Provident Mom

Alright, girls. You have money coming at you in the mail. I’m sure by now you have calculated about how much it will be and thought of a thousand things you could buy with it. The kindergarten moms have been discussing these very issues as we wait for our 5-year-olds to emerge from the school.

We all know that lawmakers are hoping that this tax rebate will stimulate the economy. After all, it’s part of the noble sounding “stimulus package.” How will giving money to regular Janes like us stimulate the economy? Well, generally speaking, when Americans have money, they spend it. Spending should help businesses do well, which should help stocks to rise, which should make everyone feel more comfortable.

Does this make sense? Where is the money coming from? Isn’t our country in major debt already? Aren’t we at war? In past years, during wartime, Americans sucked it up and went without sugar and nylons. But now we just complain about the war whenever we see an update about it on our big screen TVs.

Enough ranting. I read recently that one of the major reasons for this economic downturn is the negative savings rate. Over the past 20 years, the savings rate in America (the amount of money Americans save from their paychecks) has diminished to the point of nonexistence. Today we actually have a negative savings rate, which means that people spend more than they make. When there are no legitimate assets, capital costs more. It costs more for small businesses to take out loans.

So here’s my tax rebate dream. I have a dream that people will take their tax rebates and pay off their debt. Pay off the credit cards. Pay off those cars. Pay down those mortgages. If you don’t have debt, then put that money in the bank or invest it in something worthwhile (not the lottery). You don’t need an iPod or a new cell phone or new curtains.

Or if you have considered starting a business of some sort, use this money to start a business. Do something with it that will help your financial outlook. Buy some food to store away for a rainy day. But whatever you do, please don’t go out and blow this money on electronics.

Consumerism is something we’re very good at in America. We buy things to solve problems. If our closet is disorganized, we buy shelves and hangers and drawers. If we’re overweight, we buy frozen diet food and books and pedometers. If we’re not sleeping well, we buy new mattresses and sleep-inducing aromatherapy products. Parents know all too well that bribing their children with toys or special treats gets results.

Lately, I’ve noticed that consumerism is creeping into another aspect of parenting, but it’s not consumerism as we traditionally think of it. I’m talking about the consumerism of experiences, the buying of experiences. These days, it’s not enough for parents to make sure that their children have the necessary set of items: clothes, toys, books, bikes, special toothbrushes, deluxe lunch boxes, etc., etc., etc. It’s now imperative in many circles for parents to buy their children a certain set of experiences.

For example, I was talking to a friend the other day who had been babysitting some children, and she couldn’t believe that these kids didn’t have even rudimentary skills in ice skating, skiing, and swimming. She said that she feels it’s essential for kids to have at least basic skills in the following activities: ice skating, swimming, skiing, basketball, soccer, dance, softball, and a musical instrument, preferably piano or guitar.

Now. Don’t get me wrong. I think it would be wonderful to be good at all of the above activities. But there are currently 24 hours in each day. Kids should spend about 10 of those hours sleeping and about 7 hours going to school. That leaves 7 hours for eating, bathing, chores, homework, playing, fighting with their siblings, reading a book or two, and talking with their parents. Fitting in ice skating, swimming, skiing, etc., has to push out some of these other activities. What do you eliminate? Homework? Bathing? Sadly, what gets pushed aside is home life.

Yesterday afternoon my kids surprised me by playing well together, all three of them, for hours and hours. In my bliss, I completely forgot about gymnastics and then felt guilty, both because my son didn’t get to go and also because of the money I’d already spent on the class. When I realized we’d forgotten, I apologized to my son, who didn’t care one whit that he’d missed his class. And then I got to thinking that maybe playing with his sisters was a more valuable experience for him. Maybe developing all these “essential skills” is creating a bunch of self-centered kids who don’t have any social skills and don’t see others for who they are. They only see them for how well they can kick a soccer ball or play the guitar.

I was a foreign exchange student in Eastern Europe in the early 1990s, and I remember being surprised (and pleased) at how far my US dollars went. At one neighborhood store, I could actually get 30 scoops or ice cream for one US dollar, which caused me many hours of aerobics once I returned to the states.

With the advent of the Euro, Eastern Europe is not as inexpensive for Americans as it used to be, but there are still many places in the world where a dollar can do a lot. I’m not painting this picture for you to get you excited about traveling. I’m trying to make a case for microlending, which is something that little you can do to make a big difference in someone’s life.

Microloans are business loans for people who need just a little bit of capital to start their businesses. They may not have anything to put up for collateral. In fact, their only collateral may be their skills and ambition, and therefore, no traditional bank is going to offer a loan.

This is where you and I come in. Regular old people like us can loan money to people around the globe to get their businesses up and running. Microloans are not donations; they are loans that will be repaid, generally within 18 months.

Non-profit organizations such as Kiva, ACCION International, Five Talents, and PlanetFinance organize and disburse the loans, but they need funds from people like us. I lend through Kiva, and with Kiva you can loan as little as $25 at a time. Your $25, along with similar amounts from other lenders, goes toward a small business of your choosing. You get email updates as to how the business is going and how much of the loan is repaid. When the loan is completely paid off, you get your money back. You’re free to take your money and use it yourself, or you can lend it out again.

There’s the old saying, “Give a man a fish and you feed him for a day. Teach him how to fish and you feed him for a lifetime.” Microloans allow you to buy the man some fishing nets so he can employ other people, and the whole village can have fish for dinner. It’s a marvelous idea, and it’s so easy to get involved with it.

I’m a stay-home mom in a suburban town. My circle of influence seems pretty small, but microlending allows me to make a difference in places I’ll never get to see. My measly dollars may actually help someone to change her own life and the lives of her children.