The views expressed in Guest Opinions are those of the authors only and do not represent BizSense or BizSense reporters.
The holidays are a time for oft-told tales like Charles Dickens’s “A Christmas Carol.” Richmonders have the opportunity this month to attend an adaptation of the story at CenterStage or to watch Disney’s new 3D animated movie.
At first we feel sorry for the Cratchit family, always struggling to make ends meet. Poor Bob Cratchit must work for Ebenezer Scrooge, whose skinflint personality makes him an easy target as the cause of Bob’s financial troubles. But despite Bob Cratchit’s resentment of his boss, he has no one to blame but himself.
Bob Cratchit spends more than he makes. Indeed, the discipline to regularly spend less than you earn is one of the most important life lessons.
As a clerk and member of the British middle class, Bob Cratchit lives a genteel life. He goes to work dressed in a coat and tie. His family lives in a four-room house and has a much easier existence than most others in Victorian England. Bob earns more than an ample wage.
His salary, we are told, is 15 shillings a week. The British pound was divided into 20 shillings, and each shilling was worth 12 pennies, or pence. So Bob Cratchit makes 180 pence each week, about the wage of a metropolitan police officer and well above the truly needy.
So why is the Cratchit family so poor?
Bob Cratchit is a spendthrift. He has no cushion. He lives paycheck to paycheck. The impulse to spend every cent you make affects people across the socioeconomic strata. Those living below the poverty line spend to forget their circumstances. The middle class spend all they have to keep up with their neighbors, and the wealthy often feel compelled to spend on lavish vacations and frivolous purchases as proof of their success.
Spendthrifts live for the pleasure of the moment. Eating out and boutique shopping are perceived as immediate pleasures for relatively small amounts of money. People do not realize that the purpose of budgeting and saving is to make sure they are spending money on what they really want and need instead of frittering it away.
The impulse to get a “good deal” can lure even those who consider themselves thrifty. The Cratchits buy a beautiful goose and then admire it for its cheapness. The Cratchit family are typical spendthrifts when it comes to clothing. On Christmas, Bob Cratchit confers on his son Peter a shirt in honor of his apprenticeship. It was common in the day for the rich to go through the Parks to show off their finery. And Peter is amazed to find himself so gallantly attired that he too is anxious to show off his fashionable new linen in the park.
Making a good show is important for spendthrifts. Mrs. Cratchit’s ribbons cost about two to three weeks of medical attention for the entire family. Their second daughter, Belinda, is also brave in ribbons too — another three weeks of medical attention.
Many spendthrifts justify their purchases as “investments.” They often buy jewelry, clothes or even fancy house wares as an investment to provide themselves an excuse to gain the trappings of a richer lifestyle. This purposeful self-deception shows the depth of a typical spendthrift’s denial. An investment is something that pays you money, not an article of clothing.
America is full of Bob Cratchits. A negative national savings rate provides ample evidence that the American public continues to show a special propensity to consume beyond its means. Our attics and basements are full of clothes and gadgets that seemed essential at the time but have largely been a waste. Those affected can never grow rich because wealth is what you save, not what you spend.
Spendthrifts get caught in a vicious cycle that can be extremely difficult to break. Spending money brings short-term satisfaction, but living paycheck to paycheck is stressful.
Bob Cratchit needs to learn the “Save, Give, Live” lesson of life. Everyone with an income, no matter how big or how small, should be saving a portion of it. Saving, even a tiny amount, is an act of defiance against the gods of our consumer culture. Giving, especially during hard economic times, is an act of faith. Charity inevitably offers the largest return in the life of the giver.
Living off only the remainder of one’s income takes patience beyond the capacity of most Americans, but contentment is the priceless reward. In contrast, after the initial excitement about an extravagant purchase wears off, most people without any savings find that anxiety quickly overwhelms them. Breaking out of this pain-and-pleasure cycle requires willpower.
Because Scrooge has saved and invested, he is able to help the Cratchit family. But you should not count on a reformed Scrooge to bail you out financially. Sometimes life demands that you become a reformed Cratchit instead.
Perhaps this is why the Spirits visited Ebenezer. It was easier to make a frugal man generous than it was to make a spendthrift father financially responsible.
David John Marotta and Mathew Illian manage Marotta Wealth Management, which has offices in Charlottesville and Richmond.
Well, aren’t you two a pair of cheery souls.
A timely and original take on a classic story. Thanks for the well written piece. I look forward to your next contribution to BizSense.
How long are the chains you are forging in life?
“despite Bob Cratchit’s resentment of his boss.”
Bob doesn’t resent Scrooge, he admires him and goes so far as to insist that his family give a toast to Mr. Scrooge as the founder of their Christmas “feast.” The family speaks euphemistically of the goose as being beautiful, but the Spirit of Christmas present points out that it is barely enough food to feed the family.
The Cratchit’s have four rooms. Not four bedrooms, but four rooms. They have six children, five of whom still live at home. Seems pretty modest to me. I suppose if they wanted to save money they should have taken steps not to have so many children. While we’re passing judgement, is it a trait of spendthrifts to have more children than they can afford, or is that off limits?
The shirt given to Peter is a hand-me-down that belongs to Bob, so there was no extravagance there, and Bob’s clothes are described as threadbare. You also failed to mention that Mrs. Cratchit’s gown is twice-turned, meaning the fabric has worn out on one side and the dress has
been resewn on th the reverse side to stretch their clothing budget – not the practice of a spendthrift.
The ribbons cost six pence which is about 3.33 % of Bob’s weekly income, so the total is 12 pence. Assuming someone makes $9 an hour for 40 hours and brings in 360 dollars a week,
this would be the equivalent of about $24 for ribbons.
Also, Tiny Tim’s chronic disease must be a huge drain on the family budget and morale.
This is a family on the edge of financial and emotional collapse, so I’ll forgive them a few ribbons if it helps keep their spirits up. Sure, there are families who are worse off than the Cratchits, but it is not the Cratchits who ask us to feel sorry for them. They are happy just to be together at Christmas.
I think the Cratchit family does an excellent job of utilizing what they have, and for the most part they do not complain about their station. Mrs. Cratchit gets a bit testy, but who doesn’t believe that their spouse is worth more than they get paid? We should all aspire to be more like the Cratchits, who transcend materialism and realize what is really important in life.
You’re picking on the wrong people. I know you want us to play along with your premise, and of course many Americans (and the Cratchits are not American) are guilty of living beyond their means. However, there are a lot of Cratchits out there also and I say God Bless them all, everyone!
Merry Christmas and Happy Holidays to you!
Well written column and good response from Poe Knows. Here are my two cents, which I should probably be saving, but….
On more than one occasion I have read that less successful people or financially strapped people envy those above them. Whether the authors of the column fall into this trap I cannot say, but Poe Knows makes a good point calling them on it. I don’t see a case of envy in the case of the Cratchits.
After that it’s pretty easy to see why the Cratchit family struggles, and Poe addresses the issue in part. Six children, one of whom is in chronically bad health, are quite the financial load to bear. Forget the fact that Cratchit makes a decent salary. The only question that matters is does he make a decent salary *to support eight people*? I realize there is no modern birth control in Victorian England but if the lessons of Scrooge are to be carried forward, perhaps we should start there. Have as many kids as you can afford to raise, stop when you can afford no more. Scrooge can afford six kids and Cratchit clearly cannot. Children are a blessing but parents have an obligation and a duty to be realistic about the price tag associated with their bundles of joy. While that was not an option for the Cratchits, it is an option in 2009.
And now for the can of worms.
There are many on the right who believe the social safety net is entirely too costly, and they make very valid points. There are also many on the right that would do away with abortion entirely, which would ultimately bring many more children into the world. Some people are not ready for children for a multitude of reasons and some make the difficult choice to terminate their pregnancy rather than bring a child into the world they are not prepared (financially or otherwise) to properly raise. If abortion is eventually outlawed, there will be many more Cratchits than before (except a lot of them will be single parent households). For those that oppose abortion under almost all circumstances, are you prepared to be Scrooge to these Cratchits? For those would be the unintended consequences of outlawing abortion altogether.
Just saying….
And Merry Christmas and Happy Holidays all around.
Thank you for your comments. The UK has 5 data sets available to that we reviewed to in writing this column to compute the historical value of currency. We believe that the “average earnings” is a logical measure for comparing relative wages. You can view the calculator here:
http://www.measuringworth.com/ukcompare/
A Christmas Carol takes place in Victorian London, in the year of 1801. This is suggested when the Spirit of Christmas Present says that it has 1800 brothers, because he only lives for one Christmas. Bob Cratchit’s weekly salary of 15 shillings during 1801 (UK data only goes back to 1830) is equal to 624 pounds or 1,013 dollars. That’s an annual salary of $50,669.
Our point is not to turn Cratchit into a Scrooge but to recognize that he has the means to save. Saving and investing even $100 a month over a working career produces a million dollars.
I’ve always thought that Bob Cratchit needed to man up and take some responsibility for his life. If Scrooge under paid Bob Cratchit he was always free to seek other employment or save up and start his own business. He is meek to the point of not having an opinion. He never answers Scrooge. Then back at home as Scrooge is considered the Ogre of the family, Bob let’s his wife opinion rule the house. Finally, even after promising that he would be all the more early to work the day after Christmas he is eighteen and a half minutes late to work with the hung over excuse that he “was making rather merry yesterday.”
Even Scrooge comments that his clerk with a wife and family can’t afford to be talking about a merry Christmas.
Man up Bob Cratchits of the world!
Good comments all, but neither the authors or the previous commentors give credit to Scrouge for his “green” activities. While Bob and family are busy increasing the carbon dioxide in the air via burning fossil fuel with wild abandon and producing human CEU’s ( carbon emission units), Scrouge is doing his bit to save the planet.
Bob is cold at the office and whines to Scrouge that he wants to put more coal on the fire, but Scrouge knows coal does not grow on trees (without the benefit of a university degee, mind you) so he tells Bob to turn over what coals are there to generate more complete combustion. Talk about the spirit of the Holiday Season! Scrouge, and those like him, should get a nobel prize posthumously for saving the planet for us. Why not, just about every one else is.
The sacrificies Scrouge made for us go beyond mere fuel effeciency. He also abstained from procreation and thereby reduced the number of the dredded CEU when he passed. Not so Bob. He and the missus (and who knows who else) were rutting like a pare of polar bears in Greenland. This lack of decent consideration for the lives of future generations also drove up medical costs. Bob was a user to be sure.
Without Scroughe and many like him whose frugality begrugingly kept the temperatures down, New York would probalby be under 20 feet of water and polar bears would be roaming the blue ridge looking for hikers garbage cans to tip over. Thanks for saving us Ebenezer Scrouge, you have earned a place in the climate controled eternal enviroment of a mystical place only spoken of by the spiritual.
A breath of fresh air during this season when we are blitzed with commercials for products that we are told will make us happy. Long live the thrift!
Tiny Tim should be the poster child for universal health care. Even if Bob Cratchit is a a spendthrift, Tiny Tim is certainly not to blame. In fact it is because of parents like the Cratchits who would rather buy things than health care that the government should not give them that choice. They should tax the Cratchits of the world and then provide them with free health care.
An excellent and surprising viewpoint on the traditional story. May I suggest that we readers are encouraged to despise Scrooge because of his crabby unfriendliness, not his frugality; and we are encouraged to like Cratchit because of his meek friendliness, not his poor earnings. Bob Cratchit and Mrs. Cratchit weren’t planners, either of savings or offspring. They are rather like the grasshoppers of Aesop’s fable. As someone who strives toward the ant’s position of preparedness, I frankly resent the grasshopper-like, planning-averse humans around me, many of whom are on welfare. Depending on the generosity of others (either individuals or government agencies) in lieu of working harder does not compel any respect from me.
There is a price for every choice. Those who choose to drift thru life without amassing any skills that are considered valuable, preferring to lounge in their front yards every summer afternoon, swilling cold beer and trading stories with their buddies, while I drive back to the office after lunch, are making the choice to coast rather than climb the hill that I climb. Let’s say one of them has a chronically ill child. Let’s suppose that his last name is Jackson, or Ramirez, or Doe, rather than Cratchit. Should I feel compelled to help bear his burden?
Honestly, I’d be much more inclined to donate toward his particular tearjerker story if I perceived that he were already working as hard as possible toward a solution. If his older daughter has a brand-new smart cellphone (in lieu of ribbons), his son is wearing expensive brand shoes, and his wife (or baby mama, given today’s culture) were driving a late-model Lexus, I’d be pretty resentful of any expectation on his part for me to contribute to his family’s perceived financial “needs” (either directly or indirectly thru taxation) when I drive a 2004 Toyota, use a 2-year old basic cell phone, and buy my shoes at Goodwill so that I can stash some cash to contribute to my IRA.
If he’s trimmed his family budget already and his teenage daughter is contributing her earnings from a part-time job, then I’m prepared to sacrifice a little to help them reach their healthcare solution. But I see no reason to contribute toward the costs of their basic needs when they are spending all their income on wants. But that kind of frugal attitude was pretty rare until recently, and I still am not very impressed with the recent adopters of frugality, because it was forced on them, as I see it. They still think they “deserve” luxuries like a big-screen TV and Hawaiian vacations.
Whatever you can pay cash for, you can afford. Said my late grandmother, who had it down. But that attitude is distinctly old-fashioned.
Yes, Tiny Tim was blameless with respect to his congenital condition. But so am I blameless. Becoming a parent, in my eyes, brings with is an enormous level of responsibility, including your kids’ health. Man up, Bob. Until the Cratchits consult me about bringing yet another mouth into the world to be fed, I hold myself free of responsibility for their financial welfare. I clean up my own messes, however large they may be. I’d willingly give the shirt off my back to the victim of a house fire, but not to the lazy jerk who spent his entire monthly welfare check on booze. I’ll accept volunteered help, but I won’t beg.
I’d be grateful if the Cratchits of this country take the same attitude, helping each other to weather the catastrophes but taking care of the routine expenses/duties they created. Friendliness does not negate Bob Cratchit’s fundamantal lack of ability to be responsible for his own situation. Harsh, yes, but that’s what results from infringing too much on any person’s generosity.
Alli and Samantha, I am grateful that you picked up our allusions to the health care reform debate. We generally believe that the current system is unsatisfactory but that the reforms that are being offered by the democratic party leadership does not address the primary issue which should be cost control. So many are reluctant to pay for insurance because the costs are so high. The problem is that no one knows how much anything costs.
There are people on Medicaid who call 911 every time that they want a lift to the hospital for a check up. Why would they pay for a bus fare when the ambulance is free?
The problem is not just with the poor. Next time that a doctor prescribes a medicine or proceedure to you, ask them how much it costs. They don’t know. My best friends are doctors and they simply are not trained to conceive of costs. I had a doctor prescribe me a foot cream that was going to cost over $100 for 5 oz. After going back to the same dermatologist, I found that there was a perfectly suitable generic that cost a fraction of the price. But I haven’t had to purchase that because I was given a handful of samples that will supply me for the year.
The health care market is only going to become more dysfunctional with Obama-care. We fear that it may be too late to find ways to control costs so that we can make insurance more affordable for all.
I read this piece and at first it made me cringe. Why am I so uncomfortable with it? Upon further reflection, I realize there are elements that apply to me, painfully true elements. I think that we all have a bit of the spendthrift in us. Whether it is cars, electronics, or shoes, we accumulate something beyond our needs with the justification of moving it from the ‘want ‘category to the ‘need’ category. It can be disturbing to conceive of denying ourselves of these little luxuries. What would happen if we could? Once I got past my initial defensive response, I started to ponder the truth of this articles content. I realize I have room for improvement in both thoughts and deeds. My New Year’s resolution is going to be to spend less and save more.
my favorite line was: “It was easier to make a frugal man generous than it was to make a spendthrift father financially responsible.” I want to believe this line, but I am not only unsure of its truth, it would confuse me if it was true. Why would it be so hard to break bad habits of a spendthrift (usually formed that way by their culture) through education of skills and easy to change the heart level relationship and desire to be generous of a frugal man? If it is true, isnt it really because a little generosity is not hard for someone who has the means to give easily? and the debt that accrues so easily for a spendthrift is an oppression very difficult to overcome with a little will power?
Good grief! Am I the only one in complete agreement with Poe?! I guess I read a different story than Mr. Marotta and the rest of you who agree with him. The was nothing I read in “A Christmas Carol” that led me to think Mr. Cratchit was a spendthrift. Yes, he celebrated Christmas but as Poe pointed out it was far from extravagant. True, he could have not celebrated Christmas and saved some money but I guess as far as Mr. Marotta is concerned, the poor should be completely miserable as well. As for some of the other criticisms such as why didn’t he just get another job and why’d he have all those kids; well, I think you’re ignoring the realities of 19th century England. In England, especially at that time, the social caste system was very rigid. In other words, you couldn’t advance very far above the station you were born into; those who managed to escape it were very lucky. So there were probably only a limited number of jobs for someone of Bob’s station and skill level. As for the kids, because of the strict moral codes of the time, there was little or no access to birth control; they might not have even known about it. Of course, there’s some speculation that the upper classes were using it since they were having fewer children. Also, infant and child mortality was higher then; there was no guarantee a child would make it to adulthood. If the children survived, they were put to work right away. Since there were no child labor laws, even very young children went to work, oftentimes in dangerous conditions as there were no occupational safety laws at the time, either. All of which meant the children of the poor received little or no education, further reducing their prospects. All the social safety nets we take for granted today were not in place and what was available such as workhouses and prisons were far from pleasant. Of course, it seems to me that most of the people commenting here wouldn’t mind a return to the 19th century.
Interesting take on the traditional story but the point, I always thought, was that the Crachits were a family, open to having children and giving of themselves, while Ebenezar was an old crochety bachelor but very successful financially. Most families never save as they should, and pamper their kids too much (I came from a family of 5, and I remember that). The point of the story is that both sides learn something from the other, and hopefully live better lives in the future. Makes you wonder what would happen if we financially analyzed the original holy family of Jesus, Mary and Joseph ! How would they look on the financial charts..??!! Merry Christmas everyone….!!
Robert Gregg, A financial analysis of the Holy Family…what a wonderful idea! We might give that column a go next year! For those who are interested in such a topic, I am reading Anne Rice’s recent series on the life of the Holy Family called “Out of Egypt” and “Christ the Lord” – a fascinating and daring take on what life would have been life for the 1st Century Jews – written in the first person from the perspective of Yeshua bar Joseph (Jesus). Lot’s of great info on the economic station of a family that ran a carpentry business.
I am sorry, but the authors have totally misread the story – mainly by applying 21st Century American observations to mid 19th Century Britain.
There is no evidence that Cratchit was a spendthrift at all. The story only covers the Christmas period and Dickens makes it clear that his extra expenditure is to brighten the Christmas festivities (hence the ribbons for the girls).
There also is no evidence that Cratchit spent beyond his means. There is no mention of him being in debt. The closest is the reference to pawn shops. However, in that period it was common for the lower classes (for that is what Crachit was, not middle class at all – Scrooge’s nephew was middle class) to use pawn shops as a means of getting a temporary loan. It would have been the Victorian equivalent of a credit card.
The calculation of Cratchit’s wages shows ignorance of how the UK’s currency changed in 1971. 15 shillings was three-quarters of a pound. Using historic inflation calculators, 75pence (not 180pence) in 1843 is worth 71 pounds now (or about US$115). The lowest pay scale for a Metropolitan Police Constable is 414 pounds a week, so Cratchit is clearly nothing like as well paid as the article implies.
Dickens knew well the importance of balancing earnings and spending (cf Mr Micawber) and money is a common theme in his writings. If he had intended Cratchit to be a spendthrift (which would, frankly, have made a mockery of the whole take of redemption), then he would have done so.
Doug made a comment about Bob Cratchit starting his own business or finding another job. Clearly, Doug has no idea about the history of Victorian England economics and class barriers.
There are some errors with this analysis and the some of the comments. There is certainly no resentment shown by Cratchit although his wife and family do show some. There is no doubt that the story happens contemporanously with when it was written and not in 1801 (the ghost refers to having more than 1800 brothers). There is also clear evidence of the industrial revolution being in full swing.
That said there is indication that we are supposed to “blame” scrooge for condistions which are not his fault. He certainly didn’t injure Tiny Tim and he doesn’t make merrry himself. He knows what he is talking about when he says “‘This is the even-handed dealing of the world.’ he said. ‘There is nothing on which it is so hard as poverty; and there is nothing it professes to condemn with such severity as the pursuit of wealth!’ ” Bob is praised for being poor and a burden on society while Scrooge is condemnd for being self reliant.