The Secret Shame of Middle-Class Americans
April 19, 2016 1:59 PM   Subscribe

Nearly half of Americans would have trouble finding $400 to pay for an emergency. I’m one of them. An essay on "Financial impotence" from Neal Gabler in The Atlantic, part of a longer project on "Financial shame": True Money Stories
posted by chavenet (190 comments total) 67 users marked this as a favorite
 
At least the author is aware that he chose for himself the life he is leading. Most people in his situation are not writers living in New York with kids in the Ivies and, and no one let them choose their station.

I'm not unsympathetic, but he's writing for the Atlantic, and his daughters are in Ivy League schools and he has a life millions would kill for, except he doesn't have a lot of spare cash lying around. I mean, he has a Wikipedia page. He seems an odd choice for the person to tell this story. Except of course a more likely example person would never be writing an article for the Atlantic.
posted by Naberius at 2:08 PM on April 19, 2016 [36 favorites]


My wife just lost her job, and I'm not sure how/if I can pay the rent this month. So yeah, I'm right in that category. Only I'm not ashamed, I'm angry.
posted by sotonohito at 2:15 PM on April 19, 2016 [55 favorites]


I'll note that for all the hate reddit gets here, one of the really good things that it's done is to put /r/personalfinance on the default sub list, which is doing *something* to teach the basics of financial literacy to the general public. It's something that I'd like to see covered in middle/high school classes, but I like to think that the periodic "having an emergency fund saved me" stories that make it to the front page of reddit on a fairly regular basis is helping improve people's financial awareness. It doesn't help with income inequality and declining incomes, of course, but generally people seeking advice there get good lessons in how to make the best of their situation.
posted by Candleman at 2:15 PM on April 19, 2016 [32 favorites]


I read this article earlier today and it made me incredibly sad.

You can say whatever you want about the author's situation. I respect his honesty. The fact is that our economic system creates the possibility space for the citizens of our country, and the current system is designed to create insecurity and dependance at every economic level so we all just keep desperately treading water instead of having dreams.
posted by selfnoise at 2:17 PM on April 19, 2016 [22 favorites]


He seems an odd choice for the person to tell this story.

But many of the sorts of people who have the wherewithal to actually do something about the underlying problems are more likely to be swayed by someone like him telling the story, because he *seems* like one of them.
posted by sparklemotion at 2:20 PM on April 19, 2016 [16 favorites]


He seems an odd choice for the person to tell this story. Except of course a more likely example person would never be writing an article for the Atlantic.

I think he's actually a pretty good person to tell this story. Consider:

1. If a poor person told this story, they would be dismissed by rich people because rich people believe the poors are dumb and bad things that happen to them are their fault.

2. If a poor person told this story, he or she would be a target of immediate media hatred in a way that is unlikely to happen to someone from the upper middle class. A richer person can withstand a certain amount of this.

3. And most importantly - to me, the underlying purpose of the article is to illustrate the even a guy like him isn't making it, and therefore this is a collective problem.

Sure, we can say "well, if you weren't a writer with books out and a TV career, if you'd been a banker instead, you'd be fine". But I think that's dumb. A generation ago, we would say "well, if you weren't a self-employed performance artist - why not be a professional writer and dabble in television!" A generation from now, we'll probably say "well, if you weren't a pediatrician - if only you'd been a hedge fund manager, then you'd be doing fine!" That is, we'll be saying that if we don't stop the push to assume that it's perfectly okay that people fail to make a living while working full time.
posted by Frowner at 2:22 PM on April 19, 2016 [172 favorites]


> Part of the reason credit began to surge in the ’80s and ’90s is that it was available in a way it had never been available to previous generations.

I went to university during the mid-'90s and during frosh week you couldn't go ten steps across campus without someone throwing condoms or credit cards at you (sometimes both at the same time)*. The credit card booths all had photos of student-age kids enjoying shit they presumably bought on credit, shit you could be enjoying right now...if you weren't some sort of chump who didn't enjoy instant gratification, that is. I knew a lot of people when we were all in our 20s who apparently had no qualms about going out on the town or on vacation or to the mall and putting everything on their card and...worrying about it later, I guess?

My parents and I didn't talk much about financial matters, and I'm far from the most financially literate person out there, but the one thing they did drill into me was that credit cards were not to be abused and that the balance should be paid off every month, and for that I thank them.

* I wound up with dozens of the former and none of the latter and got the same amount of usage out of both
posted by The Card Cheat at 2:26 PM on April 19, 2016 [28 favorites]


He seems an odd choice for the person to tell this story.

That's exactly the point, that part of what needs to stop happening is people inflating their lifestyle via debt, that we need to have more honest dialog about the state of people's finances. It specifically addresses the stigma involved with being middle class and in debt. You're illustrating his point that there's many people that we look at in day to day life and assume that they have it made when they're one paycheck away from hunger. I may have more sympathy for someone from a disadvantaged background that's in poor financial shape due to racism etc. than someone that chooses to live in New York as an author, but I'm still sympathetic and think that both problems need to get fixed.
posted by Candleman at 2:30 PM on April 19, 2016 [13 favorites]


1. If a poor person told this story, they would be dismissed by rich people because rich people believe the poors are dumb and bad things that happen to them are their fault.

2. If a poor person told this story, he or she would be a target of immediate media hatred in a way that is unlikely to happen to someone from the upper middle class. A richer person can withstand a certain amount of this.


"If?"
posted by tonycpsu at 2:31 PM on April 19, 2016 [11 favorites]


At least the author is aware that he chose for himself the life he is leading. Most people in his situation are not writers living in New York with kids in the Ivies and, and no one let them choose their station.

I think he's a freelancer with variable income, actually. Just like many people on MetaFilter (including me) and a rapidly increasing segment of the workforce. He doesn't have a salaried job, and, believe me, pubs like the Atlantic don't pay much at all. I know a pretty prominent author (more name recognition than this fellow) who also lives "paycheck to paycheck." He's a freelancer and his wife is and adjunct.

So the writer is living by definition a financially precarious position.

He does present as middle class, though.
posted by My Dad at 2:31 PM on April 19, 2016 [20 favorites]


Sooner or later, we're bound to get an article by just the right most perfect person about how they're not making it and everyone will go "Oh I see it now. The game really is rigged." In the meantime, we'll continue to blame everyone who bothers speaking up for living their life the wrong way.
posted by zachlipton at 2:32 PM on April 19, 2016 [182 favorites]


Frowner's got a good point, and I honestly think we should publicly advocate even for the openly undeserving. In every environment I've seen, there are broad classes of undeserving worker who either don't deserve to live fatcat stable lives or deserve their misfortune.

Some folks here were talking about fully automated luxury communism, and while that's a delightful phrase, I'd like to focus a little closer to the present and say that even someone who's lazy and kind of an asshole should be able to get by all right.
posted by The Gaffer at 2:32 PM on April 19, 2016 [17 favorites]


this is not to imply or suggest that anyone deserves to be living precariously from pay check to pay check. I don't know what anyone's personal situation is.

But I have realized that years of living on a low and precarious income (income of less than $20k for two people) had trained me to live like you always might need $400 for an emergency. We've definitely had some privileges that allowed us to do so (including a period of subsidized rent from relatives). But we've also forgone a lot (like vacations, food out, new clothes) to keep our nest egg healthy/existing. Whereas I have friends who have incomes 5-10 times that of my SO and I who have been short or needed to borrow money for an unplanned expense.

It does make me resentful, especially when I see them doing something I have never been able to (like take a Carribbean vacation or any vacation that doesn't involve tents) - and particularly family members who would never listen to us about money, because we're clearly no good at making it. Which is true - but what we lack in making money, we have in spending it carefully.
posted by jb at 2:34 PM on April 19, 2016 [30 favorites]


I do agree that what this author is describing is hardly novel for many, many people, even supposedly middle class people, who would never normally have the Atlantic as a forum. And grinding poverty sucks. Man does it suck. It sucks so bad it's bad for your health.

On the other hand, if you don't have any money in the bank and you're driving an expensive car that's 10+ years old, and live in a house you paid top dollar for in good times and you're now underwater on your mortgage, and you lost that nice employer-sponsored health plan you were on, and you can't afford to buy food or heating oil, the fact that you supposedly have it better than someone else because you write for the Atlantic is sort of cold comfort. Poverty kills all of us.
posted by My Dad at 2:37 PM on April 19, 2016 [16 favorites]


1. If a poor person told this story, they would be dismissed by rich people because rich people believe the poors are dumb and bad things that happen to them are their fault.

Let's be clear, he IS a poor person.
posted by pwnguin at 2:38 PM on April 19, 2016 [14 favorites]


But I have realized that years of living on a low and precarious income (income of less than $20k for two people) had trained me to live like you always might need $400 for an emergency.

I totally agree. Lean times forced us to structure our life in such a way that we have a very minimal cost of living now. It has to be because my income can fluctuate so much from year to year. But in the good years I am able to save.
posted by My Dad at 2:38 PM on April 19, 2016 [1 favorite]


> You're illustrating his point that there's many people that we look at in day to day life and assume that they have it made when they're one paycheck away from hunger.

It does - and I know it shouldn't - kind of blow my mind that I have easy access to more cash - like, a *lot* more - than this guy, who put two kids through Ivy League schools (with help from his parents, but still) and has a much more "successful" career than I do. I look around where I live (Toronto) and sometimes wonder how many of the seemingly prosperous people who surround me are living similarly precarious lives.
posted by The Card Cheat at 2:38 PM on April 19, 2016 [9 favorites]


Oh MeFi and your weird unending hatred of writers. Is the weird notion that writers might have money related to that hate? Writers make fuck all.
posted by Artw at 2:38 PM on April 19, 2016 [44 favorites]


He seems an odd choice for the person to tell this story. Except of course a more likely example person would never be writing an article for the Atlantic.

Also, on thinking about this: it strikes me that there are different times for different arguments.

If we're saying "full automation luxury communism", or even mincome or social security or national health care, the whole point is that it should be available to everyone, regardless of ability to pay. And the whole political process of pushing for it is to say "this is something that benefits everyone, and that solves a problem that anyone can face; even if you are the child of a Trump or a venture capitalist from Stanford, if you are broke to the wide you can still get food stamps".

If we're saying "hey, the way to solve the problem of, say, medical insecurity is to make people jump through a ton of hoops and fill out complicated paperwork which must be filed in person somewhere that is a long bus journey from the center of town and can only be filed during business hours, but once you've done the paperwork, everything is absolutely free forever", that is the type of argument where I think it really pays to say "no wait, what you mean is that people with the transportation, know-how, free time and experience with bureaucracy benefit from this program - meaning that the people who need it most will not, and this is a biased program that serves only to dish out state funds to the rich".

I think that if there's anything which derails mincome/luxury communism/etc, it's the whole means-test argument, even when that argument is promulgated from the left.
posted by Frowner at 2:40 PM on April 19, 2016 [15 favorites]


 I honestly think we should publicly advocate even for the openly undeserving.

"I eats as much as a deservin' man. And I drinks - oh, a lot more."

He did mention how wages have been flat and other structural conditions.
posted by the man of twists and turns at 2:40 PM on April 19, 2016 [3 favorites]


I've just recently gotten to the point where I have that sort of cash (more, actually) on hand, and that's because I a) got scared enough by numerous reports of people my age (some even younger!) who lost jobs and found out that they'd aged out of the job market, b) witnessed some people close to me who went on disability and are in a very precarious position financially, and c) took advantage of some ways of saving where I never or rarely actually have to make the decision to save, including maxing out matching contributions to my employer's 401k plan and deliberately overpaying income taxes so I get a yearly refund that I can funnel at least part of into savings. And even then, I try not to project too much too far into the future. Before that, I'd live paycheck to paycheck and occasionally chip away at retirement savings (with the accompanying tax penalty) for emergencies.
posted by Halloween Jack at 2:43 PM on April 19, 2016 [4 favorites]


Sooner or later, we're bound to get an article by just the right most perfect person about how they're not making it and everyone will go "Oh I see it now. The game really is rigged." In the meantime, we'll continue to blame everyone who bothers speaking up for living their life the wrong way.

The temptation to think "Oh he's in trouble because of X" is really strong, because it allows us to think "Oh, I don't do X, so I won't be in trouble."

It even seems to work if we ARE in trouble--reading about someone who's in the same shape as us and admitting that it's a perilous way to live, the desire to find ways that our choices are morally superior, and embrace that as though it will protect us, is powerfully seductive.

Denial can be a real hard thing to shake. I mean, even though I am describing it doesn't mean I don't do it, doesn't mean I didn't do it when I read this story ("He cashed in his 401K to pay for a wedding!"), and, truth be told, don't somehow still believe deep down that I'm different in some important way that will protect me financially.
posted by layceepee at 2:43 PM on April 19, 2016 [19 favorites]


Another thing about this is that every subsequent generation seems to be living off the fumes of the Boomers' savings (illustrated here by the fact that the author had to wipe out his parents' savings along with his own to put his daughters through college)...once the Boomer Bank goes bust it's really gonna be fun times.
posted by The Card Cheat at 2:44 PM on April 19, 2016 [49 favorites]


The thing is, you can always find a way to blame the individual. This writer even makes it easy by telling us that, yeah, it's his fault. But if 47% of the population is his situation (or worse) then regardless of whether or not it's their "fault", we have a problem. Maybe it's a problem that would be solved by educating people so that they don't make bad financial choices or maybe it's something else, but even if you take the victim-blaming route of just saying he's a moron, he's in good company. And that should worry you.
posted by It's Never Lurgi at 2:45 PM on April 19, 2016 [14 favorites]


even someone who's lazy and kind of an asshole should be able to get by all right

If this keeps my lazy, kind-of-asshole friends from asking for free couch housing, I'm in
posted by thelonius at 2:46 PM on April 19, 2016 [3 favorites]


I totally agree. Lean times forced us to structure our life in such a way that we have a very minimal cost of living now. It has to be because my income can fluctuate so much from year to year. But in the good years I am able to save.

Some people never get good years.
posted by Celsius1414 at 2:48 PM on April 19, 2016 [15 favorites]


I'm old enough to have an aarp card. I can't get a job in IT for love or money as an old. Especially as a female old. We make do on my husband's salary, but we're carrying easily 20k in credit card debt from medical stuff mostly. Even though we pay a policy premium of 11k a year, our expenses were another 16k on top of what we thought was covered. Because insurance always finds a way not to pay.

On the 11th of this month, a hail storm destroyed my brand new, class 4, impact resistant roof. We just paid the 8k deductible less than a year ago, and now we have to pay it again. The interior of my house was devastated by the storm, and even though insurance will pay for reconstruction, there will still be thousands of dollars in unexpected and uncovered expenses. My husband's car was destroyed, but because it was a 16 year old truck, we didn't have comprehensive on it, so now we have to come up with a way to fit a car payment into our thin margin. I'm almost retirement age, and I still have a very young teenager that I have no idea how I'm going to put through school if he doesn't get scholarships.

This is what it's like to be middle class in America. Enough money that every once in a while you can pretend it's all going to be ok. But it isn't. I don't know what to do. I don't know what any of us are going to do.
posted by SecretAgentSockpuppet at 2:49 PM on April 19, 2016 [109 favorites]


Even though I supposedly know better (ha) I really related to some of his struggles around keeping his kids on par with the Jones's kids. We've made some similar decisions, especially around premium daycare and a few extra-curriculars.

We're also dipping into savings for a stupid stupid stupid vacation this year because it's the "last family vacation" with my parents, aged 70 & 69. I know this is a really poor financial decision and it's not a vacation I would take and I should have boundaries about it and yet here we are doing it, because money is love or something.

In the spirit of openness I'm Gen-X and I think where some generations are suckers for status spending or whatever, I am just a sucker for experience spending. My husband and I have been fortunate in many many ways (may it continue) but that's my weak underbelly.
posted by warriorqueen at 2:51 PM on April 19, 2016 [12 favorites]


>I totally agree. Lean times forced us to structure our life in such a way that we have a very minimal cost of living now. It has to be because my income can fluctuate so much from year to year. But in the good years I am able to save.

Some people never get good years.


Yeah. The last 18 months have been totally surprising for me. And I'm always wondering if next month is the month I meet my doom.
posted by My Dad at 2:52 PM on April 19, 2016 [2 favorites]


In a couple of months I will have serious disposable income for the first time since I moved out of my parent's house. I'm 49. Long fucking road out of a deep debt valley.
posted by srboisvert at 2:59 PM on April 19, 2016 [14 favorites]


Let's be clear, he IS a poor person.

The author is "poor," in the sense that that one homeless guy was x billion dollars richer than Trump that one time. Or in the sense that I am richer than Kanye West right now. But this is really more a question of class, and the fact that while his particular generation of the family is in dire straights, his parents were able to save, and his children seem like they are on their way to lucrative careers (well, at least the doctor, assuming she doesn't go family medicine).

My google-fu is failing me, but I swear I read an article linked from the blue about one thing that separates lower middle-class white families from lower middle-class families of color is the fact that the white families were more likely to have people in their extended families who could help in a true pinch. That same disparity continues with other advantages like access to non-usurious credit, having parents who are educated enough to not want to risk sending their kids to a "bad" school, and having grandparents who can foot your tuition bill.

This is not to say that this guy doesn't deserve sympathy, and we shouldn't do what we can to keep any families from ending up where he and his wife are. But I do think that the solution for people like him is better funding for financial literacy education so that he could have benefited from some of the lessons that he's just starting to understand now throughout his life.

Learning how to balance a checkbook, or about abstract ideas like the dangers of lifestyle inflation, aren't necessarily going to be enough to help folks who are embedded in poverty, and who couldn't have gotten the credit needed for the lifestyle inflation in the first place. But if we (as a society) can solve a simple problem, maybe we'll be better placed for success at tackling the bigger ones.
posted by sparklemotion at 2:59 PM on April 19, 2016 [16 favorites]


The title states that the middle class is in this bad situation, and yet the article talks about people responding to the survey. Nowhere, though, does it state that the survey directed solely at middle class people. Are all those included in the survey middle class or not?
posted by Postroad at 3:00 PM on April 19, 2016


As a snake person working for a barely-above-minimum-wage I can come up with $400 for "emergencies", but if it starts to get past $1000 dollars... that really would hurt. Because student loans. Because my job is insecure. Because I rely on a medical device that's starting to approach the end of its shelf life. But, hey! I live in a renting situation where I'm paying way below market, so I'm one of the lucky ones. I guess.
posted by lineofsight at 3:00 PM on April 19, 2016 [3 favorites]


part of what needs to stop happening is people inflating their lifestyle via debt

I would suggest, though, that much of this isn't so much people inflating their lifestyle via debt as that certain important fixed costs--housing and education, specifically--have increased vastly over the last 25 years and now account for a much higher percentage of people's incomes and leave much less room for discretionary spending or saving. People are not so much 'inflating" their lives as trying to maintain what they're used to.

And since HCOL areas also tend to have the most jobs, it's hard to uproot yourself to go to an area with a lower cost of living while maintaining the same income level. The author admits that staying in NYC wasn't a great idea, but was able to move his career to the comparatively low-cost Easthampton. That's not feasible for many folks.
posted by The Elusive Architeuthis at 3:00 PM on April 19, 2016 [43 favorites]


The title states that the middle class is in this bad situation, and yet the article talks about people responding to the survey. Nowhere, though, does it state that the survey directed solely at middle class people. Are all those included in the survey middle class or not?

I think that the Economic Well-Being of U.S. Households, 2014 Report [pdf]is the survey being alluded to. The relevant portion starts on page 17, and the chart on page 18 breaks down the $400 question by household income.

The 53%/47% split of people who could come up with $400 in cash, or put it on a credit card that they would pay off that month, would appear to be an aggregate across respondents.
posted by sparklemotion at 3:10 PM on April 19, 2016 [5 favorites]


CTRL+F "unions"

Zero results.
posted by The Card Cheat at 3:12 PM on April 19, 2016 [29 favorites]


there was a survey of mefi users a while back. did it include financial questions?
posted by andrewcooke at 3:15 PM on April 19, 2016


I went to university during the mid-'90s and during frosh week you couldn't go ten steps across campus without someone throwing condoms or credit cards at you (sometimes both at the same time)*. The credit card booths all had photos of student-age kids enjoying shit they presumably bought on credit, shit you could be enjoying right now...if you weren't some sort of chump who didn't enjoy instant gratification, that is. I knew a lot of people when we were all in our 20s who apparently had no qualms about going out on the town or on vacation or to the mall and putting everything on their card and...worrying about it later, I guess?

By the time I hit undergrad they were giving out free Subway vouchers if you signed up, so everybody I knew had fake info memorized to "sign up" with so they'd give us free sandwiches.
posted by Pope Guilty at 3:20 PM on April 19, 2016 [3 favorites]


"It is ironic that as financial products have become increasingly sophisticated, theoretically giving individuals more options to smooth out the bumps in their lives, something like the opposite seems to have happened, at least for many. Indeed, Annamaria Lusardi and her colleagues found that, in general, the more sophisticated a country’s credit and financial markets, the worse the problem of financial insecurity for its citizens. Why? Lusardi argues that as the financial world has grown more complex, our knowledge of finances has not kept pace. Basically, a good many Americans are “financially illiterate,” and this illiteracy correlates highly with financial distress. "

It's not ironic at all. It's a feature, not a bug. Financial literacy helps at the margins but it doesn't address the various forms of predation that cannot be successfully warded off just by knowing what compound interest it.
posted by praemunire at 3:26 PM on April 19, 2016 [23 favorites]


As a snake person

As a snake person? Do you work with snakes or is this a term I'm not familiar with?
posted by agregoli at 3:28 PM on April 19, 2016 [5 favorites]


As a snake person? Do you work with snakes or is this a term I'm not familiar with?

Millennial.
posted by Pope Guilty at 3:29 PM on April 19, 2016 [7 favorites]


I would suggest, though, that much of this isn't so much people inflating their lifestyle via debt as that certain important fixed costs--housing and education, specifically--have increased vastly over the last 25 years and now account for a much higher percentage of people's incomes and leave much less room for discretionary spending or saving. People are not so much 'inflating" their lives as trying to maintain what they're used to.

These issues are not unrelated. People with easy access to very expensive credit living beyond their means drive up the cost living by spending money they don't have. Housing and Education costs have gone up in part because they can due to credit being available to maintain demand.
posted by srboisvert at 3:39 PM on April 19, 2016 [10 favorites]


I graduated college in 1989 and I was over 100 pre-approved credit card offers in my last semester before I quit counting them. It was crazy - every senior in the house was getting at least one in the mail almost every day.

I have a kid graduating from college in 3 weeks, and another 2 years behind him. I really worry about the economy they will be living in. I don't think its nearly as strong as the official government stats make it appear.
posted by COD at 3:42 PM on April 19, 2016 [4 favorites]


Let's be clear, he IS a poor person.

He states that he has typically had a solid middle or upper middle class income. He owns a home. He sent his children to private school and then to college without financial aid/loans. His parents were able to step in and help in a major way financially.

We can call him poor in the sense that sometimes he has been short on money and debt is an issue for him. But I don't think that refusing to make a distinction between this guy and someone in generational poverty is really productive in this situation.

His story brings up a pretty distinct set of issues to talk about--financial literacy, changing expectations of middle class lifestyles, perilousness of middle class failures, stagnant and falling professional wages.
posted by geegollygosh at 3:49 PM on April 19, 2016 [29 favorites]


I am an old guy. I had the best of the world which America had to offer and have lived debt free. Just sold my house to downsize. Began looking about for buying or renting apt., condo, co op, etc and was amazed at the going prices. I realize what the young now face in our nation and I am saddened by it, for I have a young daughter, a recent college grad, and a son, living and working overseas who plans to return to the U.S. How sad that so many have given so much and now have so little either for themselves or for their children. Can it be fixed, brought back to what had been? What would it take to make this happen?
posted by Postroad at 3:56 PM on April 19, 2016 [16 favorites]


My mom was a bank teller and my dad was a (private sector union) pipefitter, and the lifestyle they were able to afford and the opportunities they were able to pass along to their children...well, those days are gone.
posted by The Card Cheat at 4:03 PM on April 19, 2016 [21 favorites]


A thoughtful read, thank you for sharing.

Some of my friends, who vote for conservative parties, refuse to accept that they have already entered this precarious position. They grew up in the houses of their middle-class parents with tennis courts and pools, went to expensive schools, got their degrees at good colleges, went off into the workforce. Vote for conservatives and you have a good life. That is how they were raised.

But it's thirty years later and now their kids are going to less-expensive or state-run schools, unless the originally affluent parents are happy to chip in from their steadily diminishing retirement savings, ravaged by stock market and land speculation by massive players who can't even see these mom-and-pop investors. They don't own their houses or have a mortgage, they're long-term renters in smaller places. University is getting more expensive (although it's still deferred in Australia) and their kids are going to come out with a large debt that will have to be repaid pretty quickly. The main way that many of these folk are getting by is by drawing down on their extended family, who used to be affluent.

And yet, they still can't see this is a steady erosion.

I don't make a big deal about it. People live their lives, I live mine, but, occasionally, when someone lectures me a little too much about my "unrealistic" non-conservative politics and I'm a little tired, I ask who is going to be the safety net for their kids? If my generation are drawing down a generation back, then there will be less to pass on at each step. Eventually there will be nothing and that generation will be impoverished.

But that's why we should have safety nets for a stable society. We keep running this experiment and it is cheaper to invest in people to keep them inside the net than it is to try and deal with the issues of a growing underclass. Safety nets are for everyone because bad things can happen to everyone and sometimes you inherit a problem that you didn't create. The problems that your parents and grandparents had should not eat your future.

And yet the very people it is happening to often seem to be barely able to comprehend that this is real. I suspect it's because facing the truth would be too terribly awful and that it borders on being a sanity-maintaining decision.
posted by nfalkner at 4:05 PM on April 19, 2016 [31 favorites]


I am not in the no-$400-rainy-day-fund club -- I have a small nest egg and some minor backup plans -- but I am in no way free and clear of these kinds of worries.

I've been with my current company for 15 years, and incremental salary increases make me less attractive in some ways than younger employees straight out of college. "Well, delfin, don't you have 15 years of experience and skills that they don't have?" I do, but assuming that bean counters upstairs will look at that and disregard the base cost is a very dangerous assumption these days. Do I have a backup plan for employment? No, because I like my seniority and I like my job and I like clinging to it like a barnacle to a hull. If the bean counters win, I have more than a month's grace but I would need something new and substantial damned fast.

I have a relative who's having some rough health issues, and while he's Medicared up to the point where medical bills aren't usually killers, they do add up. And so do everyday bills. And so do unexpected things that crop up like an aging car or a forgotten bill or an expense that I'd rather pay for him than watch him have to pay. Do these chip away at savings? Yup.

I talked with a financial advisor today, who's been pestering everyone at our company about their amazing investment options. I think I horrified him. I told him that not only do I not have an investment strategy for retirement, but that I had no interest in one right now because I'm watching what I have in the bank drip away slowly and had to make sure I'd still be employed before investing more. Do I understand compounded interest? Do I understand the need to start saving for retirement before retirement age? Damn straight. But it's just not something I can do right now. And therefore, I _am_ in the no-$400-rainy-day-fund-club on layaway; before too long, the bill comes due. I'm kinda hoping that "before too long" is more than 10 years out but I just don't know.

My conservative mother sometimes shakes her head as to how she raised such a liberal son, concerned with the government programs that make up a rudimentary safety net. I reply that I, or she, or just about anyone else could NEED that net at any time with little or no warning. For now, she doesn't get it. She will.
posted by delfin at 4:08 PM on April 19, 2016 [10 favorites]


> I've been with my current company for 15 years, and incremental salary increases make me less attractive in some ways than younger employees straight out of college.

A relative of mine works for a company that just posted a $1.8 billion (Canadian) profit for the first fiscal quarter of 2016, and yet she may very well be laid off soon in favour of her younger co-workers who are paid less. Those CEO bonuses don't pay themselves, you know.
posted by The Card Cheat at 4:14 PM on April 19, 2016 [24 favorites]


The Elusive Architheusis: I would suggest, though, that much of this isn't so much people inflating their lifestyle via debt as that certain important fixed costs--housing and education, specifically--have increased vastly over the last 25 years and now account for a much higher percentage of people's incomes and leave much less room for discretionary spending or saving. People are not so much 'inflating" their lives as trying to maintain what they're used to.

That is exactly what Elizabeth Warren was getting at in The Two Income Trap. Housing, education, and health care now eat up the lion's share of the middle-class budget - and Warren notes that these are fixed expenses - it is harder to cut back on them than it is to cut back on things like food and clothing. Brown-bagging lunch, eating less meat, buying second-hand clothing, etc. can net you some savings, but so much is going to housing, education/child care, and health care, that it's hard for middle-class families to save for emergencies. And this is more or less what happened with the author of this article.
posted by Rosie M. Banks at 4:14 PM on April 19, 2016 [41 favorites]


We just paid the 8k deductible less than a year ago, and now we have to pay it again.

You have an 8k deductible? I've heard of not being able to make two roof claims in a short period, but usually a home deductible is closer to 1k. I'm concerned you are being taken advantage of by the roofers.
posted by michaelh at 4:17 PM on April 19, 2016 [3 favorites]


My wife and I are 31-year-old Americans and have about $30,000 saved up, working/living a fairly "middle class" lifestyle. Oh, right, except we had to move to a different country, because that way it's possible to get housing that costs less than a third of your income, and you can go to the doctor when you need to (or even just when you want to) without having to worry about paying your rent that month. The system is rigged — just to cover the price difference in housing and healthcare prices, we'd have to make about double what we do now if we moved back to America (leaving aside things like being able to use good public transit at all).

Good thing we're not particularly planning on having kids, because I have no idea how people afford it nowadays.
posted by DoctorFedora at 4:18 PM on April 19, 2016 [13 favorites]


One thing about saving money that stuck with me - and it may have be from AskMe, not sure - is that having money put aside is a sanity preserver. When bumps come along, you don't have to freak out about how you're going to make it through. Constantly having to freak out takes a long-term toll on you.

Some people use credit as their short-term life preservers. Access to credit is a form of social capital that middle class people are more likely to have. If you don't save, or can't save, and you don't have those extra bits of social capital, the pressure that finance places on your mental (and physical) health can be immense. The pressure can be pretty big even if you do have some of that capital.
posted by clawsoon at 4:20 PM on April 19, 2016 [7 favorites]


The Elusive Architeuthis: "And since HCOL areas also tend to have the most jobs, it's hard to uproot yourself to go to an area with a lower cost of living while maintaining the same income level"

This is one of the key reasons why centralization of the economy in a few metropolitan areas has been such a disaster for the middle class. It's much better for people if there are jobs available in lots of cities, so that there's much less demand driving up prices. This Atlantic article from last November really opened my eyes to these issues:

But the language currently used to describe inequality doesn’t capture the way it is manifesting geographically. Growing inequality between and among regions and metro areas is obvious. But it is almost completely absent from the current political conversation. This absence would have been unfathomable to earlier generations of Americans; for most of this country’s history, equalizing opportunity among different parts of the country was at the center of politics. The resulting policies led to the greatest mass prosperity in human history. Yet somehow, about 30 years ago, America forgot its own history.
posted by crazy with stars at 4:25 PM on April 19, 2016 [23 favorites]


perilousness of middle class failures,

Oops, I meant to say 'middle class families' in my comment above, not 'failures'. I'm on my phone. Wouldn't usually take a comment to correct my typo, but it seems like a super mean-spirited comment as written now!
posted by geegollygosh at 4:25 PM on April 19, 2016 [1 favorite]


> Access to credit is a form of social capital that middle class people are more likely to have.

I said upthread that 20 years ago companies were throwing credit cards at me, but nothing has really changed; I get offers in the mail all the time, if I'm dumb enough to answer my phone when my credit card company calls they pitch me totally unnecessary raises to my credit limit, and the last time I went to the bank in person the teller casually asked me if I was planning on buying a house because low interest rates and easy credit blah blah blah, as though it was an impulse purchase like a pack of gum. I get it, you want me to go into debt.
posted by The Card Cheat at 4:29 PM on April 19, 2016 [1 favorite]


There's also the entire narrative around securitizing mortgages in the 2000's to give lower-income Americans the ability to get a home loan—essentially expanding credit to lower income folks.

I am not sure how accurate that narrative is, though.
posted by My Dad at 4:36 PM on April 19, 2016


I think the focus on individual financial choices is misplaced. It is impossible for most people to live within their means given the cost of rent. The number of rentals in cities that are less than 30% the median wage is usually laughably few. I am in the 75th income percentile and live in a city with millions of people and good public transit. A quick Craigslist search gives me just 174 affordable rentals within a 2 hour one-way commute of my work. And these are not nice places - you're the 7th person in a house, an 8' x 8' room with a blanket for a door, places without kitchens, furnished places where you can't even move the weird pictures they have on the wall, and airBnBs. There is one available rental affordable to someone in the 50th income percentile - and it's a living room in a 2 bedroom apartment.

Relocating to a place with cheaper rent is often a bad idea because places with cheap rent generally have no jobs (or at least no good jobs); the median gross rent as a percentage of household income in Flint, MI is nearly 50%.

For most people, there is nowhere in their city to "downsize" to. Seriously, if everyone decided tomorrow to live within their means, there isn't the housing to accommodate it.

Plus, for many, relocating to somewhere more affordable means gentrification and the associated displacement of poorer people.
posted by congen at 4:37 PM on April 19, 2016 [18 favorites]


My son doesn't need to go to karate for $130 a month. Both my kids didn't need to do gymnastics for a few years for some astronomical sum. We didn't need to buy a top of the linevitable washing machine with my annual bonus when ours died...

... but all of those thinks are true. I can justify the expenses for our kids because they need the stimulus, structure and movement control. I can justify the washing machine because we have quartered our water bill and we will run this one into the ground. Our mortgage payment dropped what we were paying in rent. We have a small rainy day fund, but also have debt that we are paying off in addition to our mortgage.

There is no way we could afford hockey, or extended hour daycare (instead my wife and I work opposite shifts) like so many of my neighbors. We haven't been on the Disney Vacation that signifies we love our children.

I don't know. I guess in many ways we don't have the $400, as we carry more debt elsewhere, but we do make sure that we have the $400 because something always comes up. Next month we know we will have to put new tires on both cars, so we have planned our finances accordingly. It is a tightrope but it is a walk that we can make, albeit one we still need to be careful with.
posted by Nanukthedog at 4:41 PM on April 19, 2016 [4 favorites]


Another thing about this is that every subsequent generation seems to be living off the fumes of the Boomers' savings (illustrated here by the fact that the author had to wipe out his parents' savings along with his own to put his daughters through college)...once the Boomer Bank goes bust it's really gonna be fun times.

As someone in their mid 20s, this is insanely true. Every single person i know who has any family funds to fall back on, or even family assets to live on or in(like houses, even property to park some thing on or crash somewhere at, etc) it's almost exclusively based on boomers money or assets.

Shit, i wouldn't be able to repair my damn car today if it wasn't for that. I wouldn't have the actual car, which was a cheapie hand me down from a friend(which came from a family friend also in that generation!) who... inherited her boomer grandmas halfway decent car. I know more than one person who would have nowhere to live or be stuck in a super duper shitty living situation.

It's turtles all the way down with this one, and when the tower topples yea... shit is going to be fun.

Anyone i know who has actual savings, or parents with savings they can tap in on stocked the fridge with that. The exceptions are few and far between. We're not talking about big money here either, lets say under 100k almost always.


As it is, mid last year i had a decent amount of savings... And then i was basically managed out of my job to the point i was working 1-2 days a week for a couple hours at a time to back up someone getting paid triple my salary. I burned through my entire savings by the time i did find one, and basically just went "Welp, that's never filling up again until i'm like 35+". I have no idea what i, or most my friends would do if it wasn't for our parents(with our grandparents modest sums of money stashed) or our grandparents. Just be fucked and live in the back of our cars instantly upon job loss i guess?
posted by emptythought at 4:42 PM on April 19, 2016 [4 favorites]


I wish there was an article like this, but instead of focusing on one person/family, the writer profiled a few more people across income strata. People typically don't have insight into the nitty gritty details of other people's financial situations - who is pooling their money for an intergenerational living situation, who got an inheritance to bulk up the retirement savings, who has credit card bills up the wazoo, you just really don't know until you dig. The writer's family - clearly there were expectations about class status - it seems that there was no financial education to explain what it takes to maintain those trappings. I know we go 'round and 'round on the boomers, but there seem to be many of them living very nice lifestyles after working at "middle class" jobs. Subsequent generations saw that level of comfort and made educational and work decisions accordingly.

I don't know. I sighed when I came to the part about emptying a 401k to pay for the daughter's wedding, because by that point you think he would have caught on, but I do think that most people have a very hard time anticipating the future consequences of financial commitments.
posted by stowaway at 4:44 PM on April 19, 2016 [2 favorites]


Access to credit is a form of social capital that middle class people are more likely to have.

And even THAT is a trap.

I bought a car last fall. I put down around 40% in cash to knock down the monthly payments. The dealer asked "Should I put the financing through with the expected 1.9% APR?" I laughed and said "Check it first." So she checked my credit and said "well, it'll be a bit higher." How much higher? "6.99.%"

How did it get that high? Because I use a debit card on the Visa network instead of a straight Visa that can roll up interest charges. I disposed of my credit cards apart from that many years ago. I kept myself out of debt beyond typical bills, avoided needless expenditures, and put myself in a position where I _could_ put 40% down in cash. And thus, my credit score... was zero. Not shitty credit; NO credit. The salesgirl laughed and said "we're seeing that a lot with younger people these days; it's not that they had bad spending habits but that they're off the credit grid."

They ran my finances, salary and such through something like 25 banks. Two offered a loan at any APR. Two. Because by avoiding putting my financial future at risk, I wasn't risky enough to be worth offering money to. Gotta play the game and tithe those interest charges to be allowed to play the game, y'know?
posted by delfin at 4:47 PM on April 19, 2016 [31 favorites]


We have this Puritan ethic in the U.S.A. that has been jammed down our throats by the 1% that if you are wealthy, you are deserving of your wealth and if you are poor it is because you are somehow deficient in character.

We've got this story we're being sold now that not only are we supposed to be good at our work but we have to be able to market ourselves, negotiate our salaries, manage complex financial instruments to save for retirement and figure out complicated insurance policies to have decent health care. We're expected to work hours and hours of overtime for no additional pay, to be on call when we're not at work for no additional pay, to do more and more for less and less pay...and on and on and on.

Employers have the power, still -- the "gig" economy is a farce -- and we're being made to feel inadequate because all we want to do is our work without the other baggage.

Unions can fix the inequity by making sure that folks earn a living wage and that after a lifetime of hard work there is a pension available to you in your old age. That your medical expenses are covered. That you can't be arbitrarily fired from your job because you are too old or your personality rubs your supervisor the wrong way, or you just aren't a good "fit". You get adequate training to do your job and that there is someone (Union Stewards) advocating for you.

But Unions are being demonized and there are fewer and fewer Union workers and laws are being passed to make sure there are even fewer. The only ones benefitting from that are management and stockholders who are getting richer and richer.

My father had a pension from his job (he worked at the same company for over 30 years) and my mother from hers. Those pensions, in addition to a fairly small amount of Social Security, ensured that they had a comfortable retirement. They also worked hard and saved--never had credit card debit, only paid cash for their cars, etc.

I have a union job now--I played the Silicon Valley lottery and I freelanced for years, but I am grateful I was able to get into a union for the downhill side of my career. I will have a pension, and my savings, and a tiny amount of Social Security when I retire. If this were a privately held company, I would have been "laid off" by now (with no pension or benefits) because my current supervisor is in her 30s and thinks I'm old and no fun. But I don't have to worry about what she thinks because I'm protected by my contract. I am very good at what I do, and I enjoy it, but I'm able to enjoy it more because I don't have to worry about anything but doing my job.
posted by agatha_magatha at 4:54 PM on April 19, 2016 [39 favorites]


You can see why so many people are willing to vote for a lunatic who promises to magically fix their financial woes.
posted by gottabefunky at 4:58 PM on April 19, 2016 [8 favorites]


Hey, co-signing that this link crazy with stars posted is really informative about the causes of regional inequality within the USA.
posted by en forme de poire at 4:58 PM on April 19, 2016 [2 favorites]


We were in this boat, sort of. Never quite attained to the level of middle class achievement that we had any thoughts of planning college for the kids or anything, but now, we've got two households that are going broke, I'm broke, and all sorts of what I'd like to think are well-meaning people keep telling me I've got a chance at a new life now. Never really wanted a new life so much as just a job that would pay our bills and where I wouldn't be harassed/get myself into trouble for having political beliefs, a conscience, and not being a schmoozer. Now I've got some weird mess of a life that seems to be headed for bankruptcy and a really ugly divorce for me (since I'm not in a position to get an attorney and have no interest in taking members of my own family to court like an asshole, but still can't bring myself to mount a legal opposition). Oi vey. I feel so much worse off than the people this article is about, and yet, the middle class still gets my sympathy. It's a hell of a trap, giving a shit about anything other than yourself in a world set up to reward the opposite.
posted by saulgoodman at 5:09 PM on April 19, 2016 [5 favorites]


Because by avoiding putting my financial future at risk, I wasn't risky enough to be worth offering money to. Gotta play the game and tithe those interest charges to be allowed to play the game, y'know?

I have credit cards. I haven't paid interest on them in, I think, nine years. If you have the income adequate to your needs, it is entirely possible to use a credit card strictly for convenience and cash back (at this point I must be into the card companies for a few thousand dollars of cash back; it's a personal mission). But only if your income is sorted and you have a solid awareness of your spending. That way you don't get cut off from anything that requires a credit check.
posted by praemunire at 5:10 PM on April 19, 2016 [20 favorites]


This isn't the story of a guy who can't cover his bills, it's a guy who never made his daughters pay even a portion of their own way in life.

18 years of private school (x2) x 4years of Standford x 4years of Emory x 4 years of Harvard Med school x2 years of MSW at Texas has to be a million, maybe close to two million dollars.

He could've let his special snowflakes slum it in public school, or take on education debt in their own names like every other millennial that's not of the 1%, but choose to burn all his savings and inheritance on the best two educations money can buy. Hell, 2 years at a community college and transfer to CUNY would've saved Dad a half mil. He made unselfish choices at his own expense, but if he's hurting in retirement, he needs to ask his doctor daughter for some return on investment.
posted by T.D. Strange at 5:13 PM on April 19, 2016 [28 favorites]


The urban/rural split that crazy with stars brought up was illustrated dramatically by the recent story on changing death rates. As much as we city people complain about our problems, it's worse to live in rural America nowadays. Significantly-more-people-dying worse. "According to recent studies of death certificates, the trend is worse for women in the center of the United States, worse still in rural areas, and worst of all for those in the lower middle class."
posted by clawsoon at 5:18 PM on April 19, 2016 [4 favorites]


18 years of private school (x2) x 4years of Standford x 4years of Emory x 4 years of Harvard Med school x2 years of MSW at Texas

One of his daughters was a Rhodes Scholar and is now at Harvard Medical School. I'm guessing she managed to get some funding along the way. Sheesh.
posted by jokeefe at 5:19 PM on April 19, 2016 [14 favorites]


In this climate, if you could afford Stanford front and chose community college instead, you just royally screwed any opportunity for financial security. If you can claw your way into the upper 10%, you still have it good. If you can do so without taking out loans, you are set.

But if you have to fight for jobs with the masses who have a CC transfer degree? Hah! You think this is a meritocracy? No, the people who got sent to Stanford got a better education - regardless of any crap like innate ability, they have better name recognition, better connections... they don't need to try half as hard to get the jobs that pay well and are still secure.
posted by Zalzidrax at 5:20 PM on April 19, 2016 [23 favorites]


clawsoon: "The urban/rural split that crazy with stars brought up was illustrated dramatically by the recent story on changing death rates.""

This is true, but I want to make it clear that the article I linked to isn't really about urban/rural -- it's about winner and loser metropolitan areas. New York/LA/SF vs. St. Louis/Memphis/Cincinnati.
posted by crazy with stars at 5:26 PM on April 19, 2016 [4 favorites]


In this climate, if you could afford Stanford front and chose community college instead, you just royally screwed any opportunity for financial security. If you can claw your way into the upper 10%, you still have it good. If you can do so without taking out loans, you are set.

He couldn't afford it though, that's the whole premise of the piece. Spare me the elitism, there's plenty of doctors that went to Wayne State instead of Harvard med, Syracuse in-state undergrad instead of Stanford, and they're still called Doctor. I'm a lot more concerned about the people who can't replace the brakes on their 12 year old car in between juggling two part-time jobs than the rich white guy writer wishing he was richer, who blew his retirement on private schools.
posted by T.D. Strange at 5:28 PM on April 19, 2016


I'll bet the cost of SUNY wasn't all that different from the cost of Stanford (after financial aid; few people actually pay full ticket price at Ivies), if his daughters are around my age.
posted by en forme de poire at 5:31 PM on April 19, 2016 [4 favorites]


A significant bit of the rural/urban life expectancy split is that a large fraction of the gain in life expectancy lately has been related to rapid angioplasty for coronary events, so there is a direct relationship between the distance to the closest hospital and the risk that you will die instead of getting a spiffy new stent on the occasion of your first heart attack.

I looked very hard at moving to the higher and more inland sticks in the years after Katrina, but now as I contemplate my spiffy new stent received in a pretty decent hospital located less than two miles from here, I am considering my failure to find a suitable property before the housing market collapsed a bullet dodged in multiple dimensions.
posted by Bringer Tom at 5:33 PM on April 19, 2016 [8 favorites]


(OK, maybe that was overstated, but I'd still bet the difference in cost wasn't like, an order of magnitude given all the financial aid machinations. My point is that even in-state tuition at public colleges is really expensive these days and tuition at some of the wealthiest private schools can end up being way lower than advertised.)
posted by en forme de poire at 5:35 PM on April 19, 2016 [1 favorite]


He could've let his special snowflakes slum it in public school,

Well, I'll bite since I admitted this is kind of my Achilles heel. I paid premium rates for both of my kids' daycare/Montessori, and have kept them in right up to grade one despite free kindergarten. This is not the wisest financial decision -- it's kept us from saving as much as we should. But once we experienced it, man, public school for my oldest was hard to swallow. We live in Toronto, the schools are okay - but just okay. My son is needing a lot of extra learning and it's tiring. What kind of extra learning? He came home in grade two convinced Rosa Parks sat on a bus to end slavery. In grade three he learned the Scottish settlers in /1840/ learned about pemmican and how to make clothes from fur in Upper Canada thanks to the First Nations. (This makes no sense and is at least 100 years off.) They don't teach long division or cursive.

My youngest is still in pricey Montessori (for senior kindergarten) because he has a vision problem and is way behind on reading skills. From watching my older child struggle with so-so teachers, I'm really scared to put a just recently not-legally-blind child into that system.

If we had a little bit more money, I'd have them in private school past the reading/gotta pay daycare anyway years. This isn't because I think my kids are super special snowflakes, it's because the education available publicly is seriously inferior to the one I got and it bugs me.
posted by warriorqueen at 5:35 PM on April 19, 2016 [6 favorites]


I wonder what his wife and daughters think about all this. Education is one thing, but if I found out my financially-precarious parents blew their entire retirement savings on my wedding I'd be horrified.
posted by colbeagle at 5:41 PM on April 19, 2016 [17 favorites]


I even missed the whole wedding thing, good lord.

Man thinks he's the 1%, learns otherwise.
posted by T.D. Strange at 5:46 PM on April 19, 2016


Education is one thing, but if I found out my financially-precarious parents blew their entire retirement savings on my wedding I'd be horrified.

Me, too. And from the opening of the article, his daughter knows he's not in great financial shape. If I had previously thought my parents could comfortably pay for my wedding, and they really, really wanted to, I might let them. The minute I found out that it might be a burden to them? Everything would stop. So I found that part of the story quite odd. His kids damn well better take care of him and his wife in their old age.
posted by praemunire at 5:49 PM on April 19, 2016


here's also the entire narrative around securitizing mortgages in the 2000's to give lower-income Americans the ability to get a home loan—essentially expanding credit to lower income folks.

I am not sure how accurate that narrative is though


Close but happened the other way around. Once investors saw there was money to be made, there became a higher demand for mortgages which led to a decrease in credit requirements, which led to lower income and/or worse credit to be able to get loans.
posted by LizBoBiz at 6:07 PM on April 19, 2016


And from the opening of the article, his daughter knows he's not in great financial shape.

But also, we don't know the order of events here, and he says elsewhere that he hasn't always been forthright with the other members of his household about exactly what his financial situation was. He may have framed it as a cash flow problem to his daughters, and that may have well come after the wedding, or long enough before that they believed it was a temporary blip and that the situation had improved. Families often don't really talk frankly about money and in particular, parents often refuse to talk about the details of their finances with their adult children.
posted by en forme de poire at 6:09 PM on April 19, 2016 [5 favorites]


I was really poor most of my young life and my grandparents helped with my college funding. Of course, back then, I paid $6,000 a year. In my 20's, the earnings were pretty lean.
The best rule I made as a dumb bachelor was a simple one, don't buy it new if I could get a used one of decent quality, except shoes and underwear. I was able to start socking away small amounts of cash over time and buffered some really crap situations.
posted by Muncle at 6:10 PM on April 19, 2016


Boomer here. My mom (Greatest Generation) paid for my college and gave me her house when her mom died and left her a house. As a result, I could buy a house for my Millennial daughter and am still paying the mortgage for her house while she finishes her Ph.D. I am white and middle class and my family therefore had access to property (no redlining, could get mortgages) and I know how to game the system and take standardized tests, so in spite of the fact that we all at one point or another have not had $400 to our name, I'm able to perpetuate privilege. That may be what people are trying to get at when criticizing the author of the piece.

That doesn't negate the fact that easy credit, financial manipulation, a consuming and fearful culture, and the increasing expense of things considered necessities (many of them, these days are things called "insurance") have put a lot of people into an awful place.
posted by Peach at 6:10 PM on April 19, 2016 [6 favorites]


Oh, yeah, and the silence of shame. "[T]he desperate need to mask it and pretend everything is going swimmingly," as the article says. I teach the children of the so-called rich, and I can tell when the markets are going belly-up because the parents fall apart. A lot of them are behind on everything.
posted by Peach at 6:13 PM on April 19, 2016 [3 favorites]


I said upthread that 20 years ago companies were throwing credit cards at me, but nothing has really changed

For you, and for me. But in 2009 we passed a law requiring credit card companies stop giving credit cards to students with means of repayment in exchange for a frisbee.

While it took me a long while to warm up to the idea of rewards credit cards, I was stealthily building up a solid credit history of payment on time by not using or activating my credit card. Companies give me increases from time to time and I am okay with that, because it seems to improve my overall score. Which comes in handy when I do need financing. Its kinda of a weird prove-you-don't-need-it-to-get-it model.
posted by pwnguin at 6:14 PM on April 19, 2016


He could've let his special snowflakes slum it in public school,

We all want the best for our kids. It is simple biology.
posted by My Dad at 6:15 PM on April 19, 2016 [2 favorites]


Yeah, if I could afford to get my kid off the test centric hamster wheel of public school, and into any number of the good private schools in the metroplex I would. But the closest one is 45 minutes away and costs $25k a year, plus the mandatory fund raisers, plus all the extraneous expenses, with the added burden of being the poor kid that can't jet off to Vail with the rest of his class. The closest Catholic school, which is where I spent my early academic time is 30+ minutes away, and nonparishioner fees are over 15k, plus incidentals, and I'm unwilling to pretend I believe something sacred to so many, just so I can get a discount.

But I totally understand the parents who sacrifice all the things to make their kids perhaps have a better chance at this rat race, I totally do. Because the race is rigged against us, and any chance to skip directly to Go, is a chance that hurts to pass up.
posted by SecretAgentSockpuppet at 6:16 PM on April 19, 2016


Close but happened the other way around. Once investors saw there was money to be made, there became a higher demand for mortgages which led to a decrease in credit requirements, which led to lower income and/or worse credit to be able to get loans.

yup, and what also was happening was operators like Countrywide were making 80/20 loans, giving the 80% piece to Fannie/Freddie and selling the 20% loan to Wall Street, which would collect these 2nd-position mortgages into CDOs, tranched into levels such that 90%+ (forget the exact number) would be rated AAA, safe as US Treasuries.

http://www.thisamericanlife.org/radio-archives/episode/355/the-giant-pool-of-money -- May, 2008!

Everybody loved buying this junk, until all these loans started defaulting in 2008-2009.

Housing, of course, is the main treadmill everyone's on. Most people can verify this by merely looking at their monthly bank statement.

All the 'good' places to live are full now -- basically, you've got to buy your way in.
posted by Heywood Mogroot III at 6:27 PM on April 19, 2016 [1 favorite]


If 50% of all households have a $400 tipping point, that means a really unstable petite bourgeoisie. Pitchforks and torches might not be on the horizon, but these election cycles and party realignments are only going to get weirder and weirder.
posted by klarck at 6:47 PM on April 19, 2016 [11 favorites]


this guy...he isn't poor. i hate to put i means test on it, but i will. did you ever have to carefully catalog your stuff and take the best three things to the pawn shop so you could pay up front for your sick one-year-old's prescription? i'm thinking more here have a story like that. so i'm not really feelin' it for dude.
posted by j_curiouser at 7:05 PM on April 19, 2016 [1 favorite]


But both of those narratives can co-exist and it's important to talk about them both because the folks pawning stuff for medicine, you know what they aspire to? Being able to get their kids (or maybe just one, who needs things that the public schools in their area aren't good at providing) into a school that suits them. A car that starts every day, every single day. A house. Middle class.

And a predatory system that wants to get them on that treadmill the second there's enough paycheck to do so. If you can't scrape up compassion for one human being because another is in worse shape, know that the latter would do anything to be in the former's shoes because they think it'll all be okay there.
posted by Lyn Never at 7:24 PM on April 19, 2016 [17 favorites]


I kind of hate the blaming on "financial literacy." I am financially literate enough to know that we are fucked. What now?
posted by amanda at 7:28 PM on April 19, 2016 [9 favorites]


Also, it seriously warms my heart and gives me hope that a few folks on here who are "boomers" are saying that they see it and they get it. My mother doesn't and some of our talks have been painful and alienating because she thinks I'm making it up or not frugal enough or should just plan better. I'd like for the boomers to become more financially literate and vote for us.
posted by amanda at 7:31 PM on April 19, 2016 [5 favorites]


Syracuse in-state undergrad instead of Stanford

Ahem.
posted by ROU_Xenophobe at 7:50 PM on April 19, 2016 [3 favorites]


One of the interesting cultural differences I've found, broadly speaking, and at the risk of sounding a bit racist, between Eastern / Western cultures, is the level of comfort people have with different levels of savings. Perhaps it's related to the availability of the type of safety net (government vs familial), or the shame / guilt dichotomy. But I've found by and large Westerners save less while Asians over-save, almost to the level of hoarding: the article is a case in point: and it's not due to the level of absolute income - there are Asians who manage to save despite earning very little.

It's about the level of comfort one has to living near the edge of financial instability, how close to the edge of the cliff one dares venture for the view. And so some speculate that this is the product of culture: in a shame oriented culture, asking for money has a far greater significance: and being the person with resources, able to lend it out, also confers greater status. So people decide to live further from the edge. Government safety nets are also virtually non-existent in many Asian countries, further reinforcing this mentality, which then becomes hard to kick when Asians migrate to Western countries.

Re: private schools, many studies have shown a lack of convincing link between school quality and individual achievement and life trajectory. (mostly through lottery studies, which allows random placement of students). Far more important is the socio-economic status of the parents. That at least is something you can actively work towards: it might just be the most important thing you can do for your kid. It worked out anyway in my case: we almost had a twin study in place, I went to a "bad" school with abysmal results and teaching / infrastructure and my brother went to a "high achieving school" and also an expensive private school, but our life trajectory turned out pretty much the same.
posted by xdvesper at 8:01 PM on April 19, 2016 [8 favorites]


I worry a lot about precariousness. We are doing ok right now, but I am aware at every moment that the overall context is not good and that one bad event could change everything. And we both have extended family (including boomer parents) who are likely to need support, which brings yet more things to worry about and try to find ways to plan for.

I rolled my eyes just as hard as everyone else in the paragraph where he uses the 401k to pay for a wedding. But at the same time, there was something at least kind of rational about that -- you are not going to live off of a wedding-sized 401k, so why not invest the money in the daughter and reap rewards of happiness and connection?
posted by Dip Flash at 8:16 PM on April 19, 2016 [6 favorites]


He says he didn't make good decisions, and makes no bones about it. It's the statistics in between that are what matter in the article. He's just using himself as one particular example.
posted by Peach at 8:27 PM on April 19, 2016


I actually kind of wince when people snark angrily about special snowflakes whose parents paid for their college. The reason I am not part of the 47% is because my parents started saving when I was an infant and paid list price at an Ivy. The direct consequence of that (plus the critical component of placing paramount importance on savings - they made me open a Roth IRA my first year of grad school) is that I have never been in debt and every excess penny I have ever earned has gone into savings.

I am not debt-free because I am morally superior. I am debt free because I am incredibly lucky to have parents who worked their whole lives to get me off to a good start and for that I will be eternally grateful. Instead of paying student loans I am putting that money into the college savings account we opened while I was pregnant with my first child. Because I want to give my kids the same gift. They'll get secondhand clothes and bikes, but they'll get college.

So, though it's clear in hindsight that the author of this article could have made better decisions, I think it's mean-spirited to hate at him for wanting to launch his children into a debt free existence.

I found this article surprising, as it was intended to be. I had no idea that so many people have so few savings. And I really feel that it's an indication of something gone badly wrong in our society. As others have said, it's easy to litigate other's choices, but when half our country falls into that category there is a structural problem.
posted by telepanda at 8:32 PM on April 19, 2016 [12 favorites]


The more of these narratives we get, the better. It doesn't matter if they're coming from writers or insurance agents or nurses or middle management or bookstore clerks - what is important is breaking the rule of silence that says nice middle class Americans never, ever talk about actual money and not making it. Only when enough people come out and say hey! I cannot make it here anymore! will it ever be addressed. Silence gets us nowhere. There is strength in numbers.

Or so one hopes. However as a formerly middle class American who could not possibly come up with $400 without serious juggling and borrowing (well aware that only the cultural middle classness makes that even an option) I am not sanguine about the return of the bourgeoisie. I think it is all too late. That song came out eleven years ago. Things have only gotten worse. Much much worse and still the "oh it's all your own fault" narrative holds sway. I hope it makes everyone feel better, because thinking that it could never happen to you as your car is careering ever closer to that cliff where the safety rail was stolen by scrap metal pickers years ago is certainly one way to go down.
posted by mygothlaundry at 8:52 PM on April 19, 2016 [17 favorites]


Sorry, as a public school kid with 4 siblings, parents who couldn't have hoped to pay for 4 college educations, and 200k+ worth of school debt in my name, I don't have any sympathy for this guy whining about his choices, or his kids if they have to take care of him because he blew his retirement on their fancy schools.

Some people are lucky enough to have middle or upper class parents who saved well for college, that's great for them. No one here is arguing against responsible college savings. This guy was about the opposite of that, and he's a bad example of the kind of structural savings problem he's allegedly trying to highlight. He didn't even attempt to save despite having well above average means of doing so, then is whining when the predictable consequences of a lifetime of terrible financial choices finally outstripped his considerable earning power. Using himself as the subject of the article undermined any legitimate point he was making about the broader economy, and comes off like a guy bitter he's not well as off as his friends and Summer Hamptons neighbors profiled in the NYT style section.
posted by T.D. Strange at 8:55 PM on April 19, 2016 [2 favorites]


Xdvesper, I suspect that the saving thing is that a whole lot of adults in Asia still very clearly remember when their countries' economies suddenly collapsed at various points in the past couple of decades. In a sense, they're just sort of ahead of the curve vs. Americans.
posted by DoctorFedora at 8:59 PM on April 19, 2016 [3 favorites]


There's a unhealthy dose of judgment here. Dude didn't make the best decisions, but jeez. Always a shame to see this on the Blue.
posted by triage_lazarus at 9:03 PM on April 19, 2016 [11 favorites]


I rolled my eyes just as hard as everyone else in the paragraph where he uses the 401k to pay for a wedding. But at the same time, there was something at least kind of rational about that -- you are not going to live off of a wedding-sized 401k, so why not invest the money in the daughter and reap rewards of happiness and connection?


My concern was less for the father, who is clearly aware that things have gone pear-shaped and what his role was, and more for the daughters, who may just be finding out that their parents are completely broke. Putting myself in that position, it would be an enormous burden, to know that your mother sacrificed her career and income for your childhood, your parents and grandparents sank multiple generations worth of accumulated family wealth into your fancy-pants education, and your parents blew the last of their retirement resources on a big party just for you. How would you even begin to explain when it turns out you don't like practicing medicine? Or that your social worker salary won't cover supplementing the parents in their old age? Or that the marriage was a serious mistake and now you need a divorce?

It's entirely possible that none of that is an issue for their family, that the happiness and connection easily outweigh the worries about obligation and responsibility that would be running through my admittedly pretty anxious head. But as I reach an age where I start to see friends and coworkers dealing with aging parents, what becomes clearer every day is that one of the best things my parents ever did for me was keeping their own financial house in order to the extent they were able, such that I don't have to worry that one healthcare scare or car repair is going to bring the whole edifice tumbling down on top of them and me and my sister, and I don't have to plan my life with the assumption that I will some day soon be supporting my parents financially.
posted by colbeagle at 9:04 PM on April 19, 2016 [25 favorites]


Another thing about blowing lots of money on the wedding; I really don't think people who blow lots of money on a wedding do it for the quality of the experience. They're showing off and buying status. And that is a terrible use of money unless it directly feeds back into your profession (i.e. you have a job that requires you to look rich).
posted by Mitrovarr at 9:07 PM on April 19, 2016 [2 favorites]


Another thing about blowing lots of money on the wedding; I really don't think people who blow lots of money on a wedding do it for the quality of the experience. They're showing off and buying status.

It's more of a cultural convention, I think. Most people are embedded in a culture. It's really hard to buck societal norms.
posted by My Dad at 9:12 PM on April 19, 2016 [3 favorites]


Well, ok. But a lot of those societal norms are competitive pressures, and they'll only go up if everyone has more resources. So they kind of need to get those fixed even if progress is made toward fixing inequality (i.e. it doesn't help if you make more money if you must keep up with the Joneses, and the Joneses are also making more money).
posted by Mitrovarr at 9:15 PM on April 19, 2016


I'm so glad people have pointed out that this guy is undeserving and in any case not-really-poor. I almost wasted valuable sympathy over him! Now, if someone could link me to a truly innocent victim I can performatively shed my internet tears over, I'd be grateful.
posted by Sonny Jim at 4:30 AM on April 20, 2016 [7 favorites]


After reflecting, I think a lot of the comments here (including mine above) are focusing too much on his poor decisions. And those decisions matter -- he openly acknowledges that he repeatedly and over a long period of time made poor financial decisions and has paid a high price for it.

But even if he had made better choices (and more importantly, had been lucky to correctly time real estate cycles rather than mistiming them), he would still be affected by the removal of safety nets and the massive erosion of middle class economic security. My grandparents were, and my parents are, middle class, like I am -- educated, white collar jobs, etc. But they were significantly more financially secure on a single income than we are with two (and on top of that we have no children). If the author had simply been born twenty or forty years earlier and pursued the same career track, he likely would have ended up in better shape even with his financial illiteracy, simply because the structure of the US economy used to be much more favorable to the middle class than it is now.

That doesn't mean that he isn't still massively more privileged than the actual poor, and he directly acknowledges that fact a couple of times. But that other people are poorer and more disenfranchised does not detract from the story he is telling about the erosion of middle class security, and how the affected people have largely been coping in private using credit and intergenerational wealth transfers as ways to backfill stagnant salaries and higher costs.
posted by Dip Flash at 4:42 AM on April 20, 2016 [15 favorites]


I have a slightly different perspective. Mr Moiraine and I are young and extremely well-paying jobs, despite coming from lower-middle class families. We are incredibly responsible about money and use credit cards only to get cashback points -- i.e. gaming the system. We read financial blogs, finance books, and now both of us happen to be working in finance. We have a lot of savings for our age (>>$100K).

We currently live in a city (it's not the one stated in my profile FYI) with eye-watering housing costs. Everyone is obsessed about getting on the housing ladder. Newspapers, the government, our friends and family. We are currently experiencing an incredible amount of social pressure about our plans to buy, as if it was a given. But doing some detailed financial analysis on housing costs vs renting costs, after accounting for the cost of capital, opportunity costs, discount rates, transaction fees and taxes, and some careful assumptions about credit and economic growth, we can find no good financial reason to buy. Of course, it's nice to own one's house, but 'nice' is not good enough a reason for an extremely expensive financial decision.

No one can understand our decision, not even when we explain it to them, not even our friends working in finance or who are financially-literate. We often get pitying looks and comments, like, "How about you ask your parents for a deposit?" or "Have you checked out this housing tax break?" It's not that we can't afford to buy, it's that we don't want to buy, and that we think it's a poor investment decision in the current market.

It is very hard to go against the grain of thinking within your peer group. It's easy to come up with reasons why Person X should not do Action Y. But if all your peers are doing Action Y, then to say NO to Action Y would cause emotional and physical distress. The happiest people are the ones who are most integrated into the community -- they have the best emotional states, they live the longest. It's hard to be part of the community when all of your peers are homeowners and looking at mortgage costs, home improvements, house browsing, and ... you are not. And also to have the courage to make a decision that so wildly goes against what the Community has decided is best. Let's not even get started on wedding norms.

There is a cost to being part of your peer group, and Neal Gabler has fully paid up, subscribed, only to find out that maybe he could not have afforded to do so in the first place. I would never make Neal Gabler's decisions -- private school? I went to a public school in a third-world country and came out fine -- , but I can see how peer pressure and wanting to keep up with your children's Jones' comes from. Have a little more empathy, it would look good on you.
posted by moiraine at 5:02 AM on April 20, 2016 [18 favorites]


A wedding is an investment?
posted by archimago at 5:40 AM on April 20, 2016


Another point:

People have said about how Neal Gabler was not poor; he could have saved more, made better choices. Not poor enough to give his experience.

this guy...he isn't poor. i hate to put i means test on it, but i will. did you ever have to carefully catalog your stuff and take the best three things to the pawn shop so you could pay up front for your sick one-year-old's prescription? i'm thinking more here have a story like that. so i'm not really feelin' it for dude.

News flash. There will always be someone poorer than you. Even the poorest American family would pale in comparison to families in some other countries. I'm specifically thinking of my mother, whose parents had ten children (no such thing as birth control) and only ate meat once a year. Her mother was illterate and sold sweet cakes on the street. The whole family slept in one rented room. No beds, just mats on the floor.

Is your experience more "poor-worthy" than Neal Gabler's because you have endured more poverty? And in a similar vein, is your experience less "poor-worthy" than all the millions of people in the world who earn less than $2 a day and would kill to have your first world-poor-middle-class problems?

Let's not get into an arms race of judging exactlywho is poor and who isn't. Neal Gabler is just one article. He's not representing yours specifically. It just adds another dimension in the whole debate.
posted by moiraine at 5:46 AM on April 20, 2016 [12 favorites]


A wedding is an investment?

If you're responding to my comment, you have read it wrong. Not sure what paragraph you happened to be skimming through.
posted by moiraine at 5:52 AM on April 20, 2016


It breaks my heart when people cash out 401(k)s for non-retirement reasons. One huge and too-little-discussed benefit of retirement accounts is that they are for the most part judgment-proof and exempt in bankruptcy (there is a limit to the exemption, but it's in the low seven figures). Coupled with that is a deep social stigma against bankruptcy. So, what you get (and especially saw during the financial crisis) are many people cashing in retirement to pay medical bills or the mortgage, because there is so much shaming around strategic default and bankruptcy, even though those tools would allow people to eventually escape overwhelming debt while keeping their retirement funds intact.

I'm not saying that would be the right option for everyone. But so many didn't (don't) know that they even had the option, or felt social pressure to avoid it, even while the banks they were working so hard to repay were chief contributors to the economic environment they were in.

We need better financial literacy. Absolutely. Dave Ramsey gets a bad rap because he entangles his financial advice with religion and because some of his advice (once you get to the investment part) is not so great. His rhetoric contributes to the stigma against bankruptcy, which I strongly disagree with. But he is one of the few out there with a defined, accessible system for starting from nothing (or less than nothing) and making tangible steps forward. And his foothold in churches in rural America is reaching many of the people who need his advice most. I'll offer YNAB as another example of almost grassroots financial literacy, but I worry that its recent shift to a subscription model means it will reach fewer people.
posted by mama casserole at 5:55 AM on April 20, 2016 [10 favorites]


I was responding to Dip Flash: he uses the 401k to pay for a wedding. But at the same time, there was something at least kind of rational about that -- you are not going to live off of a wedding-sized 401k, so why not invest the money in the daughter and reap rewards of happiness and connection?
posted by archimago at 6:11 AM on April 20, 2016


moiraine: It is very hard to go against the grain of thinking within your peer group. It's easy to come up with reasons why Person X should not do Action Y. But if all your peers are doing Action Y, then to say NO to Action Y would cause emotional and physical distress. The happiest people are the ones who are most integrated into the community -- they have the best emotional states, they live the longest. It's hard to be part of the community when all of your peers are homeowners and looking at mortgage costs, home improvements, house browsing, and ... you are not. And also to have the courage to make a decision that so wildly goes against what the Community has decided is best.

That's a fantastic point. I learned from my parents that "debt" and "beer" are both bad words. With that thinking, it's easy to save money, but it's hard to make friends.
posted by clawsoon at 6:12 AM on April 20, 2016 [1 favorite]


I was responding to Dip Flash: he uses the 401k to pay for a wedding. But at the same time, there was something at least kind of rational about that -- you are not going to live off of a wedding-sized 401k, so why not invest the money in the daughter and reap rewards of happiness and connection?

A wedding is often an investment in social capital. It's not an investment that I made (we eloped with no regrets) but weddings and other big events like quinceanaras have a social value that is important to many people, cementing ties and obligations that can be drawn on later.

I'd still say that it was a bad financial move, but in context it was one small bad move, with some positive upsides, in a sea of bad financial moves. At least the wedding provided pleasure and perhaps social capital, unlike many of the boneheaded money decisions most of us have made.
posted by Dip Flash at 6:16 AM on April 20, 2016 [3 favorites]


I just started listening to Ramsey and I just tune out all of the religious stuff. I don't agree with him on every point (e.g., I think it is smarter to pay off larger-interest CCs instead of his way of starting with the lowest balances because it makes people feel like they are accomplishing clearing away debt) but I listen because it gives me regular reminders that I don't have a lot of time left to ensure I'm not eating cat food in my winter years.

I've heard him give different advice on bankruptcy depending on the caller. And didn't he himself declare it in his youth?

I've never used one of his endorsed local investment brokers (or whatever he calls them) but I like the idea (if it's for real) that he has done the research and found people who can help me invest in a way that is good for me, not the broker.
posted by archimago at 6:18 AM on April 20, 2016 [1 favorite]


I've heard him give different advice on bankruptcy depending on the caller. And didn't he himself declare it in his youth?

It's been a few years since I listened to him, so you're probably a better judge. I remember him treating debt repayment (and default) as a moral issue, which I disagree with.

In any event I hope my comment didn't come across as overall critical of Ramsey, when I meant it to be overall positive.
posted by mama casserole at 6:45 AM on April 20, 2016


This essay is definitely not directed at the lower classes (and if it was, not cool dude). I don't know everyone's financial situation here but maybe most of the criticism is coming from people who grew up in/are currently in precarious financial situations where they either have much less money than him to fall back on or fell into the situation through no fault of their own (i.e. not bad decision making). Its really hard to feel empathy for a guy who went into debt spending huge sums of money on private education when some of our parents went into debt just to feed us.

I am also confused by the use of "middle-class" here. I didn't think private school and Ivies were middle class. I though it was public school and quality state universities, with some of the really smart kids getting into the Ivies. Wasn't there some study or article or something where alomst everyone says they are middle class, whether they are poor or rich? (I think that may be the difference between rich and wealthy: the wealthy recognize that they are upper class while the rich are still trying to act like they are middle class).
posted by LizBoBiz at 6:52 AM on April 20, 2016 [5 favorites]


I've never used one of his endorsed local investment brokers (or whatever he calls them) but I like the idea (if it's for real) that he has done the research and found people who can help me invest in a way that is good for me, not the broker.

This is a good example of perfect being the enemy of good. Actually the "ELPs" are not a good deal for investors. They work on commission, so they very much have an incentive to invest in a way that's good for the broker, not the client. (Most personal finance experts recommend fee-only advisors.) Ramsey's gotten a lot of (deserved) flak for that, and for recommending high-load, actively managed mutual funds instead of low-fee index funds.

But. He's getting people investing. If they are investing 15% of their income and losing 5% of that to fees (and by the time they are at this stage they've already paid off debt and built an emergency fund), that's better than investing nothing. It sounds like a false dichotomy, but it's kind of a true dichotomy. For a lot of people there really isn't any other saving/investment advice that is as easily accessible, relatable, and tangible.
posted by mama casserole at 6:55 AM on April 20, 2016 [2 favorites]


We need to be critical of anyone public. I listen to him but am critical. He sells some seminar where he teaches financial literacy based on biblical principles. Um, what?

I tune most of it out.

I think I am like most people without degrees in finance and economics. I don't even understand the sentence mama casserole wrote about mutual funds versus index funds. I do one day hope to educate myself in it, but that day won't come until I actually have spare cash to invest. I've never approached a financial advisor because I'm intimidated and I wouldn't know if I was being conned into something I didn't need. I once bought a whole life policy as an investment because the guy told me I needed it.
posted by archimago at 7:10 AM on April 20, 2016 [2 favorites]


maybe most of the criticism is coming from people who grew up in/are currently in precarious financial situations where they either have much less money than him to fall back on or fell into the situation through no fault of their own (i.e. not bad decision making). Its really hard to feel empathy for a guy who went into debt spending huge sums of money on private education when some of our parents went into debt just to feed us.

Equally, a LOT of the world could look to the people on this thread, the same people who have criticized the writer, as being incredibly privileged with first world (though supposedly crumbling) infrastructure, FREE internet at public libraries (at my old library, one had to pay money to access internet), actual paved roads, homes with proper beds, (homes, period), floors that are not made from dirt, electricity that doesn't cut off at random intervals except when one doesn't pay the bills, clean and sanitized water, access to banks and credit systems, and so forth. It was no fault of these people were born in a poor country.

My point is that there will always be someone poorer than you are, through no fault of theirs either. And if it is hard for you to be less emphathic towards the writer, you only have to look down at the pyramid to see how lucky you are.

If you think the elites/ rich/ wealthy are insensitive towards your predicament(s), or that this writer should not deserve any empathy, only look towards yourself to see how your perspective may seem incredibly insensitive and insular to the rest of the world.

Why, this whole thread and article sympathizes the plight of the American middle class! If it's not the world's smallest violin, it's somewhere close to it.
posted by moiraine at 7:20 AM on April 20, 2016 [3 favorites]


Because I made too much money for the girls to get more than meager scholarships, but too little money to afford to pay for their educations in full, and because—another choice—we believed they had earned the right to attend good universities, universities of their choice, we found ourselves in a financial vortex. (I am not saying that universities are extortionists, but … universities are extortionists. One daughter’s college told me that because I could pay my mortgage, I could afford her tuition.)

I wish more people would really sit down and face the uncomfortable truth of this when their kids are ~16, instead of "of course you can go to Harvard, honey". I can't judge this guy too harshly, because his attitude is so baked into middle class culture. (Although I personally find a little too much blame-shift on the universities here.) But perhaps the greatest gift of my dad taking off when I was a teenager is that I learned that there just was no money. I was smart, I took 7 AP classes, I did everything right. None of it mattered if I got into Fancy School but couldn't pay for it. And personally, my reality of "oh, the school will pay for you if you get in but you're poor!" DID NOT happen.

Anyway. I wish more people would have the hard discussions that no, you can't always go to the college of your choice, and it has nothing to do with whether you've earned it. 16 is old enough to understand the limits of your family's income and start narrowing your choices to things that make sense with it. It's not fair, but that's life.
posted by nakedmolerats at 7:32 AM on April 20, 2016 [7 favorites]


I sympathize with the writer, but surely there is *some* place to say that there is a difference between him and between the people who just don't have the kinds of choices (private school or public school? Cramped co-op in NYC or more space in the Hamptons? 401(k) or pay for your child's wedding?) that he has had? No, he doesn't have much liquid wealth, but he has had the ability to make choices, and he has had generational wealth to fall back on in times of need. Those 2 things separate him from being 'poor'. He has been able to ensure that his children will not be locked into a cycle of poverty. His 'doesn't have a spare $400' (he would have to ask his parents, or maybe his children now that they're grown, or he might have to take a loan against his house) isn't the same thing is someone who doesn't have a spare $400 who would have to pawn their property or go to a payday lender.
posted by matcha action at 7:34 AM on April 20, 2016 [1 favorite]


This discussion is interesting in the context of the LA Boyle Heights gentrification article. There is the suggestion that large-scale financial changes reflect the natural working of things, and people who find themselves on the poorer side of gentrification, for example, will have to suck it up and move on. But people actually have to live through this stuff, still have to eat, and still want the best for their children.
posted by sneebler at 7:38 AM on April 20, 2016


I sympathize with the writer, but surely there is *some* place to say that there is a difference between him and between the people who just don't have the kinds of choices (private school or public school?

I see pretty much universal agreement on this above. Having bad choices instead of no choices is a difference in the degree to which one is fucked, not a difference in kind. I think most people would reserve most of their sympathy for the people with no choices, but it's sometimes helpful to remember that people further up the income / "on paper" wealth scale can be similarly fucked.
posted by tonycpsu at 7:39 AM on April 20, 2016


But I feel like all of the people who are saying, "he's only sort of fucked, he's not completely fucked like these other people" are missing the point that there are a staggering number of people who are fucked to at least some degree and maybe if everyone looked around and said, "Wow, there's a much wider spread of at least some degree of fucked-ness now than there was 30 years ago, wonder if we should adjust some social policies accordingly" we might make it better for everyone. Nobody, including the author himself, is saying that he lives in poverty or that he is not far better off than many. He's saying that the entire scale (except for that little bit at the top) has shifted downward in a way that people aren't realizing - because so many people are stuck either in the arms race of keeping up external appearances or the arms race of "fuck you, you're not THAT poor."

Part of the point of this article is that it used to be the case that if you had one or two professional careers in your family, you had a reasonable expectation of living in a house and educating your children. And that appears to no longer be true. Is it just to be taken as a given that most people won't be able to work hard enough to send their kids to top-tier schools? Do we not see it as a problem that the ratio between university tuition and people's wages has *skyrocketed* over the last 15 years? Even state schools are getting out of reach for many.

If both luck and perfection are absolute prerequisites to success, we have a problem.
posted by telepanda at 7:55 AM on April 20, 2016 [20 favorites]


if everyone looked around and said, "Wow, there's a much wider spread of at least some degree of fucked-ness now than there was 30 years ago, wonder if we should adjust some social policies accordingly" we might make it better for everyone

You're preaching to the choir here ideology-wise, but I don't think you should read people acknowledging the difference in degree of fucked-ness as a sign that they're against social policy aimed at helping people at all levels of the scale. Noting the differences in their situations is a value-neutral observation.
posted by tonycpsu at 8:01 AM on April 20, 2016 [1 favorite]


Ok, so here's numbers, and I think we should be talking about numbers.

I'm making $19.23/hour before taxes. Roughly $40,000/year.

My wife was making $12/hour before she was unceremoniously kicked to the curb thanks to her department being eliminated.

That was enough for us to be pretty comfortable.

Location: San Antonio TX

Rent: $950/month
Food: ~$700/month ($120/week for a family of three, or around $20/day)
Student Loans: $300/month
Internet: $100/month
Phones: $200/month (!)
Two cars: ~$600/month
Electricity: $100/month
Car Insurance: $120/month
After School Daycare: $200/month

And I'm already over what I earn in a month after taxes. We haven't gotten to gas for the cars yet, or the fact that she's got a medical condition that mandates a doctor's visit every month ($100) just to get a refill on her prescriptions ($200 if she doesn't take all of them, around $300 if she does), and of course she doesn't have health insurance so we pay all of that. Worse, her medical condition includes chronic pain, an inability to lift more than a few pounds without risking months bedridden in agony, and basically makes it impossible for her to stand for 8 hour shifts.

Worse, she wasn't a real employee at her last job. Officially she was a temp on 90 day probation, so there's no unemployment to collect.

Cut the phones out? And get no job offers for her, can't get a job without a phone.

Get rid of a car? And have no way for both of us to get to work, because no riding the bus would a) cost a fair amount of money, b) be completely unreliable, and c) take over two hours one way to get me to my job per Google.

Food is really the only flexible item there, and we're eating a lot of rice and beans now, but that won't solve the problem that we need two incomes and we have no idea how long before she gets a new job. She has an interview on Friday, but we're both pretty sure its for one of those sell insurance on commission scams that won't make any money.

On two incomes we were pretty good. Not rich, but able to pay the bills and start paying back some debts, and even enough to start saving a little (I have nearly a whole $270 in savings, yay me, that's enough to not pay all the bills this month).

So there's the numbers for one tale of desperation. What does it take to slip from a modest quasi-middle class life into wondering how to make the rent? One job lost, that's what.
posted by sotonohito at 8:03 AM on April 20, 2016 [12 favorites]


Update on the 8k deductible -- a MeFite has clued me in on how storm damage deductibles work in some states. The short version is that it's entirely possible to shell out 16k in deductibles that quickly. Bad assumption on my part.
posted by michaelh at 8:19 AM on April 20, 2016 [1 favorite]


I think the "he is/he is not poor" thing is a derail (that I regret my participation in).

He's not claiming to be poor. He's claiming to be middle class and broke. And you can claim that he's not actually middle class (because private school, hamptons, and ivies), but even if he's "rich" I'm guessing he's a 10%er, not a 1%er. And the difference in wealth between the 10% and the 1% is staggering -- even in comparison to the difference between the 10% and the 50%.

Here's the thing. Someone with his resources *should* have been able to own a house, put a couple kids through school, and save for retirement. He failed at that, but his family is still doing fine (and, all signs point to them continuing to do "fine"). But people shouldn't need to have his resources to own a house, put a couple kids through school, and save for retirement. And the people who have fewer resources, who make poorly thought out choices like he did? They are a lot less likely to be doing "fine".

And if seeing how someone "like them" is failing at living the dream gets others in the top 10% or above to realize how precarious life is for anyone who isn't independently wealthy, maybe the U.S. can start doing something about building up that safety net again. Or improving public schools so that no one feels "forced" trade their retirement for their kid's k-12 education. Or any number of other things that can help people across the board and don't necessarily need to be means-tested.
posted by sparklemotion at 8:32 AM on April 20, 2016 [15 favorites]


After School Daycare: $200/month

And this is a whoooole other ball of wax. We live in an area where child care is expensive, and we pay over ten times that amount for two children who aren't old enough for public school yet. Yes, we have forked out for the fancy private preschool for age 3-6 [we have no public preschool and public kindergarten is only half day], but we have also cost-averaged by using a home daycare from age 0-3 with rock-bottom prices that are half of what the big centers charge.

Currently we have one child in daycare and one in preschool. I would estimate that it costs $3000/month to have a 2 year old and a 5 year old at the corporate chain daycare centers in the town where I work. This is not for extra-hippie over the top preschools like it's popular to snark at. This is bog-standard chain daycare.
posted by telepanda at 8:33 AM on April 20, 2016


And soon it'll be summer. Which means, assuming my partner has a job by then and we haven't been evicted and forced to abandon all our possessions and drive 8 hours to go sleep in the spare bedroom at her mother's house (thus abandoning my job and forcing us all to start over in a new place), that we'll be paying a **LOT** more for daycare over the summer. Around $150/week. $600/month. $1800 or so for the whole summer.

And I'll be the first to admit that my daycare costs are low. Our kid is 9, only a couple more years and he'll be able to take care of himself over the summer and after school, and we lucked into a program that is both pretty good and not that expensive.

So yeah, daycare plus the fact that there's not public transit worth talking about in my area combine to cause a lot of financial stress.
posted by sotonohito at 8:45 AM on April 20, 2016


Currently we have one child in daycare and one in preschool. I would estimate that it costs $3000/month to have a 2 year old and a 5 year old at the corporate chain daycare centers in the town where I work. This is not for extra-hippie over the top preschools like it's popular to snark at. This is bog-standard chain daycare.

Yep! My wife and I are expecting our first kid and the first real I've made a terrible mistake moment was when I started pricing daycare. $400/week with a 12 month waiting list for infants? Sure! That's a totally ordinary daycare. We found a place for $300/week that had room, but I consider us very lucky in that regard.

We've been lucky at basically every step: my wife found a new and better job while pregnant, I've got a good job, and we've got family support, but at any step it could have failed. My wife's old job barely covered the cost of daycare and she'd have been doing it essentially to avoid a resume gap and not go insane in the house all day. Having twins would have forced her out of the workforce entirely. Losing her job (in three months) would probably mean cutting out daycare, going to the back of the line, and losing the flexibility to have her working. We're very comfortable people, with almost a years worth of cut to the bone living expenses in savings, a 401(k), and an income around the upper quintile, but we could be undone by basically one or two things very easily.
posted by Bulgaroktonos at 8:45 AM on April 20, 2016 [4 favorites]


This whole thread is a depressing reminder of how pervasive the impulse to divide the victims of economic misfortune into "deserving" and "non-deserving" categories is, even among good, self-identifying left-liberals. If we start means-testing everyone for signs of privilege before deigning to extend our empathy, then it's a race to the bottom where ultimately no one wins.
posted by Sonny Jim at 8:46 AM on April 20, 2016 [22 favorites]


One thing I've learned is that you just can't tell someone's financial situation at all by looking at them. At one point, my ex and I were both working full time, both driving BMWs, renting a beautiful townhome in the suburbs, wearing brand name clothing and eating at fancy restaurants. We also had thousands of dollars in credit card debt and student loans and back taxes. I'm not saying we made good choices, but anyone looking from the outside would never expect that we worried about paying bills.

After I left him I lived really frugally for a year and paid off the part of the debt that was my responsibility. I'm now debt free and insanely paranoid about having a few months salary in the bank because I never want to feel that precarious again. And you could not tell my salary or how much I have in the bank by looking at me - inexpensive apartment, driving an American car (BMW was totaled), eating at home or at cheap restaurants (I do have an iPhone though, my main luxury).

Obviously there are some serious structural problems in society but I also think attitudes need to change. We need to stop judging others on appearances and reject the marketing that tells us we need the latest X to be cool. That's part and parcel of capitalism though - it always needs to create new markets - so I guess it always does come back to structural problems.
posted by AFABulous at 8:54 AM on April 20, 2016 [5 favorites]


No one can understand our decision, not even when we explain it to them, not even our friends working in finance or who are financially-literate.

I think my entire lifestyle has been built on the strength of my general indifference to a couple of those Middle Class goals mentioned in the article, homeownership and a car-per-person household. I mean, if homeownership turned out to be a good financial deal (and sustainable in reasonably-expectable crises), I might buy a house. But it's not something I aspire to, it's not part of my identity. Same with cars. It always surprises me that so many Americans are so deeply invested in homeownership. Even in some wealthy European countries, the homeownership rate is considerably lower than in the U.S. It may be attractive to any given person for any number of good reasons--I'm not disputing that--but I don't get how it's fundamental to one's middle-class identity. It seems as though so often it serves as a trap rather than a ladder up. The article author would unquestionably have been better off renting. Even when he tried to seriously change his lifestyle by moving somewhere cheaper, which is the only rational response to his deteriorating financial situation, he was still saddled with those extra mortgage payments. I'm not saying this to blame people who want a house, but I am saying that, these days, freedom requires either a startlingly large salary or the willingness to push back on some cultural expectations concerning how you spend your money. (And even then you need luck, health, etc.! But without one of the first two, you will always be vulnerable.)
posted by praemunire at 9:07 AM on April 20, 2016 [4 favorites]


Elizabeth Warren, again: Americans are not going broke over lattes!

Review of Stephanie Coontz's "The Way We Really Are": "What people really miss about the so-called Golden Age of the 1950s, Coontz points out, is an economy that supported unprecedented growth in real wages."

Yes, people make bad financial decisions. Some of these bad financial decisions will drag down someone's life - a life that would have been more secure if those decisions hadn't been made. I am in favor of teaching financial literacy and making basic financial concepts easily available to everyone - because God knows our parents don't always do a good job of this!

(I think that the worst decision was not to drain the retirement account to pay for the daughter's wedding, but to have his wife stay at home while the kids were already in school. I'm sure there was a reason, but, now the wife can't find work at all, and if she did have work, the author and his wife would be in a better situation.)

But. Middle class Americans like this author aren't fucked on such a wide scale because they all sip lattes and own iPhones. And for many people, owning a suburban home can be cheaper than renting a city apartment; city living has gotten SO very expensive in the past five or so years that I can't blame people for wanting to own a home, if for no other reason than they won't risk eviction.

What used to be, up until about the 1980's or so, fairly easily obtainable for a wide swath of Americans, the Old Economy Steves who worked hard at ordinary jobs (at least white Steves!) - home ownership, sending kids to a decent school, and college if possible, having good health care, living on one income - are now luxuries for the rich. I don't like this. Housing, school, and health care shouldn't be luxuries! I want Eisenhower-era levels of taxation so we can have a UNIVERSAL BASIC INCOME, Medicare for all, and better schools, the better to unfuck our lives so that we don't have all these people hanging on by their fingernails to a decent quality of life.
posted by Rosie M. Banks at 9:24 AM on April 20, 2016 [9 favorites]


praemunire: It [home ownership] may be attractive to any given person for any number of good reasons--I'm not disputing that--but I don't get how it's fundamental to one's middle-class identity.

Cultural things like this have played a big part in self-limiting of population growth in the past. "You're not ready to have kids until you have ___[insert noun or verb: "a house", "a job", "gone through initiation"]___" will, in difficult times or times of high inequality, push the average age of first childbearing up toward 30. But this limits population growth mostly among the middle and poor, since they are the ones who'll have the hardest time reaching the cultural threshold for "you're ready to have kids." And that leads to the nastiest debate of all: Who "deserves" to have kids? Who "shouldn't" be having kids? The answer, for those asking, is that it's people who don't meet the markers that a culture has set. Home ownership is a major marker for that in Canada and the US, and there's social blowback if you have kids without having a house.
posted by clawsoon at 9:44 AM on April 20, 2016 [3 favorites]


I know this isn't askmefi or /r/personalfinance, but this is like waving a red flag in front of a bull...

Rent: $950/month
Food: ~$700/month ($120/week for a family of three, or around $20/day)
Student Loans: $300/month
Internet: $100/month
Phones: $200/month (!)
Two cars: ~$600/month
Electricity: $100/month
Car Insurance: $120/month
After School Daycare: $200/month


$200/month for two phones is very high. I was using Tmobile's 40 per month plan, and just switched to Google Fi's cheapest plan at 30 bucks a month. Internet is high as well; I just switched to about 50 bucks a month for Comcast internet, no TV, no phone.

Cars are difficult. Ideally you'd want to only have one car loan active at a time, and rotate whose car is in payment between the two of you, but that's difficult to accomplish in the short term. But the good news is that these loans have an end date shorter than the lifespan of the car. Car insurance is another common big spend. If you haven't done so recently, shop around. Look at different types of insurers; within a category they tend to be competitive, but some categories may need you in their risk pool more than others.

Daycare is always expensive; only thing I have here is to make sure you are using a dependent care FSA , which in your brackets is somewhere between a 15 and 25 percent discount. Same goes for medical expenses you described. And while you're at it, review your withholdings to see if you can free up any short term cash flow. If you got a big refund this year, that's a good sign you should redo your withholdings.

Student loans have various income based repayment plans that help reduce your monthly payments.

Finally, sorry for the rough patch you're going through. I recognize the stress of budgeting is not fun when compounded with job hunting. Just remember a year from now, when things are going well, that you should revisit the topic and figure out your retirement savings strategy.
posted by pwnguin at 9:49 AM on April 20, 2016 [1 favorite]


I never imagined myself to be a homeowner--and it still sits uneasy with me, but mostly because I tend to be restless by nature--and wouldn't have ever bought a home if it weren't for my husband's infinitely better paying job and his desire for one. His background is the sort of seeing a home as financial security, a good investment. This is a marked contrast to my background, where an owned home was desired but we always rented because we were unable to afford one. (My parents did finally buy a home once my sister and I were out of the house, but much like a lot of the stories in this thread, it depended on a dual income. When my dad was diagnosed with Parkinson's and was unable to work, they could not afford it anymore and it was foreclosed upon.)

Do I personally see my home as a safe investment? Some days, yes, some days, no. I mean, I don't live in a hot market so maybe that puts us in a better position. The monthly rent we were paying when we first moved here was more than our monthly mortgage payment--Kingston rents are stupidly high because of the university--so it made sense to purchase a home. I still wonder sometimes, though. I really do. I add it to my list of so many worries I have.
posted by Kitteh at 9:51 AM on April 20, 2016 [1 favorite]


We bought (a big, cheap, crumbling Victorian with holes in the walls) because we both want and need to lead a car-free life (co-owner can't drive) and we could see ourselves getting priced out of the city pretty fast. Rents are absolutely mad here compared to what they were a few years ago, and they're probably not going to fall any time soon. Our other choice would be to rent in the middle-ring suburbs, but then we'd have to have a car, and we'd have the difficulty of getting co-owner to work. And we'd move so far from our friends that it would basically cut us off entirely from everything we care about.

The thing I really fear is losing the house through some setback and having to move far, far out of the city to find anything we can afford - especially when we're older.

Anyway, it sure wasn't "fetishizing home ownership"; it was "living within a few miles of work, groceries, doctors, etc" and "living around people we care about".
posted by Frowner at 10:19 AM on April 20, 2016 [11 favorites]


pwnguin: I'm applying for flexible student loan payments right now, actually.

We had only one car payment, then both of us were making very good money and the non-paying car suffered a catastrophic failure, now we have two car payments that we were handling just fine while my partner was employed, but which are seriously hurting us now.

Phones we may need to look at changing plans on. Right now that includes data because they're smart.

Again, the situation was perfectly fine (even allowing debt repayment and some minor savings) while we were both employed. But while we had two jobs we expanded our spending, and now that it has turned into one job, we're stuck.

You can argue that when we had two jobs we didn't make choices optimized for minimal spending and maximum savings, I'd agree. I'm not at all sure that failing to chose to live minimally and save maximally is really a moral failing or a bad thing. Again, we were hardly living extravagantly or outside our means during our time of dual employment, our non-student debt is zero, we didn't buy luxury cars or items, we didn't go on extravagant trips. We just, you know, lived in a fairly modest middle class sort of way. I don't think that's exactly wrong.

I'll also add that my reflexive defense here of my finances is why more people don't talk about theirs. I know you weren't exactly trying to be mean or aggressive here, but putting me on the defensive when I'm wracking my brains trying to figure out if we have anything valuable enough to sell and make the rent this month isn't exactly helpful.
posted by sotonohito at 10:23 AM on April 20, 2016 [4 favorites]


This whole thread is a depressing reminder of how pervasive the impulse to divide the victims of economic misfortune into "deserving" and "non-deserving" categories is, even among good, self-identifying left-liberals.

This is true, but there is still room, I think, between empathy and recognition that this author had the potential to make other choices (as I said above, the choice not to act as if his children could/should go to the college they wanted, without a clear-eyed look at their finances) -- choices that many people don't even get to make. I don't wish harm upon the author now, and I sympathize with his economic condition. But I wish his article had a little more imploring others NOT to make his mistakes. He laments that what Americans like to think of as "rough patch" is likely to be many adults' lives. And yes, it is noble to demand that college be more affordable and etc. for everyone. But in the meantime, I wish he would use this piece to say "please be realistic with your kids about what kind of college/wedding/etc support you can give without bankrupting your own future". It's hard. It's shitty. No one wants to give their kids less than what they got.
posted by nakedmolerats at 10:24 AM on April 20, 2016


Oh, and the answer is no. I don't have anything that I could sell for even $200. Nothing. Not one damn possession I could get rid of to raise even $200.
posted by sotonohito at 10:24 AM on April 20, 2016 [1 favorite]


I'm on your side sotonohito and thank you for sharing. I keep trying to write out our issues because I think they are common and I think that life is goddamn fucking complicated but then I erase it because I don't need people armchair-ing what our expenses are.

Basic financial literacy? Check! Now, tell me how much I should be spending on education for our child, how much for my house, how much into retirement, how much into 529 accounts and how much...how much...how much.... It's endless and we are being squeezed. All of us. If you're someone who feels comfortable, well great then. You are either the most financially literate, the luckiest, or your turn hasn't come yet.

I had an intriguing dream the other night. I dreamed that I had been diagnosed with some odd ailment and my first call went to my accountant to see when I should declare bankruptcy strategically. In the light of day, I thought, whoa...not a bad idea.
posted by amanda at 10:32 AM on April 20, 2016 [4 favorites]


On two incomes we were pretty good. Not rich, but able to pay the bills and start paying back some debts, and even enough to start saving a little (I have nearly a whole $270 in savings, yay me, that's enough to not pay all the bills this month).

Please, please look into whether you are eligible for an income-driven repayment plan on the student loans, starting here. Doing some very rough calculations just from what you've said (so don't rely on it), it looks as if you might be eligible to bring your monthly payments down a decent amount. The process is actually fairly straightforward these days, and it's free.

Home ownership is a major marker for that in Canada and the US, and there's social blowback if you have kids without having a house.

I really don't want to sound like the chorus of "How DARE you think you're entitled to xyz basic comfort of life?" I find the "live like no one else now so you can live like no one else later" crowd often deluded. But, allowing for some local variation which I fully concede exists, renting doesn't need to, in itself, reflect a low standard of living. There are in fact whole cities in the U.S. where the idea that it's not appropriate to rent with kids isn't a middle-class belief (I live in one). Now, I fully appreciate that you can't simply live in defiance of the norms around you, unless you're a gazillionaire or ready to wander the earth barefoot for the rest of your days. But I hate to see people getting sucked onto the treadmill of homeownership if it's going to put serious financial stress on them. You have to figure out where to draw the line. Especially when so much of the pressure to buy is not genuinely a product of community values but rather artificially manufactured by entities who do not have your interests at heart.
posted by praemunire at 10:35 AM on April 20, 2016


Everyone's housing calculus is different. For us, it was:

1. We are living in the city, but rents are skyrocketing and we're being priced out.
2. If I move a town over, the rents are better but the apartments are awful.
3. Hey look, the apartments may be awful but you can buy a house in this town that isn't bad!
4. Also it's 2009 and the government is desperate, have an obscene tax credit!
5. We buy a house.

It's crazy because I don't actually love the idea of owning a house. On the other hand, rents since 2009 have continued to go vertical and it's now actually impossible to get an apartment in the city where i work, so yay?

This information isn't terribly novel but the idea is that you can't actually judge a person's decisions unless you exist in their circumstances.
posted by selfnoise at 10:37 AM on April 20, 2016 [4 favorites]


amanda: Now, tell me how much I should be spending on education for our child, how much for my house, how much into retirement, how much into 529 accounts and how much...how much...how much.... It's endless and we are being squeezed.

One right-wing mantra is that if we all manage our own retirement savings instead of letting the government do it, we'll all be so much better off because we'll be able to focus on exactly what's best for us, and we'll be super-motivated to get the best possible results, which will be so much better than having some lazy, uncaring bureaucrat do it for us.

What that misses is exactly what you point out: Financial planning can be overwhelming, so most of us won't do a good job if we do it ourselves. That's why I'm glad to see, in my own province, the government making government pensions much bigger.
posted by clawsoon at 10:42 AM on April 20, 2016 [4 favorites]


I really don't think people who blow lots of money on a wedding do it for the quality of the experience.

This is a weirdly judgmental non sequitur. You could say that about anything that costs a lot of money. "I don't think that people who spend money going to Paris do it for the quality experience... they just want to make people jealous of their Instagram feeds. Luxury cars aren't fun to drive, they're purely status symbols."

We spent an egregious amount on our wedding, considering the smallish size of the guest list, and I have zero regrets even though we're divorced. It definitely was the best quality experience of my life (and I had already been to Paris and was driving a luxury car at that time). I would love to be in a position to "blow" that much money again on an experience that nice.

Anyway, it's just weird to judge other people's expenses, especially when they're not asking you for money. Or your opinion.
posted by AFABulous at 10:43 AM on April 20, 2016 [2 favorites]


we could see ourselves getting priced out of the city pretty fast. Rents are absolutely mad here compared to what they were a few years ago, and they're probably not going to fall any time soon.

The serious question is whether you will actually benefit financially from home ownership. Though he doesn't give the numbers explicitly, it sounds as if the article's author did not, because he ran into one of the very real risks. The math is much more complex than many people (obviously not commenting on you personally) realize going into their mortgage, and then there are the risks (such as inflexibility of housing cost, which is what bit the article's author) that it's very hard to price because they're very hard to estimate on an individual basis.

Anyway, my point is not that wanting or buying a house is bad, it's that viewing it as a cornerstone of a middle-class identity, something the article explicitly discusses, is a trap, especially in today's economy. Precisely because it is often (not always) not necessary to maintain a comfortable standard of living. If two people work in a household, two cars can quickly become a practical necessity, especially if there are kids. So you need two cars: fine. And everyone who has a car should have one that is functioning and safe. So you really do need those expenditures to maintain a reasonable lifestyle. But, in many though not all circumstances, you don't need a house to live well, and, in fact, the house may cost you dearly. The number of people who got financially slaughtered due to "encouraging the dream of homeownership" in the 2000s is terrifying.
posted by praemunire at 10:48 AM on April 20, 2016 [1 favorite]


(as I said above, the choice not to act as if his children could/should go to the college they wanted, without a clear-eyed look at their finances)

It's also easy to see Harvard and make assumptions. I know the author says it wasn't true for him, but for me (middle class family) the price difference between my elite private college and the in-state college I would have otherwise attended was marginal, and the basic cost of attendance at that in-state school is now more than I ever paid for my private school ten years ago.
posted by Bulgaroktonos at 10:55 AM on April 20, 2016 [2 favorites]


The attitudes about paying for children's educations are very interesting to me because I grew up with a very different take on it than many in this thread: My parents were immigrants and showed up in the US with two children, a couple of suitcases and the world-class educations in their heads. They drilled into us that we would get the best educations we had the aptitude for because in their minds an education is the only thing a tyrannical government (a truly tyrannical government, not the kind of disagreeing-with-the-party-in-power we wring our hands about in the US) can't take away from you. They paid for me to go to a top 20 university, and I am so grateful for it. I know they sacrificed a lot to make it happen, so I have tried to use it to its full advantage.

I know that there are good reasons people approach paying for their kids' educations in other ways. But people come to their decisions with the whole depth of their experiences, and sometimes what looks like a decision to keep up with the Joneses is coming from somewhere else entirely.
posted by antimony at 10:57 AM on April 20, 2016 [10 favorites]


the idea is that you can't actually judge a person's decisions unless you exist in their circumstances

Look, there is very recent history indicating that many people make economically irrational decisions when it comes to homeownership. Like, millions of people. Like, financially ruinously irrational. I can look at the housing decisions of a lot of people who lost their little all and had their credit ruined and say that they were injurious to those people (which is not the same as saying that they deserved to have it happen to them) even without being in their circumstances. I think there is plenty of objective evidence for the argument that making homeownership a cornerstone of middle-class identity (as discussed in the original article, which is why I'm even talking about it) has been harmful to many, many people. I mean, I'm kind of running out of ways to say "yes, any given individual may benefit from buying a house, but making it some kind of fundamental aspiration of middle-class society puts harmful pressure on people to spend money that they may well not have to spend to live a decently comfortable life," so I guess I'll shut up now.
posted by praemunire at 10:58 AM on April 20, 2016 [2 favorites]


Man, it's jerkish to give unsolicited advice to someone who laid out their financial situation. I am sure every single person in this thread could do something better. There's probably a reason no one else itemized their income and expenses. Thanks, sonohito, for being willing to be vulnerable.
posted by AFABulous at 11:00 AM on April 20, 2016 [11 favorites]


The place I really fell off the train in the article was where he talked about how he got a book advance, and then "couldn't" pay the taxes and is now deeply in arrears and penalty and interest.

He claimed this was because he had to pay living, groceries, etc., and that this book advance was supposed to last for years to do so. What this means to me is that the book advance was very large, let's say $1M. As income in a single year, it gets taxed heavily, probably close to 50%.

I think his mental math went: $1M for 4 years, no problem! But in reality, it was $500k for 4 years. That's a big, big misunderstanding of what your income actually is, and of course other mistakes follow.

My perspective is from the .... let's say 5% now. I earn a bunch, I am married to a similar earner, we live in a low cost area, have no kids. We're fine. But it is my fucking civil duty to pay taxes, man. The taxes I pay ARE the social safety net that I want to see. Yes, I take advantage of the tax shelters available to me (401/403b, Roth, mortgage interest). But I believe in a federal safety net (etc etc), and that must be funded through taxes. My taxes. I'm completely good with that.

So it killed me to read that he got to refi through the HAMP .... supported by taxes he just plain refused to pay.

All the other choices, wedding, Stanford, etc., well, those seem much more like judgement calls that I can be more or less judgemental about, but .... taxes, man. Pay your fucking taxes. Especially before you start talking about a safety net.

Taxes are what we pay to live in civilized society.
posted by Dashy at 11:10 AM on April 20, 2016 [12 favorites]


Please don't jump too hard on praemunire. The unsolicited criticism of spending wasn't what I was after, but is I think somewhat unavoidable and inevitable. You see a bad situation and you start trying to figure ways around or out, I don't think they were doing that in bad faith or in any effort to make me feel bad.

That said, yes, the inevitable criticism is doubtless a significant factor in why more people don't talk about their finances.

That and the American belief that talking money is gauche.

I think we'd all be a lot better off if more people were willing to talk honestly about what they make and how they spend it. It'd at least give us a better baseline for how we do what we do.
posted by sotonohito at 11:10 AM on April 20, 2016 [6 favorites]


Bulgaroktonos, yes definitely. I actually had a similar experience, and was lucky to go to a very good school for actually less loan money, overall, than what the state university offered me. But still.... if what that means is that one can't afford the state university, either, then definitely agitate for cheaper public tuition, but again... be honest with oneself and the kids. If one can't afford to send their kids to college without getting in the situation the FPP author is now, then one can't afford to send their kids to college. Broadly, that is not a fair situation; it's one that I wish was not the case.
posted by nakedmolerats at 11:13 AM on April 20, 2016


We're seeing a similar situation in France, where the economy has recovered but the middle class is being choked because all the profits are going to the 1%. In the last eight years, the vast majority of people have either not had a raise at all, or had a single 1% or 2% raise. The differences being socialized healthcare, governmental aids for childcare, and widespread public transportation that's also partially reimbursed... if you're employed.

I'll go ahead and itemize my income and expenses. For comparison, I'm in the top 20% of French household incomes, and I am single. There are families of four who live on less money than I make. I don't know how, but seeing people's cars and clothes, it's pretty easy to make an educated guess: they're holding on to cars for as long as they can and buying the cheapest clothes they can find.

Monthly income after all taxes (healthcare is included): 2100 euros
I still own an apartment in Nice that I've been trying to sell for two years, since being transferred to Paris. The housing market down there is fucking awful for sellers: prices are at year 2000 levels and buyers all want properties to be perfect, pristine, and cheap-as-possible. I have a lovely catch-22: I can just barely eke by paying the mortgage, and cannot afford to sell it at a price it would actually sell, because I wouldn't qualify for a loan to pay off the difference. Trying to rent it out has been very blah so far, but just yesterday a friend said he's seriously considering it, and he's an honest sort, so fingers are crossed that I may be able to breathe someday.

Nice mortgage payments: 700/month
Nice building management fees: 120/month
Paris suburb apartment rental: 860/month
I qualified for this rental because I'm in financial difficulty due to the place in Nice. Thank you government aid. This is really, seriously reasonable rent here.
ADSL internet with home WiFi: 30/month
Phone (3G/4G unlimited everything): 32/month
Insurance on both apartments: 40/month
Public transportation: 70/month unlimited usage of Paris trains/metro/buses

As you can see, we have not yet reached food or clothing and are already at 1852 euros a month, leaving me 248/month for sundry expenses. Cat food costs about 48/month, so we're down to 200. Let's just say I haven't bought new clothes in two years and leave it at that.

Solution? The only one I have is to look for a new job to up my salary. Trying to do that without being able to buy clothes, shoes, or pay for a decent haircut (I cut my own hair, do I have the choice?) is loads of fun, let me tell you.
posted by fraula at 11:19 AM on April 20, 2016 [7 favorites]


I've probably made as many dumb decisions as the author, but in the long run, I ended up being able to afford them. I honestly can't say I'd have made better decisions if I had less money. Being more poor would definitely make me more afraid, but I doubt it'd make me any smarter.

I have weird, mixed feelings about all the judging. I remember the discussion about this guy a couple years back who had the money quote: "At the end of all this, we have less than a few hundred dollars per month of discretionary income."
posted by klarck at 11:47 AM on April 20, 2016 [1 favorite]


fraula, like me you seem to be in one of those "except for this" type binds. Except for the house in Nice you'd be ok. Except for the second car I'd be, well, better anyway. I suspect a lot of us in tight spots are in tight spots for reasons like that.
posted by sotonohito at 12:21 PM on April 20, 2016


Sotonohito, there's just nothing to criticize in your budget. Your expenses are all perfectly reasonable to start with.

If you need to cut them down further, the things that might be easiest to do that with are internet/phone, car insurance, doctors' bills, and student loans.

The loans you may qualify for some kind of forbearance while your income is down.

Doctors' offices will sometimes put you on a payment plan while your income is down. It's worth asking. If you haven't already checked, a lot of drug companies provide "copay assistance" or coupons or stuff. I use Advair which should have a copay of $50/mo but, someone told me to go check on their website and voila, anyone with an email address prints a coupon so the copay is $10/mo. Which is really penalizing poorer people who aren't "in the know", in terrible ways. But it's there.

Car insurance is worth shopping around, not because you're obviously overpaying, but because companies bump up rates on continuing customers every year, and inertia keep you there, so it might be worth just some comparison shopping, where another company will give you a better deal just to steal you. Some people do this yearly, just like cable providers, and they're probably right. Pain in the ass, but might help.

If you can live without home internet for a while -- just using phone internet, and hotspot to your PC if needed -- that would be a big help. And, depending on your use patterns, the many alternate MVNOs these days are a lot cheaper (like car insurance, it's too easy to just keep paying the same rate, but when you shop around, whoa, savings). I just gave up my unlimited line a few months ago (I don't use that much data, and hardly ever talk), so went from $90/mo with Verizon to $30/mo with PagePlus. So there's some potential squeezing to do there, if only temporarily.

I feel for you, and will hope that another job comes along soon. I'm not meaning to criticize in any way at all, just hoping to share what I know in ways that might help.
posted by Dashy at 12:23 PM on April 20, 2016 [1 favorite]


Can we just assume that people posting in this thread have access to the internet and knowledge about how to lower bills?
posted by Lyn Never at 12:31 PM on April 20, 2016 [13 favorites]


The underlying point of the thread is that not everyone knows everything, all the tricks, everywhere about personal finance? Sheesh. Sorry I tried to help.
posted by Dashy at 12:37 PM on April 20, 2016


This is part of what the article was talking about, I think, one of the reasons that we don't talk about personal finances: People feel judged.
posted by clawsoon at 12:41 PM on April 20, 2016 [1 favorite]


I think we'd all be a lot better off if more people were willing to talk honestly about what they make and how they spend it. It'd at least give us a better baseline for how we do what we do.

I know Suze Orman come under fire, but one thing I learned from her that will forever stick with me is "Lies destroy money." Someone upthread (sorry, too much to go back through) spoke about planning a vacation they know they shouldn't be taking because of finances, and it's the same concept.

I had to internally get over the shame of saying to friends and family, hey guys,we can't join you for dinner at that restaurant, we just don't have the money right now. But come over to our place for dessert and Boggle!

It's quite liberating to live in your financial truth, and we haven't lost a single friend because we haven't been able to vacation with them or go out to fancy dinners with them or can only afford a small gift at a wedding.
posted by archimago at 12:44 PM on April 20, 2016 [9 favorites]


Umpqua Bank is doing this Podcast, "Open Account," and what sucked me in is the premise that we need to be more open about money and talk about this stuff publicly which is also what the author of this article has done. I haven't listened to too many episodes but it is really refreshing when I do make time to listen to an episode to hear people talk about their personal finance.

One right-wing mantra is that if we all manage our own retirement savings instead of letting the government do it, we'll all be so much better off because we'll be able to focus on exactly what's best for us, and we'll be super-motivated to get the best possible results, which will be so much better than having some lazy, uncaring bureaucrat do it for us.

This whole premise makes me smolder with rage. Flames...on the side of my face. You know who really believes this? The very young who have no experience with anything and those who think they know everything and they are 100% rational actors who are just the smartest guys in the room. We are supposed to manage our own retirement savings by gambling on the "free market," right? And the results of this gamble are truly transparent to us, right? We know exactly what the fees, returns and taxes are? I have ROTH accounts, Traditional IRAs, 401(k), two 529 accounts. I also have two banks, both credit unions. I have credit cards, a mortgage and two car loans. I also have a financial advisor who is not fee only because I couldn't get any "fee only" advisors to talk to me. I have a new accountant who we paid for the very first time this year because I need help to make these financial decisions and the deck seems stacked. So far I love her and feel like she's the only advisor who can help cut through some of this stuff, at least on the taxation side.

I am really great at personal finance. I can talk you through a budget and strategies for the day to day but it's the macro stuff that I have trouble with. My husband and I did some calculations to figure out a variety of refinance options so we could try to figure out what is "best for us" in the long and short term with our home. It took a number of conversations over the course of a month or so, talking to a broker (does he have our best interest in mind?), talking to our lender (they were useless because there's no money in giving us good advice), researching how to calculate the various options, spitballing what the fees might be and then making a spreadsheet which took a half day. We totally learned a lot. The best possible option seems to be take a higher payment now for a shorter term and save a bundle over the life of the mortgage. But, what if something changes in our financial situation and the higher payment becomes untenable? Boo-hoo, guess I didn't take my own financial interests to heart or have enough financial literacy to predict the future and cover all scenarios.

I *do* have my best interests at heart. There are systems, and corporations, and individuals who are mobilized against me and also are clever at using my self-interest against me. And honestly, my self-interest goals are pretty meager. Like I suspect most people's are.
posted by amanda at 1:08 PM on April 20, 2016 [10 favorites]


Talking about money realistically will never become popular if people aren't allowed to discuss the particulars of budgeting. Suggesting an improvement isn't an attack in gardening or auto repair.
posted by michaelh at 1:38 PM on April 20, 2016 [1 favorite]


Hmmm. I'm giving thought to finding a way (free since I'm not just flat broke but rather concave) to set up a website where people can anonymously post their actual financial situation. Location (at least roughly to preserve anonymity), employer (or at least general field), income, taxes paid, rough monthly budget, etc.

Maybe it'd help start a conversation we desperately need to have.
posted by sotonohito at 1:40 PM on April 20, 2016 [5 favorites]


Can we just assume that people posting in this thread have access to the internet and knowledge about how to lower bills?

Literally, it was a significant part of my job (and a bigger part of the job of some people sitting near me) until very recently to try to make people aware of the student-loan repayment options available to them. A lot of people don't know about these programs, or think they must not be qualified because they're not dirt-poor. They've only been around in current form for about ten years, and they've changed their offerings approximately once every 2.5 years or so. But, sotonohito, if I offended you with my suggestion (I wasn't the one who did the detailed suggestions about your spending, just provided a link for the repayment plan application website), I'm truly sorry.
posted by praemunire at 1:56 PM on April 20, 2016 [1 favorite]


Its ok.

I think maybe the site I'm thinking of should have a wiki on bill lowering too.

I'll be honest, if I hadn't gotten an email from the government last week advising me of my options for lowering student loan payments I would't have known it was possible until you linked to it.
posted by sotonohito at 2:01 PM on April 20, 2016


sotonihito I believe I've seen people direct each other to the Mr. Money Mustache forums for exactly this purpose. Although I know that MMM can be a bit...much (there was a big thread on the blue about this awhile back) I've heard that the "post your scenario on the forum and get help" can be reasonably helpful.
posted by telepanda at 2:24 PM on April 20, 2016


It isn't about if he's *poor*. He omits his annual income from this depiction, but this is a rough sketch of a person who may see himself as socially middle class, but undoubtedly makes a significant amount above the NY state median income of around $58,000 per household via the Census, by *himself*. I get that people are heavily judgmental of the poor and their life choices, but have the voices of the middle class been shut out of the narrative as well? Sometimes a personal story is illuminating, but sometimes... interviews are better.
posted by Selena777 at 2:28 PM on April 20, 2016 [1 favorite]


Hmmm. I'm giving thought to finding a way (free since I'm not just flat broke but rather concave) to set up a website where people can anonymously post their actual financial situation. Location (at least roughly to preserve anonymity), employer (or at least general field), income, taxes paid, rough monthly budget, etc.

Maybe it'd help start a conversation we desperately need to have.


Isn't anonymity the problem, though? Or at least, anonymity doesn't solve the problem that talking about money in the real world, face-to-face with people you know is still taboo. I can go to any number of websites and see to-the-penny breakdowns of strangers' spending, but that doesn't really open the conversation in a meaningful way beyond the abstract "some people are financially comfortable, while others are barely scraping by" which is self-evident.
posted by mama casserole at 2:29 PM on April 20, 2016 [1 favorite]


That could be nice too. Mostly what I was thinking of though was more a database of shared money experiences. How *does* a person live on $X in LA, or Amarillo, or DC, or Paris, or Tokyo, or wherever? Where does the money go? What sort of life does a person working as a teacher/tech/secretary/lawyer/etc really lead?

We learn so well by seeing what others do, but when it comes to economics we keep ours often more private than we keep our sex lives. That seems self destructive.

And, despite the promise of various sites, I've never yet really found any site that gives much information on actual cost of living. They'll rank cities compared to other cities, but what does that mean? What are the units? How does that actually translate into living and buying groceries?

Knowledge is power, and we keep ourselves in the dark about each other's financial situations. I can't help but think that more openness in this would be healthy and beneficial.
posted by sotonohito at 2:32 PM on April 20, 2016 [1 favorite]


"But this limits population growth mostly among the middle and poor, since they are the ones who'll have the hardest time reaching the cultural threshold for "you're ready to have kids."

I believe this is a cultural threshold that the poor do not really have, because it is so impractical. Their threshold is graduate H.S., which puts you at an okay health/maturity intersection, but at an economic disadvantage. That factor and choosing a partner that may not be able to adjust to the changes that the early-mid twenties involves often contributes to fewer marriages, but decent population growth.
posted by Selena777 at 2:42 PM on April 20, 2016 [1 favorite]


The best possible option seems to be take a higher payment now for a shorter term and save a bundle over the life of the mortgage. But, what if something changes in our financial situation and the higher payment becomes untenable? Boo-hoo, guess I didn't take my own financial interests to heart or have enough financial literacy to predict the future and cover all scenarios.
posted by puddledork at 4:37 PM on April 20, 2016


Whoops, I was copying a quote and hit the PASTE button prematurely.

Inability to predict the future is a crucial issue. Neil Gabler couldn't predict his income from year to year and was blindsided by the issues of needing approval from the condo board to sell his condo. In the US, Social Security is better in many ways than self-managed 401Ks because most of us don't know if we will live for 3 years or 30 after retirement. The "right" amount to save, if one can save, varies wildly.

(In your mortgage scenario, I think one can semi-outsmart the system by taking the long loan with the low payment and then voluntarily making the larger, shorter mortgage payment every month, baring disaster. Then if disaster strikes, one can drop back to the lower amount and not be bleeding money as rapidly.)
posted by puddledork at 4:42 PM on April 20, 2016 [3 favorites]


There is a huge component of rent-seeking here, which includes lobbyists preventing competition. It's simply amazing how American companies extract so much money for services whose marginal cost is so negligible.

I spend 2 euros per month on my mobile phone here in France, unlimited texts probably, not much data, maybe one hour voice, maybe more, enough for my needs*, and all international free. It'd probably cost $20-40 in the U.S. depending upon coverage and dropping the international. I think 10 euros would get me unlimited everything.

* I avoided owning a phone for the previous year, mostly as an experiment, but I'm stationary enough now that avoiding it offers less. I mean it when I say modest though and they do up sell many people.
posted by jeffburdges at 6:13 PM on April 20, 2016 [1 favorite]


And, despite the promise of various sites, I've never yet really found any site that gives much information on actual cost of living. They'll rank cities compared to other cities, but what does that mean? What are the units? How does that actually translate into living and buying groceries?

At one point when I was after done from fixing my parent's finances (yes, more boomer parents who pre-spent their inheritance being Normal Americans and still wound up penniless), and still following was /r/personalfinance closely, I put together a one page annual budget spreadsheet template. It's not great, and isn't flexible enough to bother sharing here, but I did go through some efforts to come up with sensible defaults, and the sources were basically government published data.

The Bureau of Labor publishes the consumer price index data, and they break it out into regions, and into very small components like the price of eggs or the price of rent of primary residence. Their methodologies are going to have way less selection bias than any internet driven self-reporting system. For wages, the BLS also publishes National Compensation Surveys.

What we can't do is say 'middle school art resource teachers in Houston, TX spend this much on gas every month.' Because the data collection for prices involves sending out agents to markets, and the occupation data is mostly employer survey driven. There is however an interesting project I can't seem to find right now that I heard on some podcast that was collecting full income / spending journals from people. Really wish I could find a citation for it now.
posted by pwnguin at 6:22 PM on April 20, 2016 [4 favorites]


Taxes are what we pay to live in civilized society.

On the one hand yes, I certainly agree with you – but on the other hand it does seem like a bug that high-variance incomes get taxed so much more heavily than low-variance incomes of the same average amount.
posted by en forme de poire at 8:21 PM on April 20, 2016 [1 favorite]


Wireless competition in the US is pretty good lately. Tmoblie and MNVOs have forced price cuts from Verizon and AT&T I did not think we'd ever see. French wireless service is ballpark 20% cheaper than US service. Most people pay a lot more than 2 euros there, and you can get cheap basic plans in the US as well via prepaid (again, thank Tmobile) or through MNVOs like Ting.

I think it's more Apple's fault than lobbyists' that wireless service for smartphones was uncompetitive for awhile.
posted by michaelh at 8:27 PM on April 20, 2016




Marketplace segment with Gabler from yesterday's show.
posted by tonycpsu at 8:46 AM on April 21, 2016 [1 favorite]


How *does* a person live on $X in LA, or Amarillo, or DC, or Paris, or Tokyo, or wherever? Where does the money go?

I can only really speak to Japan here, but I know that in Osaka, if you don't need a big place, you can live in-the-city in the city for as little as ¥20,000 or ¥30,000 a month (admittedly, we're talking something like 150 sq. ft. or maybe even smaller). I myself live on the outskirts of Kyoto (40-minute bus ride downtown, 10-minute walk from a train station, and 20-minute walk from a subway station) in a roughly 480 sq. ft. apartment that costs ¥69,000 including ¥6,000 for the optional parking spot. The housing market is fairly well regulated overall, which means that if you're willing to compromise on size, it's usually affordable to live nearly anywhere you might want to, and if you're willing to not live in/near Tokyo (which is no great sacrifice if you ask me) you can live within about an hour of public transit from pretty much anywhere you'd want to work without too much difficulty overall.

I'm admittedly nominally self-employed and work from home, though, which does mean that I also have to pay my national healthcare and pension payments directly, which cost me, monthly… lessee… under ¥40,000 a month, combined. If memory serves, the last time I looked up what it would cost to self-insure in the US to a "the people in the ambulance don't just throw you out the back when they find out" level was something like a hand flipping the bird with a dollar sign in front of it. Things may have improved since then, at least marginally.

Actual doctor visits themselves cost far less than the US, as well — I caught a lumbar hernia last fall from I guess not washing my hands enough? Hobbled over to the local hospital without an appointment and waited about an hour in the lobby to see a doctor. Total costs for the day, including X-ray, MRI scan, support belt, and painkillers came to around ¥9,000. The national healthcare covers 70% of costs, so even if I were wholly uninsured, it would have come out to something like ¥30,000. I found out later that week that an insured friend of mine in America had recently had an MRI, too, and it cost him $3,000 out-of-pocket despite his insurance. I have seen ads at Japan's airports for travel insurance that are predicated on the fact that, to Japanese people, American medical expenses are literally unbelievably expensive.

So yeah. That's a little taste of why, if my wife and I moved back to the US, we'd have to make twice as much to maintain our lifestyle or maybe a little worse overall. Our combined income last year was under $55,000 according to the return I am legally obligated to file with the IRS, and that's enough that we can save probably something like 30% or 40% of our combined monthly incomes without any real hardship.

It is kind of frustrating at times to know that there is a very real choice between feeling financially independent vs. being able to visit family more than once a year, but at least we got the option of the former at all.
posted by DoctorFedora at 7:23 PM on April 21, 2016 [4 favorites]


We are supposed to manage our own retirement savings by gambling on the "free market," right? And the results of this gamble are truly transparent to us, right?

LOL. I can't even figure out where the performance numbers are on the Fidelity website for my account with them anymore.
posted by srboisvert at 12:10 PM on April 22, 2016 [1 favorite]


Look for the frowny face emoji.
posted by AFABulous at 12:19 PM on April 22, 2016 [1 favorite]


I've just started reading The Index Card due to this thread. Already loving it.
posted by amanda at 12:45 PM on April 22, 2016 [1 favorite]


This NY Times article, In a Big Hole for a Detroit House, but Happy, profiles a couple who borrowed and spent at least $400,000 fixing up a house that is worth maybe $300,000, leaving them $100k or so in the red above and beyond the mortgage.

Despite the author's disapproval, the couple seems very happy with their choices (and I hope that they will do well over the long run). Going that deep into the red over a house stands out as unusual, but if they had each bought a mid-level luxury car or one of them had decided to go to law school they would have the same level of debt without it being remarkable at all.

The profile reminded me of this FPP and of how rare it is to see such open accountings of people's finances, especially when they are exposing things that will guarantee negative judgements.
posted by Dip Flash at 5:59 AM on April 23, 2016 [1 favorite]


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