Can Hipsters and the Artisan Economy Save the Middle Class?

Before you go, we thought you'd like these...
FACTORY CLOSING
Kathy Willens/APA view of the Williamsburg Bridge and the Brooklyn skyline.
BROOKLYN, New York -- Could the key to saving America's middle class be found in a once-abandoned industrial site in Brooklyn?

When pharmaceutical giant Pfizer (PFE) closed its Brooklyn factory in 2008, 2,500 people lost their jobs. For years, the building remained vacant, another reminder of lost business and revenues. Then, over the past two years, several start-up businesses began to rent space in the location, creating a small business incubator for the city, thanks to Acumen Capital Partners and Ashish Dua.

The site that rumored has it witnessed Viagra's creation has now given birth to several new companies. Occupants now include makers of tea-based probiotics, animal leashes that support pet adoption, and even alcoholic slushie drinks.

The plant's tenants currently employ 1,000 people. However, with only 40 percent of the space occupied, and some businesses growing, the number of individuals working on the site may soon return to levels last seen when Pfizer was in residence.

It's a trend that's not limited to a single repurposed factory, nor even a single major city. Across the country, the "artisan economy" is growing. Could it be the key to saving the middle class? Some think so.

"There's a ton of jobs out there. You have to kind of craft it in your community," explains Kerry Mills to PBS. Mills' small business is Engaging Alzheimer's, which assists both suffers and caregivers of the illness to create a better environment for everyone involved. She and others in the field believe that those with an average college education can create their own livelihood as well.

The trend doesn't stop at smaller production items. People are turning their biology and business degrees into service industry positions in areas such as environmental pest control. The options for artisanal entrepreneurship seem to be limited only by the imagination.

It will take time to see if this trend will pick up more broadly, but small business has always been a key driver of job growth in this country. Maybe bringing those artisanal passions to work will be the element the middle class uses to realize their dreams once again.

15 PHOTOS
14 Best Tips That Financial Planners Give to Their Besties
See Gallery
Can Hipsters and the Artisan Economy Save the Middle Class?

For small costs that can quickly add up over time -- like that daily latte habit or weekly apps and music purchases -- consider buying yourself a gift card and load it with a set, budgeted amount at the start of each month. Then go ahead and enjoy those treats until your card runs out. "This makes it easy to keep track of small, daily expenditures," says Natalie Taylor. "Plus, it feels more special and guilt-free when you're paying with a gift card."

If you're just starting to share in financial decisions with a significant other, Stephany Kirkpatrick suggests keeping a "slush fund" bank account into which you each set aside money every month to use for one or two joint expenses. "You can use this to pay for date nights, a vacation or a bigger purchase you want to make together," she suggests. "It helps take away the burden of wondering who is going to pay for certain things -- and it's a great way to get your feet wet when it comes to joint finances."

After a few months, you can graduate to contributing enough to the account to cover larger household bills if you live together, and before you both know it, the concept of combining your finances probably won't be as overwhelming.

"So many people get talked into buying extended warranties on electronics or insurance on their cell phones," says Tom Gilmour, who tells his friends to skip these purchases and use that money to buy term life insurance and disability insurance instead.

David Blaylock agrees. "Life and disability insurance are often overlooked and shouldn't be," he says. "For most of us, the greatest asset we have is our ability to earn income. If we become sick (or die) and we lose that ability, it can be financially devastating. I see clients all the time who have these benefits available to them through their employers and simply haven't signed up for them."

"Jot down all of the things under $30 that are little, feel-good splurges -- and when you need to treat yourself or someone special, pull from this list," Kirkpatrick says. "Whether it's frozen yogurt, an impromptu yoga class, a few copies of recent New York Times best sellers or a nice bottle of wine, $30 can give you the happiness boost you need -- without derailing progress you've made on your financial goals."

"I recommend prenups and postnups," says Brandie Farnam. "If you think about it, people are most inclined to be fair and equitable when things are happy and stable in a relationship -- not when you're fighting for things while parting ways." She notes stay-at-home moms need to protect themselves financially if they opt to leave the workforce for an extended period to raise a family.

Thinking of having a baby and trying to decide whether you can afford for one parent to scale back at work or quit altogether? Farnam tells her friends to completely bank the income they're thinking of dropping (or reducing) for six months -- and rely on the other salary to cover expenses during that period. "This will give you a sense of how it'll feel before you make such a huge, potentially irreversible [career] decision," she says.

Speaking of kids, Gilmour tells all of his new-parent friends to consider setting up a 529 plan -- even if they can't afford to start saving for college themselves. "You can use it to deposit monetary gifts received from grandparents, aunts, uncles and friends."

Taylor tells all of her friends to consider opening a "fun account," so they can splurge without guilt every once in a while. Taylor and her husband used their own fun account to buy a used elliptical machine, pay for a private Pilates trainer and go on a post-maternity wardrobe shopping spree. If it works for your budget, "Dedicate a certain percentage of your income and all money windfalls, like bonuses, to put into this account," Taylor suggests. "10 percent is a great place to start."

You may be able to accomplish the same idea the old-school way too. "One of my friends was able to treat a few of us to a poolside cabana when we were on vacation because she'd been putting small bills into a 'fun jar' for guilt-free splurges just like that," Farnam says.

Don't want to hire an investment adviser or don't have the confidence to manage your own portfolio? "Consider using an all-in-one asset allocation fund to help ensure you always have a diversified asset allocation," says Elizabeth Sklaver. "When buying investments, be sure to check your firm's [no-transaction-fee]/commission-free list, so you're not paying fees you may have avoided. If you are contributing regularly and paying a fee for each trade, it may be worth it to switch firms."

Staying home to raise the kids? If possible, you should still be saving for your golden years, notes Kirkpatrick. "I tell my girlfriends that if they choose to leave their jobs, they should maximize a Spousal IRA or Spousal Roth IRA," she says. "This way, retirement savings is accumulating in their name, in addition to what their spouse saves for the future."

Kirkpatrick says she's amazed by the number of people who skip the simple step of filling out a beneficiary form for their retirement plan or life insurance. "Since a beneficiary form is a substitute for a will, this is a critical document that allows money to transfer to a beneficiary directly -- without the overhead or complexities of probate," she says. This can become especially important, if you aren't married or if you want someone other than your spouse to inherit your money. "Just remember that if something changes -- say, you get married or divorced -- you need to update paperwork everywhere."

Remember to donate some of your hard-earned money. "People who set aside money to support various organizations live richer lives," Blaylock says. Choose an amount you can afford to donate each year -- and consistently give it away. "I hear people say that they will give when they are older," he says. "But I find that those who don't get into the habit of giving early on rarely become charitable."

Yes, your eyes may glaze over when you're reading the fine print. But really understanding what's offered to you can help you take advantage of any "free money," like a 401(k) matching program, health savings account, gym discount or a pretax commuter benefit, says Gilmour. "Also, if you donate to charity," he says, "many large companies are willing to match your gift, which helps your dollar go even further."

Planners say they are shocked by how few people have a budget. Blaylock says that you should start by asking yourself these key questions: How much are your monthly fixed expenses? How much are your variable or flex expenses each month? How much is your net income? Armed with the answers, you can then sit down to map out a monthly budget that can help keep you on track for your financial goals.
of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION
Read Full Story

People are Reading