Thursday, May 14, 2009

A brief history part 3

My second job came with an interesting change: living with my father. Ironically, after having done so well I technically became a 'boomerang child'.

My parents divorced long before I was ever in elementary school, and while my father had been caring, with weekend visits a regular occurrence, I had never lived with him. Still, he happily offered me a bedroom when I got the offer and I thought it might be a great chance to get to know him beyond watching movies together.

It was also the first encounter where I really realized what completely different worlds my families were from. On my mother's side were a set of financially savvy savers. All were college educated engineers who had done fairly well financially. On my father's side I was the first to graduate from college. Most lived in the country, and actually had no conception of the sort of math and science I dealt with on a daily basis.

My father thought me moving in was the perfect opportunity to try going into business for himself. I don't think it was a conscious decision but I think that in his heart he expected me to support him. The business didn't work out and every month had him beg me for more money to pay the rent. I felt horrible for doing so, but eventually I had my paystubs and tax information sent to my desk at work rather than risk him seeing them and thinking I had the money to do so and I started underplaying how much I made. I also was exposed to a number of financial habits that I have seen in other people who have trouble:
  1. No sense of the future. Having money in the bank on the 29th meant you could spend it, nevermind that the mortgage is due the next day - it never even occured to him.
  2. Using his house as an ATM. I had heard him proudly declare he had paid off all of his credit cards, but later realized he had done this by refinancing. After living in his house for over 10 years, my father still has no equity.
  3. Being optimistic about everything - no retirement savings because he doesn't plan to retire, nevermind if something forces him to like an injury. Credit cards being under control because the minimums can be paid, despite the fact that paying them that way will take years and cost a huge amount of interest.
Outside of family I had a few interesting discoveries at work. The new company was very much 'bonus oriented' - in a good year a bonus might be more than a year's salary. Because of this, base salaries were lower than other companies but in the end usually came out financially ahead. What was interesting is that the company had very solid financial habits because of this. Because bonuses could not be depended on it was quite common for the employees to have a seperate 'bonus withholding' for the 401k of a fairly high percentage. Everyone learned to 'live on' the lower base salary and so at bonus time it was very easy to save or splurge and know it was safe. I loved the work, but sadly after a year and change the company was reorganizing and the role I was fulfilling was being removed (I was playing an emergency responder type of role, so it was a good reorganization to remove the need for that) - I was offered a generous severence and so I took it; hoping to finally get my own place and feel like I wasn't tempting my father into dependence on me - especially since it was a dependence I didn't intend to support.

To this day I worry about what I should do should my father run into financial problems. On the one hand, this is his own fault for not saving, for being unable to look to the next day nevermind the next year. On the other hand he is my father and I cannot abandon him. I have, for the moment, pushed these worries back but it is still a subject I have not yet decided how to handle. At the very least I know now that this is a worry, something I never would've known had I not spent that year with him.

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