Are You Better Off Than You Were Four Years Ago?

Both current Presidential candidates are bandying about this question, with differing answers: “Are you better off than four years ago?” An illuminating interview with an economic journalist on Terri Gross' Fresh Air program answered that the nation was better off as a whole, whereas many individuals were worse off. Thanks to a trick of wording: both campaigns are right.

We don't need to subscribe to one party or another to ask, “am I better or worse off?” And, “how do I know?”

How do you spell success?

A lot of this is in how you define “better”; what does your “success” look like? My success probably wouldn't be measured very highly by an economist; I was making a lot more money in 2008 (about $80,000 a year, plus my husband's less regular pay of about $20,000 a year). Here in 2012, I'm making less than my husband was in 2008; he's making about $45,000 as a sergeant in the Army.

But in so many ways, we're better. Thanks to our greatly reduced expenses with me working freelance jobs (so I don't need a nanny) and my husband being overseas where he can't take part in expensive activities (like traveling, eating out, drinking, etc.), we've been able to pay off some debts and we've both opened IRAs.

Most of all, I feel I'm successful because I'm happy with my chosen career, and happy that I'm spending money where I get the most value. You know, really great coffee and bicycles! My garden is more lush, my living room more organized, and my dining room more well-used than in 2008.

I've got a variety of rewarding volunteer jobs. I've done something crazy I've always dreamed of - started a literary magazine for parents - and I've had some successes in my literary writing. I may not be rich in income, but I'm rich in friends and ideas and experiences.

It's about emotional as much as financial security

What we are worried about, when we kvetch over our financial security, is really our emotional security. It's why economists aren't surprised that sometimes our economic measures can be falling while our “consumer sentiment” rises. Here's how you might measure your own emotional/financial security:

• Do I have a job that gives me a sense of creation, or contribution to society, or well-being? It's not just having a paycheck that makes us feel secure; it's having a paycheck in return for doing something that feels meaningful to us. Everyone's “meaningful” is different; I actually felt great as an investment banker back in the 1990s. You can feel a sense of creation serving great tacos to customers of a food truck. How is your job satisfaction compared to four years ago?
• Do I have enough money in the bank to meet my immediate needs and a few thousand dollars' cushion for an emergency? A surprisingly high number of Americans don't have access to $2,000 in the case of an urgent need; having just this amount can greatly increase your emotional security (and save a lot of stress and bank fees, as well).
• Do I have adequate health insurance? The lack of health insurance stability is almost equal to job instability in creating stress and financial insecurity. Even for those with employer-sponsored health care, lots of Americans have been losing health insurance - one in six between 2006 and 2008. Without health insurance, we're more susceptible to financial crises. One study indicated that over half of bankruptcies are tied to medical debt.
• Is my housing situation stable? With the huge number of foreclosures over the past four years finally dipping, more of us are not in the predicament of being potentially weeks away from losing our home. It is, to put it mildly, hard to feel financially secure if your largest asset (and/or debt, depending on the circumstance) could disappear. You needn't own a home to have housing stability, of course; if you're secure in a lease agreement you know you can afford, this can be financial security, too.
• Are my most important personal relationships stable? While it's not something we typically think of as a financial concern, most of our worst financial crises come at the hands of the people closest to us. Divorce is the biggest financial blow most people ever endure; and when siblings and older parents are in financial crisis, it often comes to us to help them out.

So, are you better off?

I'm curious: where have you come in the last four years? I'm skeptical that the President can have a lot of impact on our personal outcomes, though certainly I feel more secure in #3, health insurance, thanks to the moves taken by our current leaders. I doubt either major party's candidate would do much to affect my next four years on any of these measures.

Are you better or worse off? Either way, do you think the leadership in Washington D.C. had anything to do with it?

The original article can be found at FiveCentNickel.com:Are You Better Off Than You Were Four Years Ago?