February 16, 2019

Ep. 301: Does presidential candidate Pete Buttigieg understand our financial lives?

Do you ever feel like our government leaders aren't in touch with the financial lives most Americans live? I feel that way all the time. That's precisely why I jumped at the opportunity to interview presidential candidate Pete Buttigieg . Pete, or Mayor Pete to most, is the mayor of South Bend, Indiana. He grew up in South Bend before attending Harvard and then Oxford as a Rhodes Scholar. Upon graduating, Pete went to work for management consulting giant McKinsey. He eventually found his way back to Indiana, ran for state Treasurer, lost, and then was elected mayor of South Bend. He's a veteran of the War in Afghanistan and is now running to be the democratic nominee for President of The United States. Pete currently lives in South Bend with his husband Chasten and their two rescue dogs Truman and Buddy. I just finished reading his new book Shortest Way Home: One Mayor's Challenge and a Model for America's Future . It's a great read, and I highly recommend it. I was thrilled to welcome him to the program. I hope you enjoy hearing the answers to questions we've all wanted to ask our leaders. Journalist Adam Wren  sits in for the post-interview analysis. TRANSCRIPT OF INTERVIEW Pete the Planner: [00:00:00] This week on the Pete the Planner we answer your money questions but better yet. No we don't. I ask the questions this week of presidential candidate Pete Buttigieg, the mayor of South Bend. He joins me now. Mayor Pete welcome to the program. Pete Buttigieg: [00:00:15] Thank you. Good to be with you. Pete the Planner: [00:00:16] It's good to be you. I've I've listened to you in my ear for the last couple days on your nine hour audio book. So I feel like you're somehow Jiminy Cricket on my shoulder. I have this long-held belief that presidential candidates and our government leaders sometimes don't have a finger on the pulse of what real Americans are going through financially. And so that's why I wanted to have you on today. Some things stuck out in your book, you have an $800 mortgage payment, which to me I think is classic American financial lifestyle. You are a person that has an understated mortgage payment that allows you some financial freedom. And I just wonder of the people who've put their name in the hat so far. How do you feel your story resonates with people from just a personal finance perspective? Pete Buttigieg: [00:01:04] Well I mean one thing I can say is that you know Chasten and I live a pretty middle class lifestyle in a middle class neighborhood in Middle America. You know I certainly am conscious of the situation for people on the coast who have just spiraling housing costs are part of the country the costs have been a little more flat. You still have to work hard to manage that order for things to be affordable in our community. You know one thing I think about a lot is that you know we I was able to refinance my house a few years after purchasing it to take advantage of lower interest rates. But what we've not been able to do is do the same with the student debt that's also a very big part of our our finances because of Chasten's studies that he undertook in order to become qualified as a teacher. Pete the Planner: [00:01:53] I'm curious and you as you look at that and you look at your careers how does that play in your ability to save for financial independence? You obviously have a unique career as a government official. And I'm curious if you stayed on the path you are on from a savings perspective now could you achieve your retirement goals are you banking on bigger paydays to come to achieve that? Pete Buttigieg: [00:02:16] Well it would be a bit of a stretch for us candidly so you know we obviously when you're in public office you're not counting on that being a career, or at least I think you shouldn't. But you know in order for example in my particular case in order to for my Defined Contribution Fund -- defined benefit retirement to kick in at best I would need to be in office for 10 years, which isn't in the cards. I've decided to be a two term mayor. And that's about it. You know I've gone through periods where I had no income at all because I was a full time candidate at that time I was able to use reserve income as a naval officer to supplement that just a little bit but that created some unique challenges. You know we've talked a lot about using debt and financial planning to do smoothing to try to smooth your income over time when you're not independently wealthy if you choose public service your income's about as spiky as it gets sometimes. You know frankly we're contemplating that for the future too if we're looking at a period where once again for some period of time I'm a full time candidate. Pete the Planner: [00:03:24] I'm currently obsessed with financial fragility and I feel like for Americans of every income level it's a real thing and I wonder during that period of time you're running for state treasurer when you were considering am I going to finance my life on credit cards. Was it the most financial stress you've ever personally been in? And how do you think. I'm not trying to get you to compare it Pete to what Americans financial fragility. I'm just curious is dead like how you think of the two the worse you've ever been and then what it feels like to have one hundred and fifty thousand dollars in medical bills? Pete Buttigieg: [00:04:01] Yeah I mean I don't want to compare my situation to others because everyone's a little bit different but I can certainly relate to the situation of seeing that debt grow faster than your cash is that what you're trying to live a very reasonable lifestyle and asking yourself what you would do if your plans don't pan out. You know I had saved enough that that was able to get me through the first part of my period as a full time candidate but eventually I had to rely on credit card debt as well. And then once I had happily won an election and had this job I was able to chip away at that bring that back down to where I could start saving again. But you know the real thing and fragility is a good term. The real thing to worry about is if you get a curve ball if I had had not expected illness if something made it impossible for me to continue seeking or to take office if some unexpected financial shock had come my way. You know so many Americans are living within just one or two mishaps of a financial hole opening they would not be able to dig themselves out. And you know we need to start making policies that are more sensitive to that at a more commonsensical about creating the financial resilience that would allow ordinary Americans to weather those shocks more readily. Pete the Planner: [00:05:13] One of the more poignant sections of your new book Shortest Way Home: One Mayors Challenge and a Model for America's Future is when you talked about the hard waste collection jobs that the city of South Bend had to eliminate because of technological advances. Now those folks were offered other positions within the city. My question, Pete, is in the next decade or so how can Americans be prepared for these technical technological efficiencies eliminating these old blue collar jobs and what are people to do? Pete Buttigieg: [00:05:44] Well the biggest thing we have to realize is that it's increasingly going to be true especially for people in my generation that we may find ourselves changing not only jobs or careers more often than our parents change jobs or even employers. This is a trend that's only going to accelerate and frankly it's not confined to blue collar positions either. You know there are a number of positions that benefit increasingly perhaps even accounting and law that are subject to automation. Now the good news is overall macro economically it looks like many of these technological trends will create as many jobs as they do away with. The question is how can any one individual be ready to succeed in that environment. And we as a country I think need to do a much better job of equipping people with the skills they're going to work across different disciplines. You know if you're on a factory floor right now as manufacturing becomes more and more advanced the part of your job that matter most and the parts of your job that are going to serve you well even in a different career are things like problem solving critical thinking interpersonal interaction upward and lateral management they're not necessarily individual technical skills. You've got to teach those too but those are going to be changing at a faster and faster pace. Pete the Planner: [00:06:56] Now you grew up in a college town in South Bend Your parents were professors at Notre Dame. You went to Harvard You're a Rhodes scholar but I wonder in today's environment in America is college oversold to too many high school students. Because frankly in the work that we do here in my office Pete we're picking up the pieces of broken dreams of education that are too expensive. Your thoughts on that. Pete Buttigieg: [00:07:18] Well it's not for everybody and you know many of the most intelligent and capable people I worked with in the city workforce are not necessarily college graduates. So I do think in our in our haste to make sure we were a country where everybody wants to and ought to go to college has the opportunity. We may have taken our eye off the ball of making sure that we also show a lot of regard for education that's outside of the university system -- technical education and the kind of training associated with getting ready to go into the workforce more quickly. That being said you know college is just about creating workers. It's also about helping us grow as citizens. And one thing we're focusing on in South Bend right now is lifelong learning that accounts for everything from all the job training to college to things that currently aren't officially considered education but probably ought to like the skills you might learn from a relative around how to do a particular process in the home or language skills and find a way to credential all of those something like a sort of life transcript will capture all of the unique skills and capabilities that individuals get because in this changing world it's more and more difficult to predict in advance which of those skills will be the most relevant. Pete the Planner: [00:08:33] Now your husband Chasten tells me that in terms of sharing a household budget you're a pretty good partner that occasionally you spend too much money on books but you don't give him too much trouble on itemizing on his Target trips. I wonder in that 30 seconds we have left. What's it been like as as a man combining your finances with another person. I mean that's what Americans deal with every day in relationships. Pete Buttigieg: [00:08:55] I think for any couple it's really challenging and the most important thing is communication. You know what really causes stress and in any marriage when it comes to finances and surprise if you know something's coming or you have a view about a plan or something you'd like to do and then you can communicate about it prepare for it. It's when. Sometimes maybe out of discomfort one partner hesitates to share with another when when bills are getting out of hand or where there's a big expense coming up but you're always better off even if it's uncomfortable bringing it up sitting down and talking about it than letting it bite you later and cause of surprise. Pete the Planner: [00:09:32] Mayor Pete Buttigieg presidential candidate for the United States of America. And the person who's been my ear on my trip home from Orlando this week listening to his audio book. Safe travels on your road. Mayor, thanks so much for joining us on the program. Pete Buttigieg: [00:09:45] Sure thing. Pleasure to be with you.

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