On judging how poor people spend their money

DH has some extended family whose spending choices compared to their lack of income drives me nuts.  They’re always spending money on luxuries when they have the money (often on luxuries for other people) and then have no money when a small emergency strikes or their taxes were higher than expected or another debt comes due or what have you.  At Christmas we always feel like we have to send money to help out with the latest emergency, though we resist during the rest of the year when there isn’t a good excuse to give.

And it’s really easy for us to judge.  Back when we made little money, back when we had debt, we were frugal to the bone.  We got out of debt by spending money on no luxuries and sending every penny to the debt.  Then we built an emergency fund.  Then we started saving for retirement.  Only then did we loosen up and spend on things we didn’t need.  (Though to be honest, we started eating meat again after the debt was gone.)  I wanted us to be secure before we bought anything we’d wish we hadn’t in an emergency.

But honestly, these days, who are we to judge?  We spend a ton of money on luxuries, just different ones.  We have different priorities.

I think nothing of spending $200 on our annual umbrella insurance, who am I to judge a $200 game console purchase?  How can we judge a $1K granite-topped bar (relatives bought after a windfall) when DH has a $1K ergonomic chair (that he saved his allowance to get)?

The thing is, with us, our money is ours to keep and shelter.  We have no family to impress with conspicuous consumption.  They know we’re doing just fine and they live far away.  We have no childhood of deprivation to try to make up for (though neither of us had much stuff because our parents were often low income, we always had security, we never felt deprived).  We don’t have relatives telling us that we need to give any savings to even more impoverished family.  We’re not caught in the trap of having to spend the money now or give it away.

Possibly most importantly, even when we were living on low incomes with high basic expenses, we knew that situation was only temporary.  We could always and can always tell ourselves that we will have things in the future, when we are out of school and have real jobs, and it’s true and we’ll believe it.  It’s harder to think that way and stay deprived when you haven’t graduated high school and keep failing the GED.  Or when you’re a grandfather in your 30s.  If you don’t buy that  luxury now, you may never get it.  You may never have happiness or an item to show off.

Why can’t people just set up automated savings accounts that put the money away so relatives don’t know about it and people don’t feel the need to spend it?  Because when you’re low income, savings accounts can be dangerous.  Even the most basic bank accounts are expensive when you hit an overdraft fee that you can’t cover or bounce a check or make a mathematical error.  And sometimes you need to draw on that money and everything is empty and instead of just having no money, you have fees and more debt.

And yes, we think we would be perfect and save our way out of poverty, but it’s hard to say what we would really do in those kinds of situations.  We don’t have the pressure.  It’s easy for us to say we’d never be in that situation or we’d get ourselves out as soon as possible, but what would we really do?  People behave remarkably similarly when they’re deprived in experimental settings.  I’m not sure that my willpower is enough to dig out of that big a hole, especially if I didn’t have hope to go with it.

Is yours?