Women, Marriage and Prosperity

Why Poor Women Have A Harder Time Rejecting Marriage

Over the past several years, many Americans have seen their dreams put on hold. Individuals within our society often struggle just to keep afloat, despite the many things that weigh them down. Unfortunately for women, marriage, or rather, the lack thereof, has become one such weight.

It would be nice if love was the only factor in the modern marriage game, but unfortunately it is not. For women especially, socioeconomic status plays a huge role in whether or not a marriage will occur and why. Let me explain.

Sarah and Mary

Let's consider two women on opposite ends of the income ladder, Mary and Sarah. Mary is a successful lawyer who lives comfortably in a spacious Manhattan condo. Sarah is a single mother of two who works at a fast food restaurant and at a Walmart. Despite their hectic lives, both women fall in love. As her relationship gets more serious, Mary begins to contemplate marriage. She considers whether or not binding herself to a man will restrict her independence, slow her career progression or contribute in some way to a male dominated world. As Sarah contemplates marriage, she thinks of raising her two children on two incomes rather than one. For Sarah, the prospect of marriage could mean not having to worry about going to bed hungry.

Both women are in love, but their relative needs are quite different. The wealthy Mary has the privilege of considering marriage in an abstract way, and wondering how it may affect her future lifestyle. Mary has a lot of power in deciding whether or not to get married. Struggling Sarah on the other hand, sees marriage as a question of love, but also one of opportunity. Sarah's decision on whether to marry has an immediate and tangible affect on her own lifestyle and on that of her children. Effectively, she has less power.

Now of course, Sarah and Mary are completely made up. But their stories parallel the reality of being a woman in America. Without using a value-judgment, the fact remains that married women tend to have brighter economic outcomes than unmarried women. And for women floating around the poverty line, this matters a lot.

Compare the top line to the bottom line: married working woman vs. unmarried working woman. Think back to struggling Sarah and imagine the improvement in her life and her children's lives if she moves from the red line to the green line. Mary, who is already floating above the green line, does not care.

Judgment Free Reality

My goal here is not to claim that poor women should get married or that men should rescue women from their sad lives. These numbers are in many ways representative of the persistent and unfair gaps in pay between men and women. But regardless of how fair or unfair these numbers are, they are reality. Sure we can and should work to make changes here, but for right now, marriage is an important predictor in lifestyle.

When I said judgment free I lied, I do have one judgment before I close. Our society always teaches young girls to want marriage and to hope for it. Girls dream about their wedding days and plan them out for years. But what about young boys? Our society never tells boys that love is important. We teach boys to follow their dreams and make big changes in the world with their careers. For boys, love is taught to be an afterthought. Perhaps this is the real problem. 

College's Broken Message

The Road to Opportunity?

Generations of Americans have been told that college is the road to a better life, that without a degree you will likely find yourself trapped in a dead end job and miserable. The children of America are taught to visualize the future through the increasingly narrow lens of a college education. But we have the message all wrong for two reasons.

1. College Isn't Always Financially Rewarding

This is important. To any disillusioned lower or middle class high school student, please take in this message. College is extremely expensive and the costs just continue to rise! For some the expense pays off, but for many it does not. 

The rise in the cost of education has far outpaced the growth of income over the past half century. Every year our students pay more and more to become educated at the collegiate level. Most students have to take out loans to pay tuition while in school. Let's take a look.

Here is the equally bleak picture. This shows that just in the ten years between 2001 and 2011, student loan debt grew by 500%. 500%!!! Right now, the average college graduate is $29,900 in debt. That's a high end car, a down payment on a house, maybe even a year's worth of income. That does not even account for the four years you spent NOT earning any money because you were in school. Not to mention the addition expense for those who continue on to earn advanced degrees.

What's worse is that many students graduate from college and begin in their career paths realizing that they are completely unprepared for life after graduation. College does not always teach the skills and concepts needed to succeed in the professional world. Classroom learning is always different from life after graduation and many people graduate mired in debt and may begin to regret all of those years in a classroom.

2. Money Isn't the Point of Education

Based on point #1 you may think that I am someone who thinks only about the financial impacts of college on life, but this isn't true. What I find even more important is arguably a bit more subtle. Society tells us that money is the point of education, but it isn't. Education is the point of education. 

Studying art, philosophy, music, literature, history, psychology, sociology, archaeology, latin and / or anything else is not supposed to make you rich. It is supposed to teach you something about the world and allow you to develop a passion for something and a greater understanding of the society in which you live. 

If you find something that you love to study, go and learn about it, become an expert. Frame your life around something that you are passionate about. Do something because you love it, not because you think it will reward you with a fat paycheck. You will be much happier following your dreams than doing something just for the money. 

Education and money are two completely separate things, so please treat them as such. 

Summary

Really my point is that we are teaching our children the wrong thing. We should be teaching our kids to love learning and not dollar signs. Life is really about doing what you love and finding happiness and not becoming rich. If you think that those two things are always one in the same you may be in for a wake up call the day that you graduate. 

America's Broken Dream

Chasing Money and Getting Lost

Once there was a dream. A dream of raising our children with more than we had, a dream of houses on cul-de-sacs, a dream of consumption: The American Dream. Anyone could be anyone; society preached of upward social mobility. For decades, we believed in this dream. We moved our families to the suburbs, worked long hours at work and expected that we could create our own idealized life. 

But did this make us any happier?

It appears not. 

We have now reached a time in this country where our traditional American dream is broken, and economic signs seem to indicate that there may not be a way of resurrecting it, at least not anytime soon. We could take this as a sign that our country is falling apart, but I think that it could provide a wonderful opportunity for us all. Rather than focusing on consuming more than our parents and living in a bigger house, why not focus on being happier versions of ourselves? Why not ask ourselves what really makes us happy? If we focus less on changing our socioeconomic group, maybe we could really all be a bit happier. Most of us have somewhere around 80 or so years to live, why not make the most of our time here?

I realize that this may seem counterintuitive. Doesn't an increasing standard of living make us feel more satisfied? Perhaps it could, but it often comes with sacrifices that we tend to overlook. I want to explore happiness in our society.

Seriously, there are several reasons that the American Dream is worth giving up. 

What Makes Us Unhappy

There are a variety of things that could contribute to happiness in a persons life. Surprisingly, money is less of a factor than many people think. Once we reach a certain middling level of income, money does little to increase our happiness. And sometimes chasing money can actually contribute to our unhappiness. At some point, the cons of more money often outweigh the pros. 

Commuting

One of the biggest factors influencing well being is commute time. People with longer commutes are more likely to be unhappy. The American Dream which has encouraged suburban home building has increased commutes for many americans over time. 

Commutes Over Time

Commuting and Happiness

Taken together, these graphs show exactly that. Over time commutes have increased for Americans despite the facts that commuting further tends to reduce satisfaction. 

Stress and Loneliness

When people are extremely stressed out, they are less likely to find time to nurture themselves. Whether due to full schedules or lack of energy, this also tends to lead to lack of social activity. People who spend less time socializing and more time stressing tend to be less happy.

This chart shows that as social time increases, so does feelings of happiness. People who work long hours in pursuit of larger and larger paychecks inevitably are left with less time to spend with others. The stress from extra work and the isolation from other people is certainly not a positive addition to one's life.

Now What?

So there you have it. Perhaps the American Dream is dead. Perhaps many Americans are dealing with stagnating wages and lifestyles and perhaps the homes that we raise our children in will be smaller than those we ourselves grew up in. 

But so what? Having more possessions cannot make us happier and I have pointed out a few ways that the dream that our society subscribed to actually may have reduced our collective well being. I urge you to reject the American Dream. Manage the money that you do have well, but do not let money become your biggest motivation in life.

Search instead for happiness and your world may become brighter even if your wallet becomes lighter.

Rent or Buy?

Buying is not Always Best

Homeownership has long been a strong component of the American dream, but over the past decade or so, homeownership rates have been declining for a variety of reasons. Many people lost their homes during the recession and others are too mobile to go through the hassle of buying a home in a single location. As Americans, we have the idea that owning a home is one of the key markers for success and that we will be better off if we choose to buy a home. This is not always the case. I will go into a discussion further, but if you don't believe me, check out this calculator by the New York Times.

There are a variety of reasons that you could be better off renting a home than buying. As you might see from this map, the decision is not always clear cut in favor of buying. Let's discuss some key factors.

Rent vs Buy Map

1. Location

In some locations in the country, you could pay more to rent a home than to buy the same home. There are a variety of market conditions that may influence this. In a situation like this, it is important to be aware that your budget, even if unchanged, will buy different things in the rental vs. owner markets. This is not a be all end all factor for everyone, but it is important to be aware of. 

2. Mobility

How long are you going to stay in one place? In general, the longer that you stay in one home the more financially attractive it becomes to buy. This is because when you are paying off a 30 year mortgage, you pay mostly interest in the beginning; equity does not begin to accumulate quickly until after year 10. That means that if you sell before 10 years, you will have accumulated little equity and the transaction costs of selling and buying may outweigh these equity gains. 

3. Lost Opportunity Costs

This one may be the most subtle but most important. When saving for a home, we usually try and accumulate a down payment as fast as possible by stashing cash in the bank. Once we buy the house, we tend to feel that we are "paying ourselves" and that gives us less of an incentive to save. In general, it is cheaper to rent than to buy. Imagine that you have the choice to buy a house for $1200 per month or rent for $1000 per month. If you rent, you can invest that extra $200 per month, which will likely appreciate faster than the value of the home. If you are consistent, you can make a lot of money this way over time. This idea however gets flipped in markets where it is cheaper to buy than rent!

Despite our apprehensions about renting, there are certainly times that it works out to be a better option than homeownership. Americans should stop putting themselves into mental boxes because when you think narrowly, you can avoid making the best decisions.