I had the privilege of interviewing a middle-aged woman named Joyce Clawson, and was able to get a more in-depth look was what it’s like to get older, go to college, get a job, and go through the financial ups and downs of adulthood and parenthood. Joyce is a 55-year-old private therapist, and single mother of two, who has lived and worked in Portland for the majority of her life. She has done her best to plan for the future and be financially responsible, and in my opinion represents someone who has been very smart about how they have invested their time and their money, and who has ultimately created a happy life for them self. As I look forward to having the new responsibilities that come along with entering college, and then soon after entering the work force and adulthood, I have often found the entire prospect daunting. However, listen to Joyce’s path through life has put me more at ease, as she is living proof that if you are smart and keep your eye on the ball from early on, things will work out for you and your family.

As I said before Joyce has lived in Portland for nearly her whole life, but the few years she was away were the 4 years she was in Washington, at Pacific Lutheran University, getting her bachelor’s degree in psychology. Joyce was studying to become therapist like her father, and in order to open a licensed practice she needed to obtain a master’s degree. Joyce decided to move back to Portland and live with her parents while she studied for master’s degree in counseling phycology from Lewis and Clarke college in order to save money. While in grad school she also worked at Nordstrom to pay for the loans she was taking out, as well as save what little money should could. After completing her masters, Joyce still needed to complete 2000 hours of work at a mental health facility to become licensed and immediately got a job at a center for disturbed children in Portland. Joyce spent 8 years and a lot of money in tuition to raise her “human capital” by staying in school an extra two years as well as by working at the federally funded job. She did this with the hope that it would allow her access to a higher paying job, and ultimately a more financially stable life.

Joyce was correct about this opening the doors for more opportunity in her life, and she hit the ground running as a young adult. She got her own rental as soon as she was done with grad school, and shortly thereafter met her future husband. They moved in together and shared the rental that she was already living in. She put off entering private practice at first, and continued to work at the center for children, because it had a great insurance package and offered raises up to 16% annually. After getting married and entering private practice, she and her husband invested in buying a home in north Portland for 84,000, with they believed was an up and coming neighborhood and would turn out to be a smart move. She ended up selling the house for 394,000 in 2012, but owed the government 100k in taxes on the sale. She said this was very aggravating and even a shock, because she was right to invest in that area and was able to turn a huge profit, but lost about half of it to the government and the other half went to buying a new house. Because of this she was unable to save any money from the sale, and was initially very upset that this was the case. She lived there for 17 years, and during that time had two children, and got divorced. She said that getting divorced was the right move emotionally, but it required she take a financial hit. She went from living in a two income household to a one income household. She felt that she is now worse off than her parents because of this, as her parent tare both educated with degrees in teaching and counseling and were able to bring in more money. This choice reminded me of the economic principal, “choices has consequences that lie in the future and reshape what’s possible”. Because she split with her husband, she lost about half her income and had to become a single parent, which she said was very stressful both emotionally and economically, but the right thing to do in the end.

Currently Joyce makes a net income of around 98,000 dollars a year, and is living in southwest Portland. Her children are now in college and she is working full time as a private counselor. She feels like her wage is a livable wage, but also feels that it is still difficult living with one wage of this size, as it disqualifies her from any government aid. She ends up spending a lot of it on necessities and paying for her children’s college, which leaves her with relatively little to spend on superfluities. She believes she is middle to upper-middle class based on her wage and her level of education, and is relatively happy, but is more stressed out than her parents were. She has been saving for retirement since the age of 22, and in my opinion, is a perfect example of how someone should save for retirement. Just like we learned to do, she started early, puts about 12% of her income away each month, and has invested it in an IRA. She plans to move her investments to bonds in the next 5 or so years to ensure that she does not lose any of her retirement fund as well. She has been very smart about how she has gone about setting this fund up, and seeing how comfortable she is now, I feel encouraged to take after her in her methodically and responsibly planned retirement fund.

Looking back over what she has learned and experienced she gave me the advice to start saving as early as you possibly can for retirement, as well as be responsible about how you pay for college. She went to college when it was much cheaper, and going through the process again with her kids has made it clear to her that young adults need to be careful about the loans they take out. She said if you can go to community college the first two years and live at home before transferring to do your work for your bachelors and your masters if you get one. She felt that her most valuable expenses were those that she spent on trips with her children. As an adult Joyce feels like spending money on experiences with those you love it worth so much compared to anything else, and is something that you will remember forever.

I chose the photo below to represent Joyce because she is a hard working single woman, who has worked hard to get where she is today. She is middle age and still working as hard as she ever has.

source:

http://www.provident4women.com/insights4women/must-haves-for-working-women

Reflecting back on my interview with Joyce, I felt the two most important things to understand about her economic history were her two investments of buying a home and getting a master’s degree. These investments worked out for Joyce, but after all that has changed since she initially made these investments, Joyce is a bit wary about how successful her decisions would be if implemented in today’s economic environment.

The graph below depicts the average price of a home during the time that Joyce owned her first home. It is an important graph to keep in mind as it shows that when Joyce bought her house in 1994 for 84,000, when houses were fairly cheap, she was buying a house that was about the average price for a home in America at the time. However, even though she didn’t sell at the housing markets high in 2007-2008, she was able to sell her home for 250,000 above the national average in 2012 when she sold for 394,000. Joyce was smart to invest in the area that she did, and it is because of that foresight that she was able to sell a home she got at the average price in ’94 for a price vastly above the average in 2012. Despite this success, due to Obama’s change to taxation on the sale of a first home, she was not able to reap all of the benefits she could of off of this wise investment. Currently it is more expensive to buy a home compared to when she bought hers, and ultimately a harder investment for young adults to make compared to when she made it back in the 90’s. Because of this rise in price it is likely a person won’t be able to make as large of a profit off of their first home, and because of that Joyce suggests that they wait to buy a home, rather than make such a large investment early in adulthood.

source- http://www.provident4women.com/insights4women/must-haves-for-working-women

This second graph is imperative to keep in mind as well, as it represents the rise in the amount of loans that students are taking out to pay for college in the past ten years. From 2006 to 2016 this number has just about tripled, and is becoming a higher and higher financial hurdle to clear and recover from at a young age. Joyce went to 6 years of school in the 80’s when the loans required to pay for tuition were much more reasonable, but currently loans are rising at such a fast rate that it might be worth it to just not go to college. Speaking with her rehashed all the things we spoke about when discussing if college was “worth it”. In all honestly nowadays it might not be depending on what field the graduate is entering, as it will put them in a significant amount of debt, and make it harder for them to save for the future, as well as afford things in the short term. It’s a situation that perfectly represents the principal of economics, “choices have consequences that lie in the future and reshape what’s possible”. If you go to school you will have access to higher paying jobs, but you may not be able to save as much for retirement, or afford to own a home until you are well into adulthood. If you don’t go to college you won’t be in debt, but will likely make less money and not have as a large of job selection. It is worth it for me to go to school, but if rates keep going up I can’t imagine it will be worth it in the 10-20 years. Things have changed a lot since Joyce attend university, and I can only imagine looking forward what college will look like when I am 55 if things don’t change.

It was a wonderful experience speaking with Joyce, and gaining insight about adulthood and managing yourself financially. I had not yet considered how drastically things can change over the course of 30 or so years, and that many things simply cannot be planned for. However, despite discussing how much is unknown and uncontrollable, it was clear speaking with her that it pays off to save and make smart investments in areas that you can control. The message that came through the most from her was that creating a solid game plan is a great start, but being able to work with the ebb and flow of the economic world as it changes is also very important, as things never stop shifting around.

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