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IN THE EARLY 1980s, I was a bachelor in Brooklyn. Unskilled at cooking, I didn’t eat at home unless my food came out of a cereal box or snack bag. For regular meals, I depended on a small neighborhood diner.
It was open for breakfast, lunch and dinner seven days a week. On weekends, it was my main source of food. Like so many diners I’ve visited since, it offered complete meals—soup, main course and dessert—for one price. When I ate at the diner, I’d always have the soup and main course, but skip the dessert.
This was in the days when I was running marathons, so I needed enough food to keep up my energy, but not too much. By skipping dessert, I was able to maintain a healthy weight, something I’ve struggled with all my life.
On one occasion, when I declined the dessert, the guy sitting next to me reminded me, “It’s included in the meal.” I said, “I know, but I don’t want it.” The look of disbelief on his face was classic, as if there was something wrong with me.
Since my running days, I haven’t had the same discipline toward food. My expanding appetite could be a metaphor for a larger financial problem—our tendency to go to excess.
I was reminded of this when I watched the Age of Easy Money, a PBS documentary. It tracked the American economy from the housing crisis of 2008 through the pandemic of 2020. Through most of those 12 years, the Federal Reserve encouraged spending by holding interest rates near zero. Many people borrowed heavily to buy cars, houses, college educations and vacations. The zero-rate period began for a good reason—the government wanted to shock the economy out of the 2008 financial crisis. It revisited the medicine of rock-bottom rates during the 2020 pandemic.
It was a sugar high—lots of cheap money was suddenly available. In 2022, when rock-bottom interest rates ended, some banks got caught in the resulting squeeze. They’d loaned out billions at tiny rates. Now, they were losing big on those loan portfolios. A few notables—Silicon Valley Bank, First Republic and Signature Bank—required government takeovers after panicked depositors fled in an old-fashioned bank run.
As Warren Buffett famously wrote in a letter to his shareholders, “You only find out who is swimming naked when the tide goes out.” It isn’t just the banks that got in over their heads. Many people took advantage of low rates to borrow more than was prudent.
Where was I during all this? I was doing what I always do. I was buying only what I could afford. Putting money aside to pay the bills. Not taking out loans or running up credit card debt. This had nothing to do with my financial situation during this time. It’s just what I do.
It’s a lesson I learned from the cradle. My grandfather was not a saver. He lived the “good life.” When the Great Depression hit and his work dried up, he was forced to sell the house, which was mortgaged, and move to the country home that had no running water or heat. It did have one virtue, however: It was paid for.
My mother lived out the Depression in that humble house. She had a roof over her head because they had a paid-up house and could make do. Today, my house is paid off, too. So long as I can afford the property taxes, we’ll have a place to live. That gives me peace of mind.
Taking on debt creates financial risk. It’s a key reason the Great Depression was as bad as it was. Everyone was making money in the stock market, so they thought borrowing from their broker would only accelerate wealth creation. And it did—until share prices crashed and their margin loans came due. Then the house of cards collapsed.
You take on risk whether it’s good debt—for an appreciating asset like a house—or it’s bad debt, such as credit card balances. Unless the debt is paid back on time, you lose control of your financial life and wind up in a hole. I’m grateful that I’ve never had the fear of missing out (FOMO) mentality or the “keeping up with the Joneses” spending reflex.
More isn’t necessarily better. It’s just more. You may feel entitled to it. But do you really need it? And at what cost?
David Gartland was born and raised on Long Island, New York, and has lived in central New Jersey since 1987. He earned a bachelor’s degree in math from the State University of New York at Cortland and holds various professional insurance designations. Dave’s property and casualty insurance career with different companies lasted 42 years. He’s been married 36 years, and has a son with special needs. Dave has identified three areas of interest that he focuses on to enjoy retirement: exploring, learning and accomplishing. Pursuing any one of these leads to contentment. Check out Dave’s earlier articles.
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Nice article. Thank you for sharing.
Dave, what a writte beautiful column. So well expressed about money management.
I not only don’t try to keep up with the Jones, I have no idea what the Jones are doing.
I’ve paid interest on credit cards twice in my life, both back in the 1970s. The first time, I had just graduated from college, moved to another state, and hadn’t received my first paycheck yet. The second time, I wrote the check for the wrong amount — by 4 cents. It cost me the minimum charge of 75 cents, as I recall.
I’ve owned 6 homes in 4 states. One of them never had a mortgage, I got 15-or 20-year mortgages on the rest with no less than 25% down. I’ve paid cash for most of the cars that I’ve owned.
This precisely why I hope the FED does NOT cut interest rates regardless of the inflation rate.
”Easy Money” encourages people to not care about the cost of things.
Which is, IMHO, bad not only for the purchasers but the whole country in general.
Loved your article.
we came as immigrants in the 60’s and my parents worked hard so we could buy a house which they did for $8500 in Baltimore in 1971, only 3 years after we arrived with no mortgage. I learned from them and they taught me well.
Enjoyed your article! My parents grew up during the depression and WWII.
“Use it up, wear it out, make it do, or do without”, right?
As kids, we learned to make our own fun playing softball, swimming, riding bikes, building forts in the woods, and floating handcrafted boats down the street in the rain. Good times, except for those hand-me-downs.
Nice article, David. Young people getting started invariably need to borrow. But, eventually after they get off to a good start, its wise to aim to become debt free over time. In regards to fear of missing out, and keeping up with the Joneses, its hard to improve on what Socrates reputedly said: “Happiness… comes from internal success, not external rewards.” And, “He who is not contented with what he has would not be contented with what he would like to have”. I think being content with what I already have is a learnable skill.
Less frequent higher quality purchases vs having tons of cheap crap cluttering up the house. I think people who do the latter tend to sabotage their finances, often using the worst kind of debt.