ON CONSUMERISM
By Arthur Vidro
Don’t spend money you don’t have.
That includes Christmas bonuses.
Not everyone is lucky enough to receive a Christmas bonus. There is no law — and as far as I’m aware, no union regulation — that requires any employer to dispense year-end bonuses.
Still, in certain companies and industries they have become a tradition.
The smart way to approach the notion of a bonus is to put it completely out of mind. Do not speculate how much it might be. Do not wonder when it might arrive. Do not mentally plan how you wish to spend it.
Just put it out of your mind.
Then if you receive one, it’s a pleasant surprise. And then you can decide what bills
to pay down, or what repairs to make, or maybe what item to purchase that you mightn’t
purchase without the bonus.
My first Christmas bonus was the owner waddling around like a big shot, handing
out a $20 bill to each employee. To be fair, $20 then was about six hours of work at
minimum wage.
As the companies I worked for became larger, so did the bonuses.
But I never relied on getting a bonus. To me, that would be folly.
Eventually, when I labored at a company in the world of stocks, the bonuses got
very big indeed. As in four-figure numbers. Higher-ups received five-figure bonus checks.
I never asked how the bonuses were calculated. Seniority? How well or poorly the
company did over the year? Some other formula?
Anyway, I was always happy to receive any bonus. I would typically use the big
ones to make multiple car payments (sometimes four at once), to winnow away at that
debt. For the faster you pay off a loan, the less in overall interest you end up paying. And in
my case, it allowed me to greatly reduce my car insurance costs, by reducing the insurance coverage. When one is still paying off a car, the lender usually requires you to have complete insurance coverage.
The remainder of the bonus I might put into a special account we had for saving up
to buy a house (we were renters then). Or else I bought U.S. savings bonds. That way, the
money would still be available years or decades later when we might truly need it. Yes, it
can be fun to splurge on a big buy, but there are smart big buys and there are foolish ones
that fall into the realm of squandering.
And I always knew that good times don’t last forever.
On the other hand, my supervisor at the stocks company treated his bonus — much,
much larger than mine — differently. He and his wife would have the bonus money spent
long before it was dispensed.
This can lead to trouble.
In 2007, give or take a year, when the stock market was in the process of crashing
and the company was laying off lots of folks, the bonuses arrived but they weren’t as high
as the year before.
I accepted my reduced bonus with dignity and grace.
My supervisor, a soft-spoken but powerful big bruiser, got upset. He never got
upset in public. But he protested when he and I were alone in our office. In his view, the
worst a bonus should do is repeat the prior year’s level. And every year it ought to be
higher than the year previous. The idea of a reduction bothered him greatly.
He picked up his telephone to call his wife. He was hoping they could stop some of
the holiday spending they were already doing — including their annual vacation cruise —
since some of the funds they were counting on weren’t going to be there. Despite my
supervisor’s pleadings, his wife absolutely refused to trim back on spending. The cruise
would proceed, even if the bonus couldn’t cover it.
I patted my wallet, knowing what was coming, because it had come so many times
before (usually once a month).
“Arthur,” said my supervisor calmly and politely after his phone call was over, “any
chance you can lend me a few hundred? Just until payday.”
This, mind you, while he was clutching a bonus check for $10,000 or more.
I obliged him.
After all, he always paid me back. And he was my supervisor.
I think some form of budgeting would have helped him out.
But in his case, and the case of many others, budgeting one’s money isn’t enough.
In the words of former NFL player Adewale Ogunleye and former NBA player Allan
Houston, who have tried to teach other athletes how to manage sudden wealth and overall
financial literacy:
“You don’t just budget your money, you budget your lifestyle.”
Amen to that.
