Should We Be Talking About Money More?

Let’s face it, money is on most people’s minds. If you’re in your 20’s and 30’s, there’s a good chance you’re straddled with student loan debt or credit card debt while also trying to save for a home or pay outrageous child care costs. If you have school-aged kids, you’re probably stressed about college tuition, and if you’re in your 50’s and 60’s, you might be worried about whether you’ve saved enough for retirement.

Whether we like it or not, we’re living at a time in which aquiring income is easy, but aquiring wealth is not. Yet despite its necessity in our lives, people usually refrain from talking about money. However, is this a bad thing? Could talking about money ever benefit us?

About five years ago, a friend casually mentioned to me that his 401(k) was already six figures, and because of that, he wasn’t worried about retirement. I was shocked. This was someone my age, who graduated from college at the same time I did, and yet my own 401(k) was practically nonexistant. Hearing this, it wasn’t so much a feeling of being behind as the feeling that this person was setting himself up for freedom, and I was setting myself up for well, nothing. A lifetime of working. It really made me think, and I’m glad it did.

Although the conversation was fleeting – lasting only about 10 minutes – it completely transformed my outlook on saving. I applied for a higher-paying job and immediately began maxing out my retirement contributions. Now, five years later, I’m on track to retire at 63 and hope to shave a few more years off my working life.

Yet none of this might have happened if I hadn’t had that brief, eye-opening conversation five years ago. Have you ever had a moment like this?

Has a conversation about money positively impacted your life?

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Getting Serious About Side Jobs

Think about this for a minute. In 2016, 42.4 million Americans owed $1.3 trillion in federal student loans. As a result, the U.S. homeownership rate fell to its lowest level in more than 50 years.

Whether we like it or not, debt is a big part of our lives, and it comes at an extraodinary cost to students and their families. So much so that many young adults can’t get by with just one job anymore. Side jobs are quickly becoming the norm and the only way that people can shake themselves from the shackles of debt.

But what are all these side jobs? And how much do they pay? There’s no shortage of advice online for millennials. “Start a blog, fill out online surveys, sell your calligraphy skills, sell your photographs…” the list goes on. Many are a waste of time, but some are actually helping people pay off their student loans, save for a home or raise a family.

Would you consider doing any of these?

1. Become a plasma donor: According to DonatingPlasma.org – an educational website from the Plasma Protein Therapeutics Association – plasma donations help treat people with rare, chronic diseases so that they can live healthier and more fulfilling lives. Since the U.S. Food and Drug Administration allows up to two plasma donations within a seven-day period, you can make as much as $400 a month by donating plasma. The process is similar to giving blood except that once your blood is drawn, the plasma is separated from your blood and then the red blood cells are returned to your body. Average visits take about 90 minutes, and there are more than 450 donation centers in the U.S. and Europe. You do have to be in good health and at least 110 pounds in order to donate.

2. Participate in clinical trials: Another way to make money on the side and help other people is by participating in medical research studies, also known as clinical trials. Clinical trials help researchers find better ways to treat, prevent, and understand human disease. Although payment varies from study to study, clinical trials typically pay generously. For example, clinical trials offered by the company Covance pay from hundreds of dollars to several thousand. Other paid clinical trials can be found at ClinicalTrials.gov, CenterWatch.com, on Craigslist job boards, or on the websites of local research centers, such as Johns Hopkins or Biofortis Clinical Research. Before agreeing to participate in any studies, make sure you know all of the risk factors involved, including potential side effects.

3. Participate in focus group sessions: Just as medical researchers trial new treatments, marketers pay people for their opinions on the products and services they use (or don’t use) every day. This helps them improve those products and services, thereby improving their business. And marketers pay well for people’s opinions. Focus Pointe Global – a marketing research company with 18 research facilities across the U.S. – pays between $45 and $250 per study. Savitz Research Solutions, located in 16 major cities, pays between $50 and $300. Other marketing research companies that pay cash include Fieldwork, Probe Research Incorporated, and MindSwarms. Since competition for studies can be fierce, it’s a good idea to sign up with several marketing research companies in order to increase your chances of participating and getting paid.

4. Become a pet sitter: For dog and cat lovers, pet-sitting is a natural and enjoyably way to earn cash on the side, especially if you can care for more than one pet at a time. In The Simple Dollar, personal finance blogger Holly Johnson writes that part-time pet sitters at Rover.com (defined as those who watch two or three dogs for two weeks out of the month) earn an average of $1,000 per month. Best of all, the service lets pet sitters determine their own rates and keep 80% of their earnings. Similar services include DogVacay, Fetch! Pet Care, and Dogs Go Walking.

5. Become a rideshare driver: If you have a car, consider driving for a ridesharing company, such as Uber or Lyft, to make extra cash. Although your earnings will depend on where and how often you drive, Uber states on its website that on average, drivers in Los Angeles and Chicago make more than $600 per week and drivers in San Francisco and Boston make more than $700 per week. And you don’t necessarily have to drive full-time to earn a lot of cash. On its website, Lyft states that some of its drivers make more than $800 just driving on Friday nights and weekends. In addition, U.S. News and World Report cited an analysis from Princeton University which found that Uber drivers who drove between one to 15 hours per week averaged more than $16.00 per hour. Many ridesharing companies also offer new driver bonuses upon sign-up.

6. Become a multi-tasker (literally): Yet another way to capitalize on the “sharing economy” or “gig economy” is by becoming a tasker for companies such as TaskRabbit, Gigwalk, or Handy. In a recent interview with Fast Company—which named TaskRabbit one of the most innovative companies of 2017—CEO Stacy Brown-Philpot said that TaskRabbit workers earn an average of $35 per hour, or nearly five times the federal minimum wage. Taskers choose their own tasks, and there are more than 40 categories listed on TaskRabbit’s website, including shopping, yard work, and arts and crafts.

What do you think? Have side jobs helped you get out of debt, or save for a home? Are there any side jobs that you would add to this list?

Personal Finance Shouldn’t Be Scary

Last month, I received one of the best compliments (to date) on my blog: “I love your blog. It makes money less scary, and I appreciate that.”

While this person’s comment made me feel all warm and tingly, the reality of her compliment also struck me. For the majority of us, personal finance is scary!

And it isn’t our fault. It’s 2017, and college curriculum STILL doesn’t include classes on investing, saving for retirement, taxes… the list goes on. It’s no wonder that one in three Americans has nothing saved yet for retirement, or that nearly 75% of millennials has less than $10,000 saved, according to a survey from GOBankingRates.com. It’s a big, national problem, yet it wouldn’t exist at all if colleges and/or the government would make a few simple changes (see more on how the government could help here).

Unsurprisingly, once you get to know personal finance, an interesting thing starts to happen: It becomes a lot less scary! And even liberating.

So how can we familiarize ourselves with personal finance so that it’s not as daunting? Fortunately – thanks to the internet and technology – there are a lot of free online tools and resources that can help us out.

Below are some of my personal favorites:

  1. Retirement calculators: If you’re wondering how much to save for retirement, this is a fantastic calculator. All you have to do is plug in your age, desired retirement age, the amount you’ve saved so far, your current income, and the percentage rate at which you’re saving. In just a few clicks, it does the math for you and tells you whether you’re “falling short” or “on the right track.” Keep in mind though that most online retirement calculators assume annual stock market returns of 6% or higher. In reality, the stock market may only return an average of 4% for the next 20+ years (more on that here).

2. Mortgage calculators: If you’re thinking about buying a home or investment property, online mortgage calculators can help you estimate how much you can afford. However, as the CFPB reports, many online mortgage calculators only calculate your principal and interest payment – leaving out important costs like property taxes, homeowner’s insurance, property mortgage insurance (if you’re putting less than 20% down), and condo/HOA fees (if applicable). As many of you know – particularly if you live in Illinois or another state saddled with debt – property taxes can sometimes amount to a double mortgage. For this reason, I really like the Trulia Mortgage App as it includes most of these other factors. Click “Advanced options” at the bottom of the app to play around with the property taxes and PMI.

3. Google Alerts: I can’t even tell you how much I’ve learned simply by setting up daily Google Alerts. I set one up for “down payment” about a year ago, and ever since, I’ve been able to easily monitor the latest news, trends, and developments about home down payments. If I hadn’t, I would never have known about companies offering to help people with their down payments in exchange for a stake in their property, or the idea to create tax-free savings accounts for down payments (like 529 plans for college). Although neither of these initiatives has impacted me, it’s great to know about these developments and keep an eye on them. If there’s something you want to learn more about – such as a company you’re investing in – I highly recommend setting up a Google Alert (or three).

4. Twitter lists: Since time is money, in addition to Google Alerts, Twitter lists are a great way to quickly and easily monitor personal finance news and tips (although it does require you to have a Twitter account). Twitter lists allow you to declutter Twitter’s massive newsfeed so that you only see Tweets from the people in your list. I have personal finance and homebuying lists consisting of organizations like Fidelity Investments (@Fidelity), LearnVest (@LearnVest), and Zillow (@Zillow).

5. Investing apps: For those who want to learn how to invest beyond their 401(k) and Roth IRA, apps like Clink allow you to invest with as little as a dollar a day. In addition, they only charge you a dollar per month to manage your account (until you hit $5,000, after which they’ll charge you 0.25% of your annual balance). This is a great way to learn the ropes without suffering any serious financial consequences. (Full disclosure though: I haven’t tried this app yet, so if you give it a shot, let me know what you think!).

What other tools and resources do you find helpful? Is there anything else that you would add to this list?

P.S. All of the recommendations above are my own. I don’t get paid to recommend any products or services, and I’ve made zero dollars from this blog 🙂

P.P.S. Cheap Wine and Coffee now has a Facebook, Twitter, Instagram, and Pinterest page. For anyone wanting more conversation than the blog allows, I post on Facebook and Twitter daily and hope you’ll join me! 🙂

It’s Time to Change the Way We Think About Retirement

Last week, the Washington Post published something so depressing that I couldn’t WAIT to get my hands on some wine: Millennials may need to double how much they save for retirement.

The story comes on the heels of an article in MONEY saying much the same thing in December: “Millennials will need to save 25% of pay for 40 years to get the same result that was available to boomers saving half that much.”

Although I’ve known these numbers for a while now, seeing them finally reported in the media drives home the fact that my generation – excuse my French – is fucked.

Why? Because according to asset managers, investment groups and Wall Street analysts, the stock market isn’t expected to return much more than 4% in 2017 – and potentially for the next 20 years.

Meanwhile, the price of everything around us (i.e. housing, child care, healthcare, college tuition) skyrockets.

It’s enough to drive a personal finance gal like me crazy! In fact, if you have any good news, please send it my way asap, as I probably need it 😉

But in all seriousness, what is our generation to do? MONEY reports that most young workers are only saving 6% of their salaries for retirement. Jacking that up to 20 or 25% – even with the employer match – would be difficult (if not impossible) for many millennials. Far too many must choose between paying off student loans, saving for retirement, saving for a home, or paying for child care. On top of it, I know several people working for companies that don’t even offer 401k matching. How are they supposed to save a quarter of their salaries?

Compared to millennials, our parents’ generation had it quite good. In addition to the stock market (of which they enjoyed 6-8% returns), they could also rely on pensions, social security, and significant jumps in home equities to retire. Us? We can only count on the market, and barely.

In order for us to retire comfortably, we need to sink serious cash into our 401ks or find more creative ways to save, like starting a business, making smart investments, or investing in rental properties (hint: think college towns). In other words, we need to rely on our intellect and luck, and the odds are stacked against us.

Sorry y’all. I’m not telling you this so you can be depressed like me (although blogging does help me cope). I’m telling you so that no matter how much or how little you make, now more than ever, you’re paying yourself first. It’s the foundation of any good/sound financial plan, and I can’t emphasize enough how important it is.

A More Optimistic Future

Earlier in this article, I said that our generation is fucked. However, I don’t reeeeally believe that. (Unless you’re 30 and have literally nothing saved yet for retirement. Then you should be worried). While we certainly have our work cut out for us, most of us are still young enough to improve our 401k contributions or figure something else out.

In addition, I have a lot of faith in our country’s ability to improve and innovate. Although the creators of the 401k model have expressed regrets about the way it turned out, their hearts were in the right place. They assumed people would begin contributing in their early 20’s and see 7% annual returns. They never intended for 401ks to replace company pensions. Or charge fees that can eat away at people’s savings.

To help solve these problems, one idea being tossed around – which I fully support – is automatic 401k enrollment. This would mean that a certain percentage of your salary is automatically set aside for your retirement, starting in your 20’s. Backers recommend automatic employee contributions of 6%; however I believe it should be more like 10.

Another idea (and I’m not sure if this is being tossed around yet) is for the government to mandate that companies make a minimum employer match. That way, it would be illegal for companies to match anything less than, say, 6%, although they could certainly offer higher matching to attract talent and stay competitive.

Meanwhile, state governments are exploring solutions too. According to the Wall Street Journal, eight states (including Illinois) have plans to set up retirement savings plans for those who don’t already have them. The plans will “offer guaranteed returns” as well as “provide incentives for small businesses to create accounts for people who don’t have them.”

But for now, until real change and progress is made, the best thing any of us can do is to pay ourselves first. As the old saying goes, “it takes money to make money,” and you can’t make any money (i.e. maximize the power of compound interest) if you’re not saving.

So go ahead, increase your retirement contribution. Your future self will thank you.

–P.S. Cheap Wine and Coffee now has a Facebook, Twitter, Instagram, and Pinterest page. For anyone wanting more conversation than the blog allows, I post on Facebook and Twitter daily and hope you’ll join me! 🙂

Re-Learning Personal Finance

Every now and then I come across something really inspiring. The other day, it was an article titled “My Millennial Manifesto,” which published on the Huffington Post.

In the article, Matt – the founder of Distilled Dollar and a licensed CPA – talks about how, after World War II, people started working for major corporations and worrying a lot less about their finances. After all, why worry about your finances when you can get a steady paycheck and pension from the company you work for?

But after a while, Matt writes, something very bad happened: “we lost sight of who we were.” Older generations stopped passing down valuable information to their kids about how to start a business, how to manage their money, and how to best plan for their financial future.

He writes:

“It wasn’t [that] long ago [that] people used to build their own businesses. Not because they were driven by a sense to be self-employed, but because it was necessary not only to survive, but to thrive. Every day patrons used to know about personal finance because everyone had to be entrepreneurial. They could not rely on corporations to make decisions for them. There were no large government safety nets.”

However over time, that started changing, and people forgot how to manage their finances. They focused instead on accumulating material possessions and wealth, and they lost their sense of purpose.

The result is an entire generation of people (myself included!) that knows very little about how to start a business, how to invest, or how to best prepare for their financial future.

But thankfully, all is not lost. After many (many) years, this is finally starting to change, and it’s changing with us.

Contrary to being “entitled” and “whiney,” Matt points out that millennials are empowering a new generation by “re-learning what prior generations [already] knew.”

And he’s right! Everywhere around me, I see it.

Motivated by credit card debt, student loans, and a lack of savings (including emergency and retirement), millennials are driving change by starting conversations about money/transparency, challenging their purpose, and questioning society’s endless need for consumption.

We have realized that companies don’t have our backs the way they used to. Pensions are small or nonexistent. 401k company matches either prevent employees from being eligible immediately, or they have long vesting schedules. And wages have become stagnant.

We have also realized that there’s more to life than the 9-5 desk job. That we’re wasting precious time and energy working for corporations and earning salaries that can’t guarantee our retirement, let alone give us work that we love or time away with our families.

But most importantly, we have realized that we can take back control. That we can re-learn personal finance and embrace a renewed sense of purpose in order to build the life we really want to have.

I see this through:

  • The Minimalist Movement, which inspires people to live a more meaningful life by ridding themselves of life’s “excess” in order to focus on what’s really important – like happiness, fulfillment and freedom. (I highly recommend their podcast or documentary if you’re interested).
  • The Tiny House Movement, which gives people an opportunity to escape the vicious cycle of debt by saying no to six-figure mortgages and embracing a life of more time and freedom.
  • The “Start Your Own Business” movement: Okay, I made up the name. But it exists. Fortune published an article earlier this year saying that millennials have launched twice as many businesses as baby boomers, and they’re launching them at a younger age (20-30 vs 30-40). Although technology has certainly played a role, experts have pointed that with the average college-loan debt hovering around $26,000, many millennials have had no choice but to strike out on their own.

Taking Back Control

Many journalists and financial execs have claimed that there is no hope for our generation. That we’re doomed to become the most taxed, the most indebted, the most overworked, underpaid….never able to retire… blah, blah, blah. However, I disagree.

With all of this chirping in our ears, I think more millennials than ever are saying “Hey, wait a minute! I want to build my life and my career on MY terms. So what do I need to do to get there?” For many of us, the answer isn’t in longer hours and more pay. It’s in taking charge of our money earlier so that we can control it instead of letting it control us.

By embracing personal finance and learning everything we can about it now, we can regain control of our lives, keep ourselves out of debt, spend less than we make, and live a more meaningful life.

The choice is yours.

–P.S. Cheap Wine and Coffee now has a Facebook, Twitter, Instagram, and Pinterest page. For anyone wanting more conversation than the blog allows, I post on Facebook and Twitter daily and hope you’ll join me! 🙂

What It REALLY Takes to Save Up for a Home

NOTE: This article assumes you’re saving up for a 10-20% down payment, which you should absolutely do if you want a lower monthly mortgage and more financial freedom.

I’ve got a bone to pick with lenders, mortgage brokers and other people that preach, “If millennials could just give up their $5 coffees, pack their lunches every day, and drop cable, then they’d have a down payment – it’s that easy!”

WOW. Maybe if it was 1975.

Reporter Alan Heavens from the Philadelphia Inquirer humorously points out the irony in this advice, noting that in LA, you would have to stop drinking 15.2 grande caramel macchiatos daily (for five years) to save up for the average down payment on a median-priced LA home. The same scenario would require 23.5 cups in San Francisco, 8.8 in New York and 4.3 in Chicago.

Obviously no one is buying that much coffee daily, and frankly, I don’t know anyone who buys even one coffee daily.

And while it’s true that giving up expensive daily coffees and packing your lunches are important, those things alone won’t cut it. (Unless you have the ability and patience to save for 10+ years. Or family money).

For the rest of us, hard times call for tough measures. It’s no secret that rents and home prices are rising faster than wages. On top of that, many millennials have massive student loans.

For those of us who want to save more and save faster, here’s what it really takes to save:

1. Get a higher-paying job: This advice won’t be popular (I cringe even as I write it), but unfortunately, it’s today’s reality. Even if you love your job, if your plan is to buy a good home in a good neighborhood with good schools, you can’t afford to live paycheck to paycheck. I loved my first job out of college (and most importantly everyone I worked with), but I wasn’t making any money and I couldn’t save. Looking back, I’m glad I left and even wish I had done it sooner. There’s a reason millennials are known for job-hopping and it’s because it’s the best way to grow your salary. Also, bonus points if you can find a job that offers bonuses (no pun intended). Many experts believe bonuses are the new raises, and nothing helps you save faster than a big chunk of change once a year

2. Get a side job: Journalist Bob Sullivan calls it 21st century moonlighting, while others call it the “gig economy,” “sharing economy” or – my personal favorite – “hustlin’.” With home and rent prices rising faster than wages, and student loans that never seem to shrink, it helps to get ahead by bringing in extra income. Think Uber, Lyft, Airbnb and TaskRabbit.

3. If you’re getting married, save your wedding gifts: (Yes – all of it). It might not sound fun at first, but what better purpose for these funds than your future, dream home? Of course, this assumes that you don’t have to use this money to pay off your wedding. A lot of people do. But if you have the ability, save it. It’s a great way to make home buying more attainable.

4. If there are two of you, live off one salary: Again, this assumes that one person makes enough to support two, which can be challenging in a big city like Chicago. Maurie Backman from CNN says that since Americans are bad savers, “your best bet is to create a budget based on one salary only” so that “you get the flexibility of saving the other salary” and investing it. Great if you have the means; most millennials don’t.

5. Move back in with your parents: Sadly, I’m not kidding. A new analysis from the Pew Research Center shows that for the first time in 130 years, living with parents has become the most common living arrangement for Americans age 18 to 34. And who can blame them? It makes perfect sense at a time when starter homes are practically extinct, and 20% down payments are costing people $60,000 or more. And that’s before closing costs, homeowners insurance, an emergency fund and furniture/appliances.

6. Relocate: For those of us in big cities like New York, San Francisco, and Chicago, buying a single-family home seems impossible. But if you can justify leaving your family and friends – ouch – Bob Sullivan notes that there are still places in the U.S. with affordable homes. In this list, he cites 25 places where young adults can find homes for under $200,000. Personally, I have my eye on some homes in Columbia, South Carolina. But since I have an adorable new nephew here in Chicago, it’s mainly just wishful thinking.

Moral of the Story?

Don’t stress out about buying or not buying, and don’t let other people’s judgements get in the way of doing what’s right for you. It takes enormous (almost insurmountable) self-discipline to save up for a home today, and if you’re not willing to switch jobs or move back in with your parents (totally understandable feelings btw), it requires a lot of time, patience and sacrifice.

As one reporter put it in “Millennials aren’t buying homes. Good for them:”

“We as a society tend to overvalue homeownership, at least from a financial perspective. Were it not for the psychic and sentimental benefits of homeownership, it’s otherwise hard to imagine financial advisers counseling their clients to dump all their savings into a single, giant, highly illiquid asset.”

I completely agree. Although my husband and I have done #1 – 3, the thought of taking on a mortgage and settling somewhere this early on in our careers freaks us both out. And it should – buying a home is a huge undertaking.

So until you’re ready, relish being mortgage-free. Enjoy having the freedom to move if you want to move. Go at your own pace, and don’t ever let anybody – a broker, real estate agent, relative or friend – convince you otherwise. Sometimes, it pays just to wait.

 

–P.S. Cheap Wine and Coffee now has a Facebook, Twitter and Pinterest page. For anyone wanting more conversation than the blog allows, I post on Facebook and Twitter daily and hope you’ll join me! 🙂

What’s Missing from News Coverage on Pension Shortfall? Magnitude.

I’m not going to sugarcoat it for you, folks. Chicago Public Schools is $10 billion in debt. The city of Chicago is $20 billion in debt. And Illinois is a whopping $111 billion in debt – all because of severely underfunded pensions caused by the unchecked corruption of government unions and politicians. In fact, the situation is so severe that Chicago’s credit rating is one notch above junk status, and Illinois has been operating without a budget for 10 straight months.

That it even got to this point is outrageous and unacceptable. Because of it, our property taxes are going up, our state income tax is likely going up, and our schools are on the verge of bankruptcy. And how does the Chicago Teachers’ Union respond to all of this? By proposing more taxes! On things like gasoline, Uber rides, hotel stays, and more.

The situation is devastating for Chicago taxpayers, who according to the Illinois Policy Institute, are on the hook for $63.2 billion, or about $23,000 per resident. And if you’re thinking about moving, consider the fact that that multiple states have underfunded pensions – to the tune of $4 trillion. Because of this, some say our generation is on track to become the most taxed generation in U.S. history.

But for this post… let’s just focus on the problem here in Illinois.

Big, Broke and Bankrupt

Winston Churchill once said that “for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” It’s impossible.

Yet Illinois is trying to do just that. In April, the Chicago Tribune reported that Illinois’ property taxes are now the highest in the nation, followed by New York, New Hampshire and New Jersey. Adding insult to injury, Forbes reported that if Illinois raises its income tax – and there’s talk that it will – Illinois will “fall from 23rd to 48th on the Tax Foundation’s State Business Tax Climate Index.” FYI, the last time Illinois raised its income tax – in 2011 – the Illinois Policy Institute noted that 90 percent of the revenue went to pay for people’s pensions. 90 Percent!

This isn’t money that’s being used to make life better for non-unionized taxpayers. It isn’t improving our schools or curbing city violence. It isn’t even attracting new businesses or creating jobs. All it’s doing is decreasing Illinois’ value to residents. We already have shitty weather, shitty public schools and inexcusable levels of violence. Now we have the highest property taxes in the nation and maybe even the highest income tax too. Why should we stay?

Lesser of Two Evils

But perhaps what’s more unsettling about the position Illinois has put us in is that it is forcing us to decide which is the lesser of two evils: either we all take a hit, or public employees take a hit.

This is because outside of raising our taxes, there are really only two other viable solutions to this madness: declare bankruptcy or amend the Illinois constitution to allow for pension reform. This forces me and just about everyone I know to “root” for these options instead of raising our taxes – despite the fact that both negatively impact innocent people: the public employees, especially those who are already retired, who probably never in a million years thought that their retirement savings would end up so compromised and well… cheated. This includes firefighters, teachers and even those who picked up city trash or plowed snow.

If either of these things were to happen, public retirees will see their retirement savings reduced, and they may even owe the government. When Detroit filed for bankruptcy in 2013, Bloomberg reporter Chris Christoff wrote that not only were people’s pension checks reduced, they also had to pay back thousands of dollars of excess interest they received. In an article published last February, Christoff wrote about the betrayal felt by people like “David Espie, 58, who will repay the city $75,000 in a lump sum while his $3,226 monthly pension is cut by $216.” Can you imagine being retired and suddenly being told that you owe thousands of dollars because your state politicians didn’t properly budget for your retirement?

And is this somehow better than being told that you yourself owe thousands of dollars in property taxes because your state can’t fund other people’s retirement?

Illinois has put us in a terrible position, and although I’m not an expert, it’s pretty obvious that this isn’t how you operate a city, public school system, or state.

A Shot in the Dark

What’s so scary about the “fiscal basket case” that is Chicago – to borrow the phrase from the Wall Street Journal – is that no one really knows what will happen in Chicago. It took me long enough just to piece together everything above because frankly, local media would rather talk about Republicans fighting with Democrats than any alternative solutions to the problem – even if it is the (very real) possibility of Chicago filing for bankruptcy.

In a letter to the Chicago Sun-Times titled “I hope there is still hope for Chicago,” Lakeview resident Leon Hoffman laments the city’s potential demise, but accepts that “To all things there is a season; all business relationships come to an end; the only thing permanent is change, and suffering is optional.”

They don’t call it old-age wisdom for nothing. Suffering is optional. We don’t have to stay. If things get worse before they get better, people will leave. In fact, many of them already have.