A couple days ago, my boss directed my attention to this intriguing factoid about Sotomayor:
Sotomayor, an avid Yankees fan, lives modestly, reporting virtually no assets despite her $179,500 yearly salary.(Now, you may be thinking, shouldn't Miss Self-Important be finding these things for her boss instead of the other way around? Yes, but don't worry, incompetence is leaving the job in a couple months.) Greg Mankiw pointed out that having $30K in savings after several decades of earning a nearly $200K salary is not necessarily a sign of "living modestly." (He does point out that she could be stashing vast moneys in her retirement account, but she claims in the WaPo not to have any money, so it's unclear.) Next to that, there was Edmund Andrews's white-collar horror story of rich economics reporters who are apparently both spenders and suckers of a sort, and the ensuing accusations of even more spending and bankruptcy as "strategic debt management." Sotomayor seems not to be in debt, so even if she's not saving, she's at least not, like Andrews, living smugly beyond her means and passing the costs of her spendiness on to everyone else. (As in, "I was actually beginning to feel sorry for Chase. It seemed to be so flooded with defaulting borrowers that it didn’t have time to foreclose on my house.")
On her financial disclosure report for 2007, she said her only financial holdings were a Citibank checking and savings account, worth $50,000 to $115,000 combined.
During the previous four years, the money in the accounts at some points was listed as low as $30,000.
When asked recently how she managed to file such streamlined reports, Sotomayor, according to a source, replied, "When you don't have money, it's easy. There isn't anything there to report."
There has to be a better way to manage money than these models. On the other hand, as the 5402 concluded a while ago in our discussion of thrift, it's actually really difficult to pin down a compelling reason to save instead of spending (especially when one has no family obligations or debt to repay), particularly a reason that includes an idea of how much saving relative to spending is necessary or desirable. My default is the more, the better, but not so much that I have to give up buying my delicious cup of Southern Pecan coffee from Firehook three time a week. However, not washing my hair to save on shampoo could be good, and I also have on several occasions used Andrews's strategy of waiting 10 minutes on the Metro platform to save 50 cents on an off-peak fare. On the whole, that is a pretty incoherent philosophy.