Thrift and the Lost Decade

Let us all be happy and live within our means, even if we have to borrow money to do it.
~Artemis Ward


My father died in 2000. During the last 15 years of his life ATM machines and debit cards took the world by storm. The era of the neighborhood bank teller was slowly coming to an end. One Christmas I remember visiting my 80-something year old Dad. He insisted we go to the bank since he needed to withdraw some cash. "I don't trust those bank machines," he mumbled. "I want to see a real, live person." And so we ambled up to the counter, my father with his cane and me with a big, fat smile. The person on the other side greeted dear old Dad by name.

My father, born in 1913, was a child of the Great Depression while I, born in 1963, grew up during the period of stagflation, the Nixon-Ford-Carter years. Both my parents taught me the importance of saving because thrift was a respected virtue for the WWII Generation.

My freshman year in college I remember receiving my first introductory credit card in the mail. I called home, confused about why any lender would offer a jobless college kid license to charge his expenses.

"Awww, geez, that's crazy," Dad barked over the phone. "Cut it up. You don't need a credit card to spend money you don't have." For a moment I thought about how I might redecorate my new dorm room or splurge on clothes but I'd already arrived with new sheets, towels, a comforter, clock radio, and beanbag chair. I took scissors to plastic and threw the jagged pieces of the Mastercard in the garbage.

In 1997 when I bought my Seattle condo on Capitol Hill the mortgage broker, an honest and forthright chap from an old line savings and loan, quoted me the maximum I could spend on my home purchase. My real estate agent encouraged me to buy at the upper limit because my future earnings would surely exceed my current salary. I appreciated the realtor's vote of confidence but chose a less costly home to avoid mortgaging myself to the hilt. What if at a later time I wanted to take a lesser-paying job with a non-profit or arts organization, the right side of my brain asked my left? An expensive mortgage might hinder my options.

Lately I've thought about my father's thrifty habits, and how they influenced me. I've maintained bank accounts both at a large, traditional bank and a community credit union. Last week the large bank informed me to expect a $25 per month maintenance fee if I didn't keep a $300 minimum balance in my savings account. A day earlier my friend, a university professor in his 70's , complained about receiving a similar alert in the mail. He maintains a checking account where his monthly Social Security check is deposited;  the bank also administers the mortgage on a small Florida property where he winters.

Incredulous that the recently bailed out bank, one of those "too big to fail" behemoths rescued by our tax dollars, wanted to leverage more fees on his accounts, my friend decided to withdraw his money and take his business elsewhere.

When I called the bank a very helpful woman by the name of Renee answered the phone. My savings account balance was relatively meager so we decided it made sense for me to close the account but I would need to make a personal visit. I walked to the Capitol Hill branch. My typical habit is to pay off my monthly credit card balance at this bank (in person, like Dad). Renee assured me I could continue to do the same without incurring a charge after closing my savings account.

When I arrived for my appointment, the customer service rep indicated Renee would see me next. I peered over to see her engrossed in conversation with a young Chinese student dressed in sweater and tennis shoes. She led him through the steps of opening an account, choosing a pin number, and assigning him his ATM card.

I thought back to when I first arrived in Seattle, fresh out of college. I opened a checking and savings account at the Broadway branch of this locally-owned bank soon after my arrival. A year later I decided I was financially responsible enough to obtain my first credit card.

I reflected on the resentment so many Americans now feel towards banks and other financial institutions who took unnecessary risks with investor money during the course of what many are calling "The Lost Decade." The leveraged mortgages sold to people who couldn't afford them, the real estate speculation, the depleted 401K accounts, the disappearing jobs and falling incomes of the American middle class, and the crushing debt of many young college graduates with limited job prospects due to a prolonged downturn.  The public feels outrage that we bailed out the banks, only to get further penalized by their reluctance to lend and their fat bonuses to business executives who created the crisis.

Finally Renee finished setting up the accounts for the young Chinese man. She invited me to her desk and said "I'm sorry we'll be losing your business, Mr. Hilovsky." Sitting across from her I smiled and said "Well, I still have a credit card with you."

She nodded and began the process of closing my account. When I asked what she studied in school, she replied, "Business administration, though I wanted to work in the retailing industry. This is a good job." I liked her and told her she had a gift with people.

As we completed the transaction I signed the final paperwork closing the account. The memory of patronizing this local bank in my twenties and the rite of passage it entailed left me a little sad. Renee introduced me to her branch manager who gave me his business card and encouraged me to come back if I ever wanted to reestablish an account. I thanked him, nodded and walked through the revolving door of the bank.

I'll be fine with my one account at the credit union, I thought to myself, peering outside at the falling leaves in the parking lot.  And I thought of my father nodding in approval.