can be extenuating circumstances and every family is different, you shouldn’t want to be a financial burden on those closest to you. Manage your money today and save for the future so you don’t have to rely on your children or other family members later on. You don’t know whether they will be in a position to help.
Don’t rely on the government or charity
Regardless of whether you agree with the philosophy, the government provides assistance of various types to families who for whatever reason are needy. Taxpayer subsidies and support for the good of society come in the form of welfare, subsidized student loans, unemployment benefits, tax incentives, retirement plans, public schools, and transportation infrastructure. Some of these we count on for living our lives day-to-day, some we count on being available should we find ourselves in the difficult position of being unemployed during a recession, born into a micro-culture where basic needs for survival take precedence over education, or an unwitting victim of an accident that renders us unable to work.
There is a fear that some of the taxpayer-funded backup systems are considered a primary method of support. People are outspoken with their feelings that other find ways to scam social services, taking financial support from what has been set aside for truly deserving households when it’s unnecessary. Society does a pretty good job of creating stigmas around certain, but not all, types of government assistance, and that’s one of the reasons the food stamp program has been rebranded as “SNAP.”
I’m not saying this happens often, but neglecting sound financial decisions with the intent of taking advantage of government benefits you might automatically receive is not a good way to build wealth and achieve financial independence. It’s not even guaranteed to provide enough support just to get by. In some ways, the recession helped make that clear.
Before the recent recession, I’d often heard the prevailing opinion that people would be happy to live off uninsurance benefits for as long as possible rather than find a new job, work, and earn a living less reliant on taxpayers. With employment difficulties stretching deep into the middle class and even the upper middle class through the recession, more people seemed to understand that living off of unemployment benefits is not a pleasant experience and is not something people would want to extend unless absolutely necessary.
Charitable or religious organizations also provide financial support within their communities to the neediest of families. Save the charity for those who don’t have the means for self-support. Charities and government assistance can disappear at any time, so not only is it insufficient, it’s unreliable to wait for public or private assistance.
Don’t rely on God alone
Although more common in those who have lost faith in the world around them and their own abilities, relying on God to take care of you will prevent long-term financial growth. Now, the religious response to such a thought may be that financial growth is a form of greed, and is unnecessary. Wanting to live a life during which money is not an obstacle is not a form of greed. Financial independence lets you do more with your life without barriers, and this flexibility opens up new opportunities to live a life of value, helping others, and working for the world.
Free will and determinism are questions that have stymied philosophers for generations. A belief system that accepts that all decision-making is predetermined, the day-to-day decisions don’t matter. I think we do have free will, and every decision is important and can lead to a variety of possible outcomes, and whether that’s predetermined doesn’t matter. We still have to make the best choices to fully take advantage of every opportunity to thrive.
The discussion about relying on God to solve our problems without our own action is best illustrated in a story. I’ve heard it told many years ago, but I’m quoting from the West Wing, where I heard it retold most recently:
You remind me of the man that lived by the river. He heard a radio report that the river was going to rush up and flood the town, and that the all the residents should evacuate their homes. But the man said, “I’m religious. I pray. God loves me. God will save me.” The waters rose up.
A guy in a rowboat came along and he shouted, “Hey, hey you, you in there. The town is flooding. Let me take you to safety.” But the man shouted back, “I’m religious. I pray. God loves me. God will save me.”
A helicopter was hovering overhead and a guy with a megaphone shouted, “Hey you, you down there. The town is flooding. Let me drop this ladder and I’ll take you to safety.” But the man shouted back that he was religious, that he prayed, that God loved him and that God will take him to safety.
Well… the man drowned. And standing at the gates of St. Peter he demanded an audience with God. “Lord,” he said, “I’m a religious man, I pray, I thought you loved me. Why did this happen?” God said, “I sent you a radio report, a helicopter and a guy in a rowboat. What the hell are you doing here?”
The bottom line is that we alone have responsibility for our financial decisions and the outcomes that result. A person who takes the approach that someone else will take care of him and the consequences of decisions don’t matter is eventually going to find himself in a needy position, and most likely unable to fulfill those needs through the kindness of others. Don’t wait for your family, the government, charity, or God to take care of you. Have faith in yourself so you can be strong financially, opening up your possibilities of affecting the world positively without the encumbrance of monetary constraints.