There is no real true joy
November 21, 2018 12:08 PM Subscribe
Debt: A Love Story. In exchange for anonymity, one couple lays out the brutal details of their life in the grip of an epic cycle of debt. Reactions are...mixed.
I feel bad for these people, but they have made some really, really bad choices. I hesitate to say stupid, but man, some of these choices were stupid. I'm sure they're nice, smart people and they've made a bunch of decisions that other people would make too, but... that's a lot of credit card debt. And a private school for little kids? Come on.
posted by GuyZero at 12:16 PM on November 21, 2018 [12 favorites]
posted by GuyZero at 12:16 PM on November 21, 2018 [12 favorites]
well that was a roller coaster, right when you hit peak "lol screw these idiots" it gets real dark real fast.
posted by prize bull octorok at 12:20 PM on November 21, 2018 [7 favorites]
posted by prize bull octorok at 12:20 PM on November 21, 2018 [7 favorites]
There are so many people who are right on the edge in this country.
You might like Refinery29's Money Diaries
posted by the man of twists and turns at 12:22 PM on November 21, 2018 [1 favorite]
You might like Refinery29's Money Diaries
posted by the man of twists and turns at 12:22 PM on November 21, 2018 [1 favorite]
“On a Friday night, we’ll go to Whole Foods, and my son Luke will get a $15 thing of sushi and a smoothie. It’s kind of crazy that we haven’t reeled this in,” Kate admitted.
That's not how sushi works.
posted by hal9k at 12:32 PM on November 21, 2018 [27 favorites]
That's not how sushi works.
posted by hal9k at 12:32 PM on November 21, 2018 [27 favorites]
What I''m saying is this is a systemic thing and it's not about this couple's money choices.
"Our kids are used to sushi. On a Friday night, we’ll go to Whole Foods, and my son Luke will get a $15 thing of sushi and a smoothie. It’s kind of crazy that we haven’t reeled this in."
"I don’t even know how many credit cards we have now. I mean, honestly, about 15?"
"So I finally went to my parents, and they gave us $40,000 to just pay off the five years’ worth of whatever was left. We still had school loans, but we erased $80,000 worth of credit card debt with that $40,000."
"We were in a good place. But then we did it all over again. We’re in exactly the same place now."
Are there systemic issues that cripple people financially? Absolutely.
Are there predatory financial institutions that should be reeled in? Absolutely.
Are these people in this situation because of their own behaviors and choices? Absolutely.
posted by NotMyselfRightNow at 12:32 PM on November 21, 2018 [138 favorites]
"Our kids are used to sushi. On a Friday night, we’ll go to Whole Foods, and my son Luke will get a $15 thing of sushi and a smoothie. It’s kind of crazy that we haven’t reeled this in."
"I don’t even know how many credit cards we have now. I mean, honestly, about 15?"
"So I finally went to my parents, and they gave us $40,000 to just pay off the five years’ worth of whatever was left. We still had school loans, but we erased $80,000 worth of credit card debt with that $40,000."
"We were in a good place. But then we did it all over again. We’re in exactly the same place now."
Are there systemic issues that cripple people financially? Absolutely.
Are there predatory financial institutions that should be reeled in? Absolutely.
Are these people in this situation because of their own behaviors and choices? Absolutely.
posted by NotMyselfRightNow at 12:32 PM on November 21, 2018 [138 favorites]
Yeah its really tough to tell exactly where the line is between not having the appropriate coping mechanisms for dealing with their kind of poverty and child abuse.
posted by Exceptional_Hubris at 12:37 PM on November 21, 2018
posted by Exceptional_Hubris at 12:37 PM on November 21, 2018
It sounds like two people with addictions who are unwittingly enabling each other while also being preyed on by banks.
posted by tofu_crouton at 12:40 PM on November 21, 2018 [35 favorites]
posted by tofu_crouton at 12:40 PM on November 21, 2018 [35 favorites]
The bank is responsible for choosing to lend to these folks.
posted by billjings at 12:42 PM on November 21, 2018 [1 favorite]
posted by billjings at 12:42 PM on November 21, 2018 [1 favorite]
I gasped when they cashed out the 401(k) :( I feel guilty reading stuff like this, there's definitely some schadenfreude there. Like watching The Real Housewives and being proud of my drama-free choices.
They have so much apparent privilege - making so much more a year than so many people could dream of - but feels like they're squandering it.
But then I try to tell myself - there but for the grace of god etc.
It's sad what money puts us through, a fiction we've all agreed to, that's causing them so much stress they talk of dying from it. Where's our post-money star trek society already???
posted by Uncle Glendinning at 12:42 PM on November 21, 2018 [18 favorites]
They have so much apparent privilege - making so much more a year than so many people could dream of - but feels like they're squandering it.
But then I try to tell myself - there but for the grace of god etc.
It's sad what money puts us through, a fiction we've all agreed to, that's causing them so much stress they talk of dying from it. Where's our post-money star trek society already???
posted by Uncle Glendinning at 12:42 PM on November 21, 2018 [18 favorites]
It's weird to me that the article never really addresses the decision of having children. I feel bad for these people. I think that they've been unfairly preyed upon by financial institutions. And I'm sure their kids are great! But having children is a huge financial decision, certainly larger than buying a car or a house. The article talks at great length about those other decisions, but just treats the kids as something that showed up one day.
posted by roll truck roll at 12:49 PM on November 21, 2018 [69 favorites]
posted by roll truck roll at 12:49 PM on November 21, 2018 [69 favorites]
there's definitely some schadenfreude there. Like watching The Real Housewives and being proud of my drama-free choices.
In addition to the ethics of what these people are doing and what banks are doing to them, this is very definitely a click-bait hate read. If these people lived in Toronto, this would have fit right into Toronto Life's other hate-reads. On one hand it's useful sharing of troubles that helps people come to grips with their own financial problems they may be in denial about, but it's also bad journalism that's just out to get outrage clicks.
posted by GuyZero at 12:51 PM on November 21, 2018 [11 favorites]
In addition to the ethics of what these people are doing and what banks are doing to them, this is very definitely a click-bait hate read. If these people lived in Toronto, this would have fit right into Toronto Life's other hate-reads. On one hand it's useful sharing of troubles that helps people come to grips with their own financial problems they may be in denial about, but it's also bad journalism that's just out to get outrage clicks.
posted by GuyZero at 12:51 PM on November 21, 2018 [11 favorites]
And a private school for little kids? Come on.
The thing is, this is super easy to say, until you've had the chance to compare private school and public school when it's your kid.
Like, public schools are shitty places right now that just barely try to educate kids. Even the best of the non-specialized ones. My kid is very bright. Three years of public school middle school at one of the best schools in the fucking county had gotten her to a horrible place. She was in the advanced classes! She was getting As! And it still was not good enough. On brightness alone, she was offered a chance at a competitive program for high school, and she could not do the work for the application because she'd never been taught how to do it. I had no idea she was behind, because she was on the top of the public school curve. And that's not to get into the constant bullying that teachers insisted they were powerless to stop.
Now she is in private school. We get financial aid. I have had to go begging to them to increase it twice. But she blossomed there. They have private counseling on what career paths people want to take. They have individualized attention from the teachers. They have a wealth of after school opportunities that emphasize hard work. They have financial planning classes. They focus on values and have feminist retreats so that the high school girls focus on supporting each other instead of tearing each other down. Turns out you can in fact virtually stop bullying when you have the resources to take it seriously.
I would literally do almost anything to keep her there, because the gulf between the two is so fucking vast. I haven't gone into debt yet over it, but I won't pretend that I wouldn't, because I can clearly see the difference between the two.
And like, yeah, it's easy to scoff and be like "well they clearly couldn't afford it", but like - where are the alternative good options?
posted by corb at 12:52 PM on November 21, 2018 [111 favorites]
The thing is, this is super easy to say, until you've had the chance to compare private school and public school when it's your kid.
Like, public schools are shitty places right now that just barely try to educate kids. Even the best of the non-specialized ones. My kid is very bright. Three years of public school middle school at one of the best schools in the fucking county had gotten her to a horrible place. She was in the advanced classes! She was getting As! And it still was not good enough. On brightness alone, she was offered a chance at a competitive program for high school, and she could not do the work for the application because she'd never been taught how to do it. I had no idea she was behind, because she was on the top of the public school curve. And that's not to get into the constant bullying that teachers insisted they were powerless to stop.
Now she is in private school. We get financial aid. I have had to go begging to them to increase it twice. But she blossomed there. They have private counseling on what career paths people want to take. They have individualized attention from the teachers. They have a wealth of after school opportunities that emphasize hard work. They have financial planning classes. They focus on values and have feminist retreats so that the high school girls focus on supporting each other instead of tearing each other down. Turns out you can in fact virtually stop bullying when you have the resources to take it seriously.
I would literally do almost anything to keep her there, because the gulf between the two is so fucking vast. I haven't gone into debt yet over it, but I won't pretend that I wouldn't, because I can clearly see the difference between the two.
And like, yeah, it's easy to scoff and be like "well they clearly couldn't afford it", but like - where are the alternative good options?
posted by corb at 12:52 PM on November 21, 2018 [111 favorites]
There's a long distance between "telling your kid not to spend $15 on sushi" and declaring personal bankruptcy. But it doesn't sound like they're doing either or anything in between. Regardless of how the debt accumulated - and yeah, there are a LOT of reasons why - they seem barely aware of the enormity of the problem. Like, they literally don't know how much they owe.
At some point, they need to come to peace (or at least, come to grips) with what's happening and say "Okay, this sucks, what are we going to do to get out of this hole?" They're still digging and not dealing with it.
posted by Elly Vortex at 12:52 PM on November 21, 2018 [6 favorites]
At some point, they need to come to peace (or at least, come to grips) with what's happening and say "Okay, this sucks, what are we going to do to get out of this hole?" They're still digging and not dealing with it.
posted by Elly Vortex at 12:52 PM on November 21, 2018 [6 favorites]
Something doesn't add up here. I would love to see their actual spending record, if it existed. They seem to blame it all on the house in the article but a mortgage of 2x your combined salary is very reasonable (and a completely impossible goal in many housing markets). Their mortgage payments can't be that high in comparison to their income. And private school is crazy in their financial situation but if they're paying 15,000 total for all their kids, that still leaves them a huge combined income to work with. I feel like there is more to this story because where is all that income going? I'm sure they pay tons in interest but not 100k a year, and they were still overspending when their low-earning parents gave them enough money to fully pay off their credit cards (!!!).
I have to suspect one of them is addicted to gambling or drugs or online shopping or something because it seems like there's a black hole of spending that they aren't mentioning. It's not possible to spend that much on food even at Whole Foods.
posted by randomnity at 12:52 PM on November 21, 2018 [37 favorites]
I have to suspect one of them is addicted to gambling or drugs or online shopping or something because it seems like there's a black hole of spending that they aren't mentioning. It's not possible to spend that much on food even at Whole Foods.
posted by randomnity at 12:52 PM on November 21, 2018 [37 favorites]
What I''m saying is this is a systemic thing and it's not about this couple's money choices.
It's both.
If anything, I find this interview infuriating because this couple's terrible decisions distract from the systemic problems that we should be talking about. They aren't anything like the people I know who are in debt - who got there through a combination of student loans, medical crises, low pay, and skyrocketing costs of living. Sure, sometimes they go out to eat instead of staying home and eating rice and beans, but this isn't what's got them in the hole.
Our financial system preys on people who won't say no. Sometimes it's because there's a pressing need and you literally just can't. Sometimes it's because there's no "right" choice: You can take out debt to go to college or you can try to make a living with jobs that will hire someone without a degree, both of which are usually shitty options. Sometimes, though, it's because you make the wrong choice, one that you really should know better than to make. And then you keep making those choices.
Writing stories about debt where there's a lot of the latter...? It seems a bit, uh... like the type story that folks of a certain political bent would want you to think is typical. Look, maybe it's a story worth telling, but I just think about how the poor are blamed for their poor financial decisions, and I read this final line:
posted by Kutsuwamushi at 12:58 PM on November 21, 2018 [73 favorites]
It's both.
If anything, I find this interview infuriating because this couple's terrible decisions distract from the systemic problems that we should be talking about. They aren't anything like the people I know who are in debt - who got there through a combination of student loans, medical crises, low pay, and skyrocketing costs of living. Sure, sometimes they go out to eat instead of staying home and eating rice and beans, but this isn't what's got them in the hole.
Our financial system preys on people who won't say no. Sometimes it's because there's a pressing need and you literally just can't. Sometimes it's because there's no "right" choice: You can take out debt to go to college or you can try to make a living with jobs that will hire someone without a degree, both of which are usually shitty options. Sometimes, though, it's because you make the wrong choice, one that you really should know better than to make. And then you keep making those choices.
Writing stories about debt where there's a lot of the latter...? It seems a bit, uh... like the type story that folks of a certain political bent would want you to think is typical. Look, maybe it's a story worth telling, but I just think about how the poor are blamed for their poor financial decisions, and I read this final line:
Tom: This is the kind of thing that poor people do. And I’d consider myself that.... and I want to scream, I do. This couple who makes $160,000/year considers themselves "poor", and this is the line the interview decides to end on.
posted by Kutsuwamushi at 12:58 PM on November 21, 2018 [73 favorites]
And private school is crazy in their financial situation but if they're paying 15,000 total for all their kids, that still leaves them a huge combined income to work with.
I actually read that paragraph with horror because I can't tell if they pay $15,000 in cash and all the rest of the "sticker price" goes on loans or whether somehow they get financial aid and then the $15k goes on loans. And I suspect I can't tell because they aren't really clear on the difference themselves, like for them, everything is a loan and it's all just play numbers at this point.
posted by warriorqueen at 12:58 PM on November 21, 2018 [7 favorites]
I actually read that paragraph with horror because I can't tell if they pay $15,000 in cash and all the rest of the "sticker price" goes on loans or whether somehow they get financial aid and then the $15k goes on loans. And I suspect I can't tell because they aren't really clear on the difference themselves, like for them, everything is a loan and it's all just play numbers at this point.
posted by warriorqueen at 12:58 PM on November 21, 2018 [7 favorites]
I'm in the middle of trimming down from being a single well-paid individual to living on a fixed income, and boy is it easy to stray. It's disheartening to get the food budget under control for a week but then confront the fact that your living room is full of boxes from Amazon.
It's very easy to get used to just grabbing anything you want when you want it, and in my case it was such an unconscious habit that I didn't even realize there was something to break. Fortunately my circumstances have changed such that instant gratification is frequently impossible -- I'm not sure how well I would be adjusting if everything was still within easy reach.
posted by Tell Me No Lies at 1:00 PM on November 21, 2018 [16 favorites]
It's very easy to get used to just grabbing anything you want when you want it, and in my case it was such an unconscious habit that I didn't even realize there was something to break. Fortunately my circumstances have changed such that instant gratification is frequently impossible -- I'm not sure how well I would be adjusting if everything was still within easy reach.
posted by Tell Me No Lies at 1:00 PM on November 21, 2018 [16 favorites]
who is lending these people money? that seems like a bad business to be in.....I guess the interest on credit cards makes it work even though they will never pay back the principal?
posted by thelonius at 1:02 PM on November 21, 2018
posted by thelonius at 1:02 PM on November 21, 2018
Also corb, I know that feeling too. In my case my kids are in public school but "kids activities, especially educational pursuits" are my Achilles heel in household finance.
posted by warriorqueen at 1:02 PM on November 21, 2018 [1 favorite]
posted by warriorqueen at 1:02 PM on November 21, 2018 [1 favorite]
like for them, everything is a loan and it's all just play numbers at this point
I really think it is. I was horrified to read "We had money for a brief period of time, so we had a pretty good Christmas that year." Because they didn't have money. They might have gotten someone to give them cash but that's not money when you still owe hundreds of thousands in non-mortgage debt. I'm sure that attitude is a large part of why they're in this mess...
posted by randomnity at 1:07 PM on November 21, 2018 [15 favorites]
I really think it is. I was horrified to read "We had money for a brief period of time, so we had a pretty good Christmas that year." Because they didn't have money. They might have gotten someone to give them cash but that's not money when you still owe hundreds of thousands in non-mortgage debt. I'm sure that attitude is a large part of why they're in this mess...
posted by randomnity at 1:07 PM on November 21, 2018 [15 favorites]
The thing is, this is super easy to say, until you've had the chance to compare private school and public school when it's your kid.
I have two kids that are now in very good (Canadian) universities. They went to public Canadian & US schools. I have made this calculation. Private elementary & high school in the US is not worth it unless your kid is an elite athlete or you just don't care about money. I work in Silicon Valley and I know people who are in both of those situations. I work with a guy whose kid got a full ride at Cal as a nationally-ranked swimmer. Nice way to pay for university if you can do it. I know people who send their kids to the huge variety of private schools around here mostly because they can - and they drive them there in their Tesla Model X P1000D's while they're at it.
Here's what they themselves say in the article:
So we were like, that’s it. So she’s now going into private school next year; we’re going to have three at the school. What we probably should’ve done is moved.
There are plenty of good public schools in the US. They way you get into one is to do what they say: you move. It sucks. It may actually be cheaper to send your kid to private school than to move!
I don't know your situation so I can't judge it. It's a complex calculation.
But I know 100% that these people could have moved (mostly by their own admission) and that there are perfectly acceptable public schools out there.
posted by GuyZero at 1:07 PM on November 21, 2018 [9 favorites]
I have two kids that are now in very good (Canadian) universities. They went to public Canadian & US schools. I have made this calculation. Private elementary & high school in the US is not worth it unless your kid is an elite athlete or you just don't care about money. I work in Silicon Valley and I know people who are in both of those situations. I work with a guy whose kid got a full ride at Cal as a nationally-ranked swimmer. Nice way to pay for university if you can do it. I know people who send their kids to the huge variety of private schools around here mostly because they can - and they drive them there in their Tesla Model X P1000D's while they're at it.
Here's what they themselves say in the article:
So we were like, that’s it. So she’s now going into private school next year; we’re going to have three at the school. What we probably should’ve done is moved.
There are plenty of good public schools in the US. They way you get into one is to do what they say: you move. It sucks. It may actually be cheaper to send your kid to private school than to move!
I don't know your situation so I can't judge it. It's a complex calculation.
But I know 100% that these people could have moved (mostly by their own admission) and that there are perfectly acceptable public schools out there.
posted by GuyZero at 1:07 PM on November 21, 2018 [9 favorites]
It's not possible to spend that much on food even at Whole Foods.
I think it is possible to dig quite a hole just with food costs, if one isn't paying attention to their expenditures. If only one of their kids is spending $20 on one meal at WF, and they have 3 kids and two adults, that's $100 for one meal. Multiple times a week? Even ONCE a week, Christ, that's $5200 a year. That's twice what their car payment is.
And then the leasing cars vs. buying cars. The guy drives a 6-year-old car that he leased new, and has a huge interest rate that his wife didn't even know about.
Well, I hope these people insist their kids get As in school, and I sure hope they learn financial planning and don't take their parents' advice when it comes to student loans, or these kids are never going to college. They'll probably have to get emancipated just to get financial aid.
posted by Autumnheart at 1:07 PM on November 21, 2018 [8 favorites]
I think it is possible to dig quite a hole just with food costs, if one isn't paying attention to their expenditures. If only one of their kids is spending $20 on one meal at WF, and they have 3 kids and two adults, that's $100 for one meal. Multiple times a week? Even ONCE a week, Christ, that's $5200 a year. That's twice what their car payment is.
And then the leasing cars vs. buying cars. The guy drives a 6-year-old car that he leased new, and has a huge interest rate that his wife didn't even know about.
Well, I hope these people insist their kids get As in school, and I sure hope they learn financial planning and don't take their parents' advice when it comes to student loans, or these kids are never going to college. They'll probably have to get emancipated just to get financial aid.
posted by Autumnheart at 1:07 PM on November 21, 2018 [8 favorites]
who is lending these people money? that seems like a bad business to be in.....I guess the interest on credit cards makes it work even though they will never pay back the principal?
That and scale. You have a cash machine of thousands of people paying 25% per year and if some of them default ... well, maybe you only make 20% this year.
posted by Tell Me No Lies at 1:08 PM on November 21, 2018 [6 favorites]
That and scale. You have a cash machine of thousands of people paying 25% per year and if some of them default ... well, maybe you only make 20% this year.
posted by Tell Me No Lies at 1:08 PM on November 21, 2018 [6 favorites]
(Not to abuse the edit window) But it would be a different story if a family's ONE extravagance was a good private school for their kids, and they worked two jobs, couponed like their lives depended on it, and drove 20-year-old Hondas in order to make that happen. But just buying the best of everything all the time, without any regard to whether or not you can cover your payments, is insane. They're not even educating themselves on how to get the most out of the money they do have, they're just looking for cash flow and then maxing it out.
posted by Autumnheart at 1:10 PM on November 21, 2018 [22 favorites]
posted by Autumnheart at 1:10 PM on November 21, 2018 [22 favorites]
My first reaction is that this is just BS. After all it is part of marketing for Wealthsimple which I guess is some kind of participant in the Fintech goldrush. It is sort of like: "look at these idiots, don't be like them, give US your money." With regard to the easy moralizing and tongue clucking all I can say is: "don't you have anything better to do with your time?" It is not like it isn't obvious that most people are irresponsible and our culture actively reinforces self destructive financial behavior. I'm not saying that people shouldn't behave I am just saying that they don't so you don't design your financial system to immiserate fools as most people are fools. If your going to get mad, don't get mad at the children get mad at the adults. (To the extent you can that is. I know people who walked away from their underwater houses when they could easily pay for their mortgages and felt clever and reasonable. Their neighbors who had to live next to zombie houses for years might have a different opinion. "But hey, that's what corporations do." (not enough bubba, not enough.))
posted by Pembquist at 1:14 PM on November 21, 2018 [13 favorites]
posted by Pembquist at 1:14 PM on November 21, 2018 [13 favorites]
The bank is responsible for choosing to lend to these folks.
if you view most banking as a privileged few (the shareholders etc) leveraging their privilege via debt toward controlling people's behavior, then you start to see personal debt (and lots of it) as not just beneficial to most banks, but pretty much their end game.
posted by philip-random at 1:17 PM on November 21, 2018 [17 favorites]
if you view most banking as a privileged few (the shareholders etc) leveraging their privilege via debt toward controlling people's behavior, then you start to see personal debt (and lots of it) as not just beneficial to most banks, but pretty much their end game.
posted by philip-random at 1:17 PM on November 21, 2018 [17 favorites]
Given a chance, expenses will always expand to consume any possible income. That is why you always pay yourself first. In this instance that would be eradicating debt. Start with the highest interest debt and work your way down to zero. And keep it there. I've heard rumors there is this thing called a "budget" that might be helpful in that regard...
posted by jim in austin at 1:19 PM on November 21, 2018 [6 favorites]
posted by jim in austin at 1:19 PM on November 21, 2018 [6 favorites]
The thing about infrastructures (what a word! The Structures Underneath) is that they canalize human behavior.
They require some, encourage others, permit yet others, discourage yet others, and forbid the rest. We can make decisions within these structures, but it's extremely difficult to make a decision outside these structures (and indeed, the resources and opportunities to escape them is itself a kind of meta-infrastructure, and steeped in privilege.)
One of the things is that this is a really great consumption unit (family) for the FIRE industry to target. They've paid out so much more in interest than these companies would lose in bankruptcy. This is why this consumption unit gets these credit card offers - the FIRE businesses recognize this and target them! The shitty deal on the leased car, the credit cards with minimum payments, the parent's and kid's student loans ...
Basically, they're a conduit for extracting money, the productive and stored labor of this consumption unit - the social, financial, legal, ethical infrastructure not merely allows it but encourages it. You think the FIRE companies would get Grandma's $40,000 without that? Or the 401k?
So yes, they made a long series of bad decisions, which they know are bad! And yes, they made these decisions in an infrastructure that can be described as, at best, permitting people to do this (and I'd say that these structures are in the encourage-shading-towards-require mode). And there's no money in paying less - see their experience in the credit counseling program, which they don't name, but I would strongly think is yet another FIRE business.
I dunno. These people need, like, bank balance therapy. They need to unlearn the consumptive and spending patterns, and the financialized businesses need to stop treating them like sheep, keeping them fed just enough to continue shearing.
posted by the man of twists and turns at 1:19 PM on November 21, 2018 [16 favorites]
They require some, encourage others, permit yet others, discourage yet others, and forbid the rest. We can make decisions within these structures, but it's extremely difficult to make a decision outside these structures (and indeed, the resources and opportunities to escape them is itself a kind of meta-infrastructure, and steeped in privilege.)
One of the things is that this is a really great consumption unit (family) for the FIRE industry to target. They've paid out so much more in interest than these companies would lose in bankruptcy. This is why this consumption unit gets these credit card offers - the FIRE businesses recognize this and target them! The shitty deal on the leased car, the credit cards with minimum payments, the parent's and kid's student loans ...
Basically, they're a conduit for extracting money, the productive and stored labor of this consumption unit - the social, financial, legal, ethical infrastructure not merely allows it but encourages it. You think the FIRE companies would get Grandma's $40,000 without that? Or the 401k?
So yes, they made a long series of bad decisions, which they know are bad! And yes, they made these decisions in an infrastructure that can be described as, at best, permitting people to do this (and I'd say that these structures are in the encourage-shading-towards-require mode). And there's no money in paying less - see their experience in the credit counseling program, which they don't name, but I would strongly think is yet another FIRE business.
I dunno. These people need, like, bank balance therapy. They need to unlearn the consumptive and spending patterns, and the financialized businesses need to stop treating them like sheep, keeping them fed just enough to continue shearing.
posted by the man of twists and turns at 1:19 PM on November 21, 2018 [16 favorites]
I just don’t get how this happens. We live within our means, we pay our bills, we save a bit. But we couldn’t get a short term loan for emergency cat surgery from a place that only does loans for this exact situation. How the fuck can people rack up this much debt? Aside from school loans obviously. I had built up a decent credit score and when our car got totaled last winter we got told it “didn’t count” because it had been more than seven years since I got the last car loan so that was super fun trying to get financing.
We finally got a credit card for emergencies this year. With like, a 2k limit. I don’t know. I feel like I live in a very different world sometimes.
posted by monkeyscouch at 1:20 PM on November 21, 2018 [21 favorites]
We finally got a credit card for emergencies this year. With like, a 2k limit. I don’t know. I feel like I live in a very different world sometimes.
posted by monkeyscouch at 1:20 PM on November 21, 2018 [21 favorites]
We live within our means
Well there's your first mistake. If you have no record of making payments on crushing debt they really don't want you.
posted by Tell Me No Lies at 1:24 PM on November 21, 2018 [53 favorites]
Well there's your first mistake. If you have no record of making payments on crushing debt they really don't want you.
posted by Tell Me No Lies at 1:24 PM on November 21, 2018 [53 favorites]
immiserate
I honestly thought this was a typo. Now it's my word of the day!
posted by Tell Me No Lies at 1:25 PM on November 21, 2018 [8 favorites]
I honestly thought this was a typo. Now it's my word of the day!
posted by Tell Me No Lies at 1:25 PM on November 21, 2018 [8 favorites]
On the one had, the banks deserve their losses if/when this couple does final arrive at bankruptcy. I'm sure they'll still have come out way ahead.
On the other, it was distressing to see their utter ignorance of their own financial position - and how it combined with the way they simply resorted to comparing to the apparent lifestyles of neighbors.
I'm sad for their kids who will need to break free from this vortex and their parent's who gave a loan with good intentions only to have it evaporate in slowly delaying a reckoning that maybe should have come sooner.
A few of those nights bartending for a couple hundred bucks would clearly be better spent sitting down as a couple and fully understanding every one of their debts, obligations, and developing an actual plan for it.
posted by meinvt at 1:26 PM on November 21, 2018 [2 favorites]
On the other, it was distressing to see their utter ignorance of their own financial position - and how it combined with the way they simply resorted to comparing to the apparent lifestyles of neighbors.
I'm sad for their kids who will need to break free from this vortex and their parent's who gave a loan with good intentions only to have it evaporate in slowly delaying a reckoning that maybe should have come sooner.
A few of those nights bartending for a couple hundred bucks would clearly be better spent sitting down as a couple and fully understanding every one of their debts, obligations, and developing an actual plan for it.
posted by meinvt at 1:26 PM on November 21, 2018 [2 favorites]
The mortgage crisis is a perfect example of that behavior (which is why I don't necessarily agree with Pembquist's conclusion on people who strategically defaulted on underwater houses). In short, the banks deliberately lent to people who were likely to foreclose, because the banks stood to collect more money on their foreclosure insurance policies than they would have if the mortgages had been paid. The problem arose when all the banks were basically selling insurance policies to each other, backed by mortgages that were worth only a fraction of those policies, and then the foreclosures hit critical mass. Suddenly every bank had all these policies that they couldn't collect on, because nobody had the money to back them, and property that they certainly didn't have the resources to physically manage.
One can debate about whether individual people or entities have a moral responsibility to pay their debts, but I would assert that the ultimate responsibility falls with the banks, who deliberately attempted to rig the game to profit from foreclosures in the first place. They reaped what they sowed. Why should an individual risk his or her financial security, upon which their ability to survive without falling into poverty for the rest of their life, for the sake of a bank? Especially since we now know that the government was perfectly willing to bail out the banks, while consumers as a whole suffered enormous financial detriment even if they weren't personally affected, let alone if they were.
posted by Autumnheart at 1:26 PM on November 21, 2018 [9 favorites]
One can debate about whether individual people or entities have a moral responsibility to pay their debts, but I would assert that the ultimate responsibility falls with the banks, who deliberately attempted to rig the game to profit from foreclosures in the first place. They reaped what they sowed. Why should an individual risk his or her financial security, upon which their ability to survive without falling into poverty for the rest of their life, for the sake of a bank? Especially since we now know that the government was perfectly willing to bail out the banks, while consumers as a whole suffered enormous financial detriment even if they weren't personally affected, let alone if they were.
posted by Autumnheart at 1:26 PM on November 21, 2018 [9 favorites]
that still leaves them a huge combined income to work with. I feel like there is more to this story because where is all that income going?
So let's run some math.
They both make, combined, 160K. After taxes, that's 123K. Subtracting the 15K they pay for all kids for private school, we have 108K, or about 9K a month.
Their mortgages total to 360K - using a simple mortgage calculator, I get a payment of about 2200 a month. They say they live in the suburbs of a city in the Northeast. Assuming a rough average in property tax for a place assessed at that, I'm getting about 8K a year, 666$ a month - though it may even be higher than that, because they talk about being in a super swank neighborhood. Let's assume a cool 3K, taking them down to 6K a month for incidentals.
A "liberal" food plan, per USDA, for a family of five of those ages, for one month, is 1764$. I severely doubt that counts 'vegan food at Whole Foods', I would inflate that, at the least, to something like 2500$ a month. We're now down to 3500$ a month.
They don't know how many credit cards they have 'maybe, about 15?' Assuming that there's minimums to pay on all of those, I can't see it being under 50 with how much they've spent, so that's another 750$ a month towards credit cards. We are now down to 2750$ a month.
Car payments are low, about 500$ a month total - add in the gas and insurance, and we're probably at about 750$ a month. Now we're down to 2K, and we haven't even gotten to utilities.
Phones for 5, electricity, water, sewer, and garbage seems like it would be about 750$ a month again, so now we're down to 1250$ free. Which is, on average, 312$ a week. Which is super easy to blow through with a family of five. Especially if you're used to thinking that 160K a year is a stupendously good income, and you should be able to eat out twice a week or whatever.
posted by corb at 1:27 PM on November 21, 2018 [63 favorites]
So let's run some math.
They both make, combined, 160K. After taxes, that's 123K. Subtracting the 15K they pay for all kids for private school, we have 108K, or about 9K a month.
Their mortgages total to 360K - using a simple mortgage calculator, I get a payment of about 2200 a month. They say they live in the suburbs of a city in the Northeast. Assuming a rough average in property tax for a place assessed at that, I'm getting about 8K a year, 666$ a month - though it may even be higher than that, because they talk about being in a super swank neighborhood. Let's assume a cool 3K, taking them down to 6K a month for incidentals.
A "liberal" food plan, per USDA, for a family of five of those ages, for one month, is 1764$. I severely doubt that counts 'vegan food at Whole Foods', I would inflate that, at the least, to something like 2500$ a month. We're now down to 3500$ a month.
They don't know how many credit cards they have 'maybe, about 15?' Assuming that there's minimums to pay on all of those, I can't see it being under 50 with how much they've spent, so that's another 750$ a month towards credit cards. We are now down to 2750$ a month.
Car payments are low, about 500$ a month total - add in the gas and insurance, and we're probably at about 750$ a month. Now we're down to 2K, and we haven't even gotten to utilities.
Phones for 5, electricity, water, sewer, and garbage seems like it would be about 750$ a month again, so now we're down to 1250$ free. Which is, on average, 312$ a week. Which is super easy to blow through with a family of five. Especially if you're used to thinking that 160K a year is a stupendously good income, and you should be able to eat out twice a week or whatever.
posted by corb at 1:27 PM on November 21, 2018 [63 favorites]
Jesus christ, why did I even read this? I thought it was Onionesque at first, but that Corolla right in the end? Nobody jokes about that.
posted by ouke at 1:28 PM on November 21, 2018 [4 favorites]
posted by ouke at 1:28 PM on November 21, 2018 [4 favorites]
How the fuck can people rack up this much debt?
The number and types of credit that you have make a difference in your score. If you have no credit cards and no car payment, your score suffers. No mortgage either? Well the credit industry might not even see you as a person. This is why using a card for small purchases and paying it off each month is recommended. It really is a sick system when certain healthy behaviors are rated against you and unhealthy behaviors juice your score.
posted by soelo at 1:28 PM on November 21, 2018 [25 favorites]
The number and types of credit that you have make a difference in your score. If you have no credit cards and no car payment, your score suffers. No mortgage either? Well the credit industry might not even see you as a person. This is why using a card for small purchases and paying it off each month is recommended. It really is a sick system when certain healthy behaviors are rated against you and unhealthy behaviors juice your score.
posted by soelo at 1:28 PM on November 21, 2018 [25 favorites]
But in any case, strategically defaulting on a mortgage is different from what these people are doing, which is to take any offer to use someone else's money that they can get their hands on, blow it on bullshit, and then have no way to pay the money back.
posted by Autumnheart at 1:29 PM on November 21, 2018 [6 favorites]
posted by Autumnheart at 1:29 PM on November 21, 2018 [6 favorites]
Subtracting the 15K they pay for all kids for private school, we have 108K, or about 9K a month.
But they don't even pay that! They got loans!
posted by GuyZero at 1:30 PM on November 21, 2018 [2 favorites]
But they don't even pay that! They got loans!
posted by GuyZero at 1:30 PM on November 21, 2018 [2 favorites]
I just don’t get how this happens...How the fuck can people rack up this much debt?
Having a good/long enough credit history, whether or not you have debt, plays a huge role. My first credit card, a student card I got when I was 18, had a limit of something like $500. Three years later I applied for my first premium travel card and they offered me a limit of $15,000 (this was when my annual income was still in the four figures, too.) I just about fell out of my chair, that was way more credit than I should have been extended. If I actually charged up to the limits I have now, after adding a number of cards for the mileage bonuses and such...I can't even imagine. It would be truly impossible to manage.
posted by mosst at 1:31 PM on November 21, 2018 [4 favorites]
Having a good/long enough credit history, whether or not you have debt, plays a huge role. My first credit card, a student card I got when I was 18, had a limit of something like $500. Three years later I applied for my first premium travel card and they offered me a limit of $15,000 (this was when my annual income was still in the four figures, too.) I just about fell out of my chair, that was way more credit than I should have been extended. If I actually charged up to the limits I have now, after adding a number of cards for the mileage bonuses and such...I can't even imagine. It would be truly impossible to manage.
posted by mosst at 1:31 PM on November 21, 2018 [4 favorites]
The housing side of the equation is so low that I really don't understand how they are having trouble making ends meet on their income. Even the private school sounds OK, $15,000 for 3 kids? That is less than what daycare costs would be for 1 kid over here. I could somewhat understand if the payments on their student loans were eating into their income but they aren't even paying those. As depressing as their story is it at least sounds solvable.
posted by any portmanteau in a storm at 1:31 PM on November 21, 2018 [1 favorite]
posted by any portmanteau in a storm at 1:31 PM on November 21, 2018 [1 favorite]
Well it's not so surprising when you draw the parallels between this and junk food. Our human brains, after all, aren't so sophisticated, we crave the dopamine hit and waves of pleasure it generates. Companies have spent literally billions of dollars crafting the perfect combination of crunch, salt, sugar and MSG that has never before existed naturally in nature, the most compelling snack that will keep us reaching for more, and our primitive little brains really aren't a match for that.
The entire financial system - along with the rest of the capitalist structures like property, education, retail, advertising... has been finely tuned with billions of dollars of research to be the perfect machine at extracting money from us and keeping us in debt and paying interest. Some of us escape its grasp, like maybe an insect that somehow isn't drawn to the poisoned and baited trap through some genetic fluke... and many will not.
posted by xdvesper at 1:31 PM on November 21, 2018 [8 favorites]
The entire financial system - along with the rest of the capitalist structures like property, education, retail, advertising... has been finely tuned with billions of dollars of research to be the perfect machine at extracting money from us and keeping us in debt and paying interest. Some of us escape its grasp, like maybe an insect that somehow isn't drawn to the poisoned and baited trap through some genetic fluke... and many will not.
posted by xdvesper at 1:31 PM on November 21, 2018 [8 favorites]
It really is a sick system when certain healthy behaviors are rated against you and unhealthy behaviors juice your score.
I literally saw my credit score drop 50 points after paying off my student loans.
posted by NoxAeternum at 1:32 PM on November 21, 2018 [28 favorites]
I literally saw my credit score drop 50 points after paying off my student loans.
posted by NoxAeternum at 1:32 PM on November 21, 2018 [28 favorites]
Like Pembquist, above - I thought this "article" was just a bit too much... it reads like a marketing team's role-playing scenario, like a conglomeration of every trigger-y middle-class money problem rolled into one: Sushi! Private School! Law School Debt!
Consider the source.
posted by gyusan at 1:32 PM on November 21, 2018 [18 favorites]
Consider the source.
posted by gyusan at 1:32 PM on November 21, 2018 [18 favorites]
I was all prepared to be angry at this couple -- as I have every "hate read" in Toronto Life -- but I just couldn't be. I was just sad: they aren't happy, and he's working a second job and it's not an easy one. Yes, they have made bad choices - and sometimes (like the school loans) maybe it didn't feel like a choice. But they are paying for it, emotionally.
That said: they shouldn't hide this from their kids, especially the 18-year-old. It's really important that kids understand where money comes from, exactly how much there is, and where it goes. It will help them in the future. It doesn't have to be scary, just matter-of-fact - and they will start to understand that $15 sushi for special occasions, and this week we're having Dominoes.
(My family needs to eat less Dominoes - it's fine for our budget, very bad for our waistlines).
posted by jb at 1:33 PM on November 21, 2018 [6 favorites]
That said: they shouldn't hide this from their kids, especially the 18-year-old. It's really important that kids understand where money comes from, exactly how much there is, and where it goes. It will help them in the future. It doesn't have to be scary, just matter-of-fact - and they will start to understand that $15 sushi for special occasions, and this week we're having Dominoes.
(My family needs to eat less Dominoes - it's fine for our budget, very bad for our waistlines).
posted by jb at 1:33 PM on November 21, 2018 [6 favorites]
Like the "avocado toast" argument taken to its most extreme incarnation? These people are like the poster children of the dangers of avocado toast.
posted by Autumnheart at 1:34 PM on November 21, 2018 [5 favorites]
posted by Autumnheart at 1:34 PM on November 21, 2018 [5 favorites]
You know you're supposed to care more, and you feel guilty all the time, but money isn't tangible and it can be really, really hard to grasp as a concept.
I dunno, it seems only as difficult as basic subtraction, which we learn in elementary school.
posted by Autumnheart at 1:40 PM on November 21, 2018 [1 favorite]
I dunno, it seems only as difficult as basic subtraction, which we learn in elementary school.
posted by Autumnheart at 1:40 PM on November 21, 2018 [1 favorite]
No mortgage either? Well the credit industry might not even see you as a person.
Until I was 24, I had neither a driver's license nor a credit card. I was absolutely an official unperson.
I used to get regular mailings from my bank urging me to get a credit card -- PRE-APPROVED! they shouted. At 22 I decided a credit card might be handy at some point, so I filled an application out and mailed it back. I got a brief form letter back telling me that regretfully they could not offer me a card at this time, and if I had any questions to please call this number. Mostly out of curiosity, I did so.
The woman on the line pulled up my application and reviewed it. I answered her questions truthfully. Where was my car loan? I did not drive. Where was my student loan? I paid up front. Where was my mortgage? I rented my apartment. Ultimately, she darkly delivered a non sequitur: "Fraud is a very serious offense." I asked what this meant, and she declared, "You CANNOT be 22 years old and not be in debt." I allowed that I owed the library $1.20 in overdue fees, but that did not sway her.
Ultimately, two years later I received a card with an attached letter telling me this was the renewal for my existing card. Okay then.
posted by ricochet biscuit at 1:42 PM on November 21, 2018 [65 favorites]
Until I was 24, I had neither a driver's license nor a credit card. I was absolutely an official unperson.
I used to get regular mailings from my bank urging me to get a credit card -- PRE-APPROVED! they shouted. At 22 I decided a credit card might be handy at some point, so I filled an application out and mailed it back. I got a brief form letter back telling me that regretfully they could not offer me a card at this time, and if I had any questions to please call this number. Mostly out of curiosity, I did so.
The woman on the line pulled up my application and reviewed it. I answered her questions truthfully. Where was my car loan? I did not drive. Where was my student loan? I paid up front. Where was my mortgage? I rented my apartment. Ultimately, she darkly delivered a non sequitur: "Fraud is a very serious offense." I asked what this meant, and she declared, "You CANNOT be 22 years old and not be in debt." I allowed that I owed the library $1.20 in overdue fees, but that did not sway her.
Ultimately, two years later I received a card with an attached letter telling me this was the renewal for my existing card. Okay then.
posted by ricochet biscuit at 1:42 PM on November 21, 2018 [65 favorites]
Not mentioned in the article: How much they pay on clothes ("we shop at Goodwill" but "we bought a tux for the prom"); how often they buy $80 shoes for everyone in the family; whether they take family trips and how much those cost; how often they replace kitchen appliances.
Not addressed: Why they need a new/leased car, instead of an older, much cheaper one; that they had a debt plan and failed at it because apparently they're not capable of setting up recurring payments and leaving them alone; what they think about people who have the same impulse control problems without the background that lets them have $160k/year in household income.
These people are not victims. They know they have problems and they refuse to deal with them. They've never faced serious consequences for their mistakes, so they're willing to continue to dodge and pretend that they never will - and if they wind up with no more deferral for the student loan debt, and the bank repossesses their house and they wind up homeless/couch-surfing/moved in with parents, you can bet they're going to whine about "predatory lending" and not "we never once made a decision based on the idea that credit card money was a loan, not a gift."
posted by ErisLordFreedom at 1:43 PM on November 21, 2018 [29 favorites]
Not addressed: Why they need a new/leased car, instead of an older, much cheaper one; that they had a debt plan and failed at it because apparently they're not capable of setting up recurring payments and leaving them alone; what they think about people who have the same impulse control problems without the background that lets them have $160k/year in household income.
These people are not victims. They know they have problems and they refuse to deal with them. They've never faced serious consequences for their mistakes, so they're willing to continue to dodge and pretend that they never will - and if they wind up with no more deferral for the student loan debt, and the bank repossesses their house and they wind up homeless/couch-surfing/moved in with parents, you can bet they're going to whine about "predatory lending" and not "we never once made a decision based on the idea that credit card money was a loan, not a gift."
posted by ErisLordFreedom at 1:43 PM on November 21, 2018 [29 favorites]
Given a chance, expenses will always expand to consume any possible income
So true. My own financial stability didn't happen until I made enough, and reduced expenses enough, and got disciplined enough, to set a budget for myself: anything up to $x that I make in a month stays in checking, everything over $x gets transferred into a separate account so I won't use it.
At first, that meant saving about $50 a month, but I did it anyway to develop the habit. As I earned more money, I kept the budget as-is and the amount I was saving increased. That saved me when I lost my job for six months, as it meant I could afford my mortgage and health insurance, and also that I was emotionally working from a place of losing $x instead of my full income -- so I could take a job that paid less than my old one, and still be just fine.
As it happened, I eventually landed a job that was more lucrative than the previous, but I kept my budget the same, and now i think I'll actually be able to send my kids to college when the time comes.
The point being: if you can prevent that expansion by fixing your costs to a budget and saving everything else, it can really pay off later. Having said that, it is a very hard thing to do, and far too many people have neither the income nor the stability to have an opportunity to do it. If you have that income and stability, I recommend you give it a try.
posted by davejay at 1:44 PM on November 21, 2018 [14 favorites]
So true. My own financial stability didn't happen until I made enough, and reduced expenses enough, and got disciplined enough, to set a budget for myself: anything up to $x that I make in a month stays in checking, everything over $x gets transferred into a separate account so I won't use it.
At first, that meant saving about $50 a month, but I did it anyway to develop the habit. As I earned more money, I kept the budget as-is and the amount I was saving increased. That saved me when I lost my job for six months, as it meant I could afford my mortgage and health insurance, and also that I was emotionally working from a place of losing $x instead of my full income -- so I could take a job that paid less than my old one, and still be just fine.
As it happened, I eventually landed a job that was more lucrative than the previous, but I kept my budget the same, and now i think I'll actually be able to send my kids to college when the time comes.
The point being: if you can prevent that expansion by fixing your costs to a budget and saving everything else, it can really pay off later. Having said that, it is a very hard thing to do, and far too many people have neither the income nor the stability to have an opportunity to do it. If you have that income and stability, I recommend you give it a try.
posted by davejay at 1:44 PM on November 21, 2018 [14 favorites]
I just don’t get how this happens...How the fuck can people rack up this much debt?
So, confession time: I monitor and pay all our bills, and I keep a tight, rear-naked-choke-esque hold on my family's finances, and I dabble a little bit in the credit-card-churning world (still, miles) and my combined credit limits are larger than my entire annual salary. Now, I fucking won't, but I could.
There's no damn reason for this to happen, except for the finance industry thinks they're going to make money doing this. They're wrong on me specifically, but not wrong in the aggregate.
posted by the man of twists and turns at 1:45 PM on November 21, 2018 [26 favorites]
So, confession time: I monitor and pay all our bills, and I keep a tight, rear-naked-choke-esque hold on my family's finances, and I dabble a little bit in the credit-card-churning world (still, miles) and my combined credit limits are larger than my entire annual salary. Now, I fucking won't, but I could.
There's no damn reason for this to happen, except for the finance industry thinks they're going to make money doing this. They're wrong on me specifically, but not wrong in the aggregate.
posted by the man of twists and turns at 1:45 PM on November 21, 2018 [26 favorites]
Which is possible if you have one checking account and that's your entire financial picture. Or if you deal in cash only. But this couple seems to have dozens of accounts, all over the place, with many moving parts.
You can have a bunch of accounts and still apply basic subtraction. I've got 3 credit cards, an FSA and a mortgage, but I can still subtract all my payments from my paycheck and come up with an number that is either a positive or negative integer.
posted by Autumnheart at 1:46 PM on November 21, 2018
You can have a bunch of accounts and still apply basic subtraction. I've got 3 credit cards, an FSA and a mortgage, but I can still subtract all my payments from my paycheck and come up with an number that is either a positive or negative integer.
posted by Autumnheart at 1:46 PM on November 21, 2018
The best things I've done for myself, financially, have been to transfer some money from checking to savings every single paycheck, no matter what, and to limit my incidental purchases to however much cash I am willing to withdraw from checking at the beginning of the week.
posted by gauche at 1:46 PM on November 21, 2018 [5 favorites]
posted by gauche at 1:46 PM on November 21, 2018 [5 favorites]
oh and my first budget was higher than what I have now, as when I was only saving $50 I found myself thinking "wow if I can eliminate $50 in expenses I can double my savings", which made line items previous thought too small to bother cutting seem much larger and more impactful to cut, and then I'd lower the budget by the same amount
posted by davejay at 1:46 PM on November 21, 2018 [1 favorite]
posted by davejay at 1:46 PM on November 21, 2018 [1 favorite]
We are a society addicted to easy credit and debt; and it's not just us consumers, it's the entire fucking system. We sat down with our bank about five or six years ago when we'd gotten over-extended and realized what a hole we were digging. We worked out a debt consolidation loan. Part of the agreement was paying off the credit card entirely and then accepting a much lower card limit than what we had been living with.
Within three months of doing that, the bank was sending us offers to up the credit card limit. Every time we go into the bank, they offer us lines of credit or a higher card limit, and so on. We can resist the offers, but the frantic desire of the banks to keep extending people credit demonstrates a system that has a problem - it needs people to develop and maintain high debt levels in order to reap the profits expected. I can understand why people get into trouble, because the offers just keep coming.
posted by nubs at 1:47 PM on November 21, 2018 [9 favorites]
Within three months of doing that, the bank was sending us offers to up the credit card limit. Every time we go into the bank, they offer us lines of credit or a higher card limit, and so on. We can resist the offers, but the frantic desire of the banks to keep extending people credit demonstrates a system that has a problem - it needs people to develop and maintain high debt levels in order to reap the profits expected. I can understand why people get into trouble, because the offers just keep coming.
posted by nubs at 1:47 PM on November 21, 2018 [9 favorites]
But we couldn’t get a short term loan for emergency cat surgery from a place that only does loans for this exact situation.
I can't get a credit card because I've never had one. I have excellent credit, although I don't make much money. I'm sure I can find a shitty one, to start building a history - but I'm still in the process of applying, getting rejected...
(And I'm applying based on services that say I have a fair/good chance of getting approved. So it's not like I'm trying to get a super fancy card.)
I think I look like someone who will pay it off each month. Which means they won't make much money on me.
We have this credit-driven economy that is just basically not built to servicee people who don't make a lot of use of credit.
posted by Kutsuwamushi at 1:47 PM on November 21, 2018 [5 favorites]
I can't get a credit card because I've never had one. I have excellent credit, although I don't make much money. I'm sure I can find a shitty one, to start building a history - but I'm still in the process of applying, getting rejected...
(And I'm applying based on services that say I have a fair/good chance of getting approved. So it's not like I'm trying to get a super fancy card.)
I think I look like someone who will pay it off each month. Which means they won't make much money on me.
We have this credit-driven economy that is just basically not built to servicee people who don't make a lot of use of credit.
posted by Kutsuwamushi at 1:47 PM on November 21, 2018 [5 favorites]
I've been reading through these comments, after having read the article, and while certainly some of their choices are questionable, I lean toward "the system is set up to feed the addiction of consumption junkies." I'm not in anything like their situation, but in part that's because I went to school at the tail end of the Old Economy Steven era, so I didn't have debts to pay off from school (Pell grants, some jobs, worked at my university for the tuition waiver for my library degree); also, credit cards were much harder to get back then, which was a blessing in my case. It's also in part because I did declare bankruptcy, following my divorce and first DUI, and later had substantial costs arising from my second DUI, and had to develop a certain amount of discipline just to avoid adding to my already-substantial stack of problems.
So, I can tut-tut with the rest of them, but I remind myself that making a virtue out of necessity is a thing. Addiction comes in all forms, and I can accept that, and also that someone might get to the point at which they just might throw their hands up and go, "Oh, what the fuck ever, get the sushi, kid."
posted by Halloween Jack at 1:50 PM on November 21, 2018 [14 favorites]
So, I can tut-tut with the rest of them, but I remind myself that making a virtue out of necessity is a thing. Addiction comes in all forms, and I can accept that, and also that someone might get to the point at which they just might throw their hands up and go, "Oh, what the fuck ever, get the sushi, kid."
posted by Halloween Jack at 1:50 PM on November 21, 2018 [14 favorites]
I'm still in the process of applying, getting rejected...
Try moving your money to a credit union, then getting a card with them.
posted by davejay at 1:50 PM on November 21, 2018 [10 favorites]
Try moving your money to a credit union, then getting a card with them.
posted by davejay at 1:50 PM on November 21, 2018 [10 favorites]
Re: private school - I am not a parent but I can imagine that if my daughter were being punched at school I would do whatever I could do take her out of that situation:
We kept my youngest daughter, Elise, who was in sixth grade last year, in public school. We thought, well, she’s fine there. But last year, she got to a place where she wasn’t learning, she was afraid to go to school, and she got punched at one point.
This whole narrative made me sad but it was really helpful to read. One thing I have experienced, as someone who has (thankfully) paid off my student debt but who lives in a high cost-of-living-city where I am not saving as much as I feel I should be, is that when I am feeling worried and scared about money, I am much more likely to impulse buy or freak out or make bad financial decisions because I'm so emotional about the situation. I'll know I could be making lentil soup for pennies a la Budget Bytes but I get worked up into such a panic that I don't eat and then I'm starving and oh there's nothing in the pantry so I'll hit up GrubHub. And I feel guilty about it and don't enjoy the food.
I'm sure someone else looking at my credit card statements would judge me for how often I order takeout or buy expensive groceries - I judge myself! I've noticed lately that the best way for me to spend less on food is not to try to save money but to work on being calmer, less busy, and less frantic about my finances in general.
posted by rogerrogerwhatsyourrvectorvicto at 1:51 PM on November 21, 2018 [31 favorites]
We kept my youngest daughter, Elise, who was in sixth grade last year, in public school. We thought, well, she’s fine there. But last year, she got to a place where she wasn’t learning, she was afraid to go to school, and she got punched at one point.
This whole narrative made me sad but it was really helpful to read. One thing I have experienced, as someone who has (thankfully) paid off my student debt but who lives in a high cost-of-living-city where I am not saving as much as I feel I should be, is that when I am feeling worried and scared about money, I am much more likely to impulse buy or freak out or make bad financial decisions because I'm so emotional about the situation. I'll know I could be making lentil soup for pennies a la Budget Bytes but I get worked up into such a panic that I don't eat and then I'm starving and oh there's nothing in the pantry so I'll hit up GrubHub. And I feel guilty about it and don't enjoy the food.
I'm sure someone else looking at my credit card statements would judge me for how often I order takeout or buy expensive groceries - I judge myself! I've noticed lately that the best way for me to spend less on food is not to try to save money but to work on being calmer, less busy, and less frantic about my finances in general.
posted by rogerrogerwhatsyourrvectorvicto at 1:51 PM on November 21, 2018 [31 favorites]
The lack of communication is shocking. The wife's parents, who gave them $40k to pay off their credit card debuts, have no idea that the family is right back in as much credit card debt as before. The wife finds out during the interview that her husband has been making huge interest payments on his leased car. Their kids have no idea that their parents are in massive debt and can't actually afford to buy them nice clothes, sushi for dinner every Friday, or a tux for Prom, never mind private school tuition. How are they, as a family, supposed to cooperate and support each other through this when so many of the people involved are being kept in the dark, to varying degrees? How are those kids ever going to learn about responsible spending? The eldest is 18 and going to be out on their own soon enough.
posted by Secret Sparrow at 1:53 PM on November 21, 2018 [43 favorites]
posted by Secret Sparrow at 1:53 PM on November 21, 2018 [43 favorites]
Kutsuwamushi, have you tried starting out with a secured card? Also, would anyone else rather hear from some normal people who make around 50k per household every once in a while?
posted by Selena777 at 1:54 PM on November 21, 2018 [14 favorites]
posted by Selena777 at 1:54 PM on November 21, 2018 [14 favorites]
The extension of easy credit is the accelerant keeping the economy from collapsing and preventing wages from rising. It’s like responding to fatigue by doing more coke cause everyone keeps hanging you mirrored frayed stacked high. Any one person’s choices don’t matter. The goal is to keep people in debt bondage by any means necessary.
Eventually the final bill is going to come and it will be a crash that makes 08 look like previews in Hartford. The only plan anyone has is not to be the one caught without an exit when the music stops. (We the people have no exit)
posted by The Whelk at 1:54 PM on November 21, 2018 [12 favorites]
Eventually the final bill is going to come and it will be a crash that makes 08 look like previews in Hartford. The only plan anyone has is not to be the one caught without an exit when the music stops. (We the people have no exit)
posted by The Whelk at 1:54 PM on November 21, 2018 [12 favorites]
I can't get a credit card because I've never had one. I have excellent credit, although I don't make much money. I'm sure I can find a shitty one, to start building a history - but I'm still in the process of applying, getting rejected...
I would recommend a secured card, where you basically put down a chunk of cash ($200, $500, whatever), which then becomes your credit limit and serves as collateral. It's a good way to start building credit. After a year or two of using that card, you should be able to move to an unsecured account without trouble.
posted by Autumnheart at 1:56 PM on November 21, 2018 [2 favorites]
I would recommend a secured card, where you basically put down a chunk of cash ($200, $500, whatever), which then becomes your credit limit and serves as collateral. It's a good way to start building credit. After a year or two of using that card, you should be able to move to an unsecured account without trouble.
posted by Autumnheart at 1:56 PM on November 21, 2018 [2 favorites]
Yeah, to me the addressable problems look like a mixture of learned-helplessness "it'll never get better so who cares, we'll just deal with it until one of us dies" and using money to soothe anxiety/sadness/bad emotions. There are definitely systematic issues - advertising, easy credit, some medical debt, bank shadiness, being failed when they reached out for help, etc. - but I don't have that much insight into how to fix them because they're so huge and intractable.
Access to mental health care and stigma about reaching out is probably an additional factor since an actual therapist might be able to figure out what exactly is going on - compulsive shopping, impulse control problems, being overwhelmed with emotion, shame (so much shame! and it's counterproductive because it's leading them to obscure how bad the problem is), maybe adult ADHD, who knows.
posted by en forme de poire at 1:57 PM on November 21, 2018 [4 favorites]
Access to mental health care and stigma about reaching out is probably an additional factor since an actual therapist might be able to figure out what exactly is going on - compulsive shopping, impulse control problems, being overwhelmed with emotion, shame (so much shame! and it's counterproductive because it's leading them to obscure how bad the problem is), maybe adult ADHD, who knows.
posted by en forme de poire at 1:57 PM on November 21, 2018 [4 favorites]
I am involved in personal finance communities, and honestly this story is not that shocking to me. These kinds of stories are always very tragic to me because it IS possible to get out from under massive amounts of debt - I see it every day - but until the underlying anxiety and/or depression is handled, they're not going to be able to follow any plan.
posted by muddgirl at 2:03 PM on November 21, 2018 [16 favorites]
posted by muddgirl at 2:03 PM on November 21, 2018 [16 favorites]
Yeah, to me the addressable problems look like a mixture of learned-helplessness "it'll never get better so who cares, we'll just deal with it until one of us dies" and using money to soothe anxiety/sadness/bad emotions.
Totally. I had an ex who had major compulsive spending issues, and that was his attitude toward the whole issue. He joined Debtors Anonymous for a while (before we dated) and while he was actively engaged in the group, it helped him, but he fell off the wagon and went back to spending compulsively. During the course of our 8-month relationship, he lost his house to foreclosure because he was borrowing money from his parents to cover his mortgage payment, and spending the whole shebang at the mall. Oy. (neo_dodging_bullets.gif)
posted by Autumnheart at 2:03 PM on November 21, 2018 [6 favorites]
Totally. I had an ex who had major compulsive spending issues, and that was his attitude toward the whole issue. He joined Debtors Anonymous for a while (before we dated) and while he was actively engaged in the group, it helped him, but he fell off the wagon and went back to spending compulsively. During the course of our 8-month relationship, he lost his house to foreclosure because he was borrowing money from his parents to cover his mortgage payment, and spending the whole shebang at the mall. Oy. (neo_dodging_bullets.gif)
posted by Autumnheart at 2:03 PM on November 21, 2018 [6 favorites]
Reading that just gave me a panic attack, for real.
I just...I can't see these people as victims. Everything they've done has been purely optional. They don't communicate, they lie, they accepted money from less-well-off family and then just kept on doing what they were doing. They were not forced into this position by health problems or catastrophe or generational poverty or escaping toxic family. Banks should stop lending to them, yes, but those same banks would lend just as much to me and yet I'm able to not take them up on that blatantly bad idea.
posted by soren_lorensen at 2:06 PM on November 21, 2018 [41 favorites]
I just...I can't see these people as victims. Everything they've done has been purely optional. They don't communicate, they lie, they accepted money from less-well-off family and then just kept on doing what they were doing. They were not forced into this position by health problems or catastrophe or generational poverty or escaping toxic family. Banks should stop lending to them, yes, but those same banks would lend just as much to me and yet I'm able to not take them up on that blatantly bad idea.
posted by soren_lorensen at 2:06 PM on November 21, 2018 [41 favorites]
I pictured being like a crunchy legal services lawyer kind of girl who lived very minimally. And now I live in the suburbs, and there are people who live around me who have seven cars and fly off to Italy for three weeks. It’s weird.
I think a lot of this is expectations set by their neighbors and peers and feeling expected to keep up. Like, they could declare bankruptcy, downsize, move to a smaller town, smaller house -- but it is so easy to type those things and an awful lot harder to move actual human lives around, which is terrifying when you're older. It's not so terrifying when you're 25.
If I had one piece of advice to offer them it would be 'stop looking at your neighbors' and 'stop expecting to keep up with them' and 'stop feeling like the world's worst thing would be telling a kid something is too expensive'.
posted by A Terrible Llama at 2:06 PM on November 21, 2018 [20 favorites]
I think a lot of this is expectations set by their neighbors and peers and feeling expected to keep up. Like, they could declare bankruptcy, downsize, move to a smaller town, smaller house -- but it is so easy to type those things and an awful lot harder to move actual human lives around, which is terrifying when you're older. It's not so terrifying when you're 25.
If I had one piece of advice to offer them it would be 'stop looking at your neighbors' and 'stop expecting to keep up with them' and 'stop feeling like the world's worst thing would be telling a kid something is too expensive'.
posted by A Terrible Llama at 2:06 PM on November 21, 2018 [20 favorites]
That was three pieces of advice.
posted by A Terrible Llama at 2:07 PM on November 21, 2018 [20 favorites]
posted by A Terrible Llama at 2:07 PM on November 21, 2018 [20 favorites]
Try moving your money to a credit union, then getting a card with them.
My money is already in a credit union, and I have debit card with them that can also be run as credit in some places. The problem is, if something happens to that card - such as a travel permission not going through, or my number being stolen - I don't have a back-up.
I'm not sure if I'm being declined because I don't look like a good mark, or because they think there's something shady going on. But, I brought it up for a reason, which is to point out just how normalized it's become to have credit card debt: Never having any makes the algorithms throw up red flags.
posted by Kutsuwamushi at 2:08 PM on November 21, 2018
My money is already in a credit union, and I have debit card with them that can also be run as credit in some places. The problem is, if something happens to that card - such as a travel permission not going through, or my number being stolen - I don't have a back-up.
I'm not sure if I'm being declined because I don't look like a good mark, or because they think there's something shady going on. But, I brought it up for a reason, which is to point out just how normalized it's become to have credit card debt: Never having any makes the algorithms throw up red flags.
posted by Kutsuwamushi at 2:08 PM on November 21, 2018
Tom: This is the kind of thing that poor people do. And I’d consider myself that.
Like I said above, I feel for them. But he has no idea what poor feels like. (I don't really, anymore, and I spent the first 25 years of my life objectively poor, though never starving, at least, after I was about 3 or 4).
There is something so very different about being cash-strapped and being poor. Maybe it's that being poor doesn't mean having had money and spent too much and being stressed. It's about not having had money and not getting to spend ever - and still being super, super stressed, only without ever having enjoyed the sushi or vacation or whatever.
posted by jb at 2:09 PM on November 21, 2018 [16 favorites]
Like I said above, I feel for them. But he has no idea what poor feels like. (I don't really, anymore, and I spent the first 25 years of my life objectively poor, though never starving, at least, after I was about 3 or 4).
There is something so very different about being cash-strapped and being poor. Maybe it's that being poor doesn't mean having had money and spent too much and being stressed. It's about not having had money and not getting to spend ever - and still being super, super stressed, only without ever having enjoyed the sushi or vacation or whatever.
posted by jb at 2:09 PM on November 21, 2018 [16 favorites]
I think a lot of this is expectations set by their neighbors and peers and feeling expected to keep up.
And this too. We had friends who kind of went this way. They moved to a high status suburb and started mixing with higher income suburban types and their whole notion of what's reasonable to spend on a night out, a house, things for their kids, technology shifted. Except they were a single income family where that single income was a public school teacher. They started dipping into retirement, which was bonkers to me. Like, you're reducing your ability to live when you're older so you can make sure your phone is the same as the insufferable friends that you admit you don't even really like that much? Wtf?
posted by soren_lorensen at 2:13 PM on November 21, 2018 [12 favorites]
Alternatively, they are selfish, irresponsible, and/or spoiled. The fact that their parents ponied up 40k (!!!) says it all. I won’t feel bad for banks when/if the carousel stops, but I don’t feel bad for them, either. Spongers gonna sponge.
I mean completely do not lend these people a dime, but also being like "they're just bad/selfish/irresponsible" doesn't really illuminate much. If they internalized that (and I'm sure they probably have), it would just logically lead directly to their "lie down and rot" conclusion. If they were just scammers who were wilfully exploiting people, then sure, fuck 'em -- but they're clearly miserable, so it's not like they're running some brilliant graft on everyone. Personally I think it's more interesting to ask why they're unable to help themselves and what would enable them to make better choices... and whether there are social barriers/incentives that encourage this kind of misery that we would all be better off having fixed (even if those factors are not the only or even primary cause).
posted by en forme de poire at 2:18 PM on November 21, 2018 [14 favorites]
I mean completely do not lend these people a dime, but also being like "they're just bad/selfish/irresponsible" doesn't really illuminate much. If they internalized that (and I'm sure they probably have), it would just logically lead directly to their "lie down and rot" conclusion. If they were just scammers who were wilfully exploiting people, then sure, fuck 'em -- but they're clearly miserable, so it's not like they're running some brilliant graft on everyone. Personally I think it's more interesting to ask why they're unable to help themselves and what would enable them to make better choices... and whether there are social barriers/incentives that encourage this kind of misery that we would all be better off having fixed (even if those factors are not the only or even primary cause).
posted by en forme de poire at 2:18 PM on November 21, 2018 [14 favorites]
I’m mad about this article, because instead of a conversation about how devastating it is to be in debt, it’s yet another conversation about poor choices and irresponsibility.
I’m glad people recognize the mental health component to this, but it’s hard to talk about how mental health affects other people in debt, when the overwhelming response here is “these people did it to themselves.”
I feel for them to some degree, but their experience has been so different from my own that I just can’t relate at all. And now the conversation is about the same message as always, that you should have lived within your means, because no one forced you to go into debt.
posted by shapes that haunt the dusk at 2:19 PM on November 21, 2018 [27 favorites]
I’m glad people recognize the mental health component to this, but it’s hard to talk about how mental health affects other people in debt, when the overwhelming response here is “these people did it to themselves.”
I feel for them to some degree, but their experience has been so different from my own that I just can’t relate at all. And now the conversation is about the same message as always, that you should have lived within your means, because no one forced you to go into debt.
posted by shapes that haunt the dusk at 2:19 PM on November 21, 2018 [27 favorites]
It strikes me that in many discussions of low income housing people talk about how mixed-income communities are better for the poor. Which implies that mixed neighborhoods are worse for the well-off. But this is an example of why that is not true. If they had the same income, but lived on a street where there were people with a variety of incomes, they would be more comfortable with the idea of NOT keeping up with the Joneses. Suppose they had people nearby who they liked and wanted to impress, who did not have Jaguars and go to Italy? What if they lived on a street where they worried that doing that would make them look like ostentatious jerks? This might be especially good for their kids.
posted by elizilla at 2:25 PM on November 21, 2018 [27 favorites]
posted by elizilla at 2:25 PM on November 21, 2018 [27 favorites]
I think a lot of this is expectations set by their neighbors and peers and feeling expected to keep up.
I don't even think it's about neighbors. It's about societal expectations of what it is to be middle-class. Like - there was once a time where being middle class meant, by default, that you could buy a house, take a vacation a year, and go to a decent doctor, send your kids to summer camp, eat out once a week or so, have a ton of food, and even pay to send your kids to college. Like - a lot of this has changed just in the last thirty years. These things and standard of living are just not really achievable in the same way anymore. Wages compared to costs are not at the same level as they used to be, at all. But the expectations haven't changed. And that's causing a lot of stress on people, as they do increasingly more desperate things to meet a standard of living that is essentially disappearing.
posted by corb at 2:25 PM on November 21, 2018 [30 favorites]
I don't even think it's about neighbors. It's about societal expectations of what it is to be middle-class. Like - there was once a time where being middle class meant, by default, that you could buy a house, take a vacation a year, and go to a decent doctor, send your kids to summer camp, eat out once a week or so, have a ton of food, and even pay to send your kids to college. Like - a lot of this has changed just in the last thirty years. These things and standard of living are just not really achievable in the same way anymore. Wages compared to costs are not at the same level as they used to be, at all. But the expectations haven't changed. And that's causing a lot of stress on people, as they do increasingly more desperate things to meet a standard of living that is essentially disappearing.
posted by corb at 2:25 PM on November 21, 2018 [30 favorites]
being like "they're just bad/selfish/irresponsible" doesn't really illuminate much.
They're not *just* bad/selfish/irresponsible. But they are also those things, and the combination of that and the fact that they are living in a fancy neighborhood with a nearly new car and kids in private school, means it's hard to see the story as a reflection on systemic debt problems instead of "here's some over-privileged moderately well-off people who are very, very stressed out that the Yuppie lifestyle didn't haul in the money they think they deserve."
It really sounds like they thought that, since they both had good paying jobs - not amazing pay, but what they know is good pay - they should never have to think about budgeting, and they were shocked to find out it doesn't work that way, and now they live in constant stress because they're still not willing to learn the basics of How To Spend Tomorrow's Money Today Without Destroying Tomorrow.
posted by ErisLordFreedom at 2:28 PM on November 21, 2018 [9 favorites]
They're not *just* bad/selfish/irresponsible. But they are also those things, and the combination of that and the fact that they are living in a fancy neighborhood with a nearly new car and kids in private school, means it's hard to see the story as a reflection on systemic debt problems instead of "here's some over-privileged moderately well-off people who are very, very stressed out that the Yuppie lifestyle didn't haul in the money they think they deserve."
It really sounds like they thought that, since they both had good paying jobs - not amazing pay, but what they know is good pay - they should never have to think about budgeting, and they were shocked to find out it doesn't work that way, and now they live in constant stress because they're still not willing to learn the basics of How To Spend Tomorrow's Money Today Without Destroying Tomorrow.
posted by ErisLordFreedom at 2:28 PM on November 21, 2018 [9 favorites]
I'll step back after this but I think we are still capable of having a different type of conversation about debt, even in response to this story. For example, is there any analogy that can be made to harm-reduction for people whose spending is out of control and hurting themselves/others -- what would that look like? What treatments actually work for someone who spends in this way? Have we ever even really rigorously evaluated them? (Actual question, I know very little about this.) Are there social issues hidden between the lines here? (I alluded to the medical debt; one other that just jumped out at me is how they did have their daughter in public school, but had to pull her out because she was experiencing violence. That's hard to argue with. So what is wrong with our society that it is necessary to pull a child out of public school for their own physical safety? What needs to change so that this is no longer the case?) Is the stigma around being in debt actually worsening this problem for them, by making it so shameful to talk about that they feel they can't be honest with people except behind the veil of anonymity? Etc.
posted by en forme de poire at 2:31 PM on November 21, 2018 [11 favorites]
posted by en forme de poire at 2:31 PM on November 21, 2018 [11 favorites]
I just...I can't see these people as victims.
I don't think we are being asked to (in fact, I think the article is deliberately encouraging us not too). But I think we can also acknowledge that the couple has made some very bad decisions while also pointing out that financial institutions are complicit in enabling this behaviour. In fact, it would be fascinating to get an article that presented the financial institution side of this situation - why do you keep lending to this family? What's the decision making process? But we're not going to get that.
And here's what likely happens at the end of this story: the family suffers health problems (physical and/or mental), declares bankruptcy, and falls apart. Their creditors get some money from the various insurance policies or whatever other instrument they've created that allows them to still get paid in the event of a default, rinses, and repeats.
posted by nubs at 2:32 PM on November 21, 2018 [9 favorites]
I don't think we are being asked to (in fact, I think the article is deliberately encouraging us not too). But I think we can also acknowledge that the couple has made some very bad decisions while also pointing out that financial institutions are complicit in enabling this behaviour. In fact, it would be fascinating to get an article that presented the financial institution side of this situation - why do you keep lending to this family? What's the decision making process? But we're not going to get that.
And here's what likely happens at the end of this story: the family suffers health problems (physical and/or mental), declares bankruptcy, and falls apart. Their creditors get some money from the various insurance policies or whatever other instrument they've created that allows them to still get paid in the event of a default, rinses, and repeats.
posted by nubs at 2:32 PM on November 21, 2018 [9 favorites]
I think one thing that drives me a bit nuts about this--as someone who had no debt three years ago and now has a fair amount, due to divorce, non-paying clients, slow business and just my usual bone-headed financial choices--is that there are probably very few people leaving comments here who would not be in the same predicament as these folks if you ended up with a chronic debilitating illness, or a legal issue, or...
I'm not endorsing a Trump-esque lifestyle for all, but there are so many ways for the world to fuck us in our glorious capitalist society, and there's a fair amount of luck involved in not accumulating mountains of debt.
posted by maxwelton at 2:36 PM on November 21, 2018 [10 favorites]
I'm not endorsing a Trump-esque lifestyle for all, but there are so many ways for the world to fuck us in our glorious capitalist society, and there's a fair amount of luck involved in not accumulating mountains of debt.
posted by maxwelton at 2:36 PM on November 21, 2018 [10 favorites]
I'm also having a panic attack reading that. The idea that you have so much debt that you don't know the actual number, or how many credit cards you have. Where the stress of it has you so bereft of joy that your only solace is awful Adam Corolla podcasts.
I had a dear friend who has a debt problem. When I met her, she had maybe $15K of credit card debt. She paid the minimum when she could. Fifteen years later, it had rocketed up to $60K plus a car note. She had a good job and could have bought, but the more immediate credit payments held her in the same rented apartment for 19 years. Had she had the freedom to take out a mortgage, she'd probably have paid most of that off by now with an eye to retirement.
She said at one point that her debt got so high that it stopped being an actual number for her. It was more of a nebulous thing, and she was so far in that adding another $100 or $300 or $500 to the total never actually hurt because it was just a concept to her by then.
A few years ago, she declared bankrupcty. She said it was the biggest relief of her life after so many sleepless nights and stress that wracked her whole body.
But then within a year it started again. Without a credit card, she finds herself bargaining. She will negotiate hardship with medical providers for free or reduced costs for her medical care, but then the whole negotiation process will stress her out so much that she'll go buy a stack of blu-rays she'll never watch. Friends would treat her to dinner to help her keep her budget on point, only to find piles of shopping bags and amazon boxes on her dining room table.
It's so difficult to break these patterns. The stress and regret and embarrassment. I'm not sure how people can even begin to break free.
posted by mochapickle at 2:43 PM on November 21, 2018 [14 favorites]
I had a dear friend who has a debt problem. When I met her, she had maybe $15K of credit card debt. She paid the minimum when she could. Fifteen years later, it had rocketed up to $60K plus a car note. She had a good job and could have bought, but the more immediate credit payments held her in the same rented apartment for 19 years. Had she had the freedom to take out a mortgage, she'd probably have paid most of that off by now with an eye to retirement.
She said at one point that her debt got so high that it stopped being an actual number for her. It was more of a nebulous thing, and she was so far in that adding another $100 or $300 or $500 to the total never actually hurt because it was just a concept to her by then.
A few years ago, she declared bankrupcty. She said it was the biggest relief of her life after so many sleepless nights and stress that wracked her whole body.
But then within a year it started again. Without a credit card, she finds herself bargaining. She will negotiate hardship with medical providers for free or reduced costs for her medical care, but then the whole negotiation process will stress her out so much that she'll go buy a stack of blu-rays she'll never watch. Friends would treat her to dinner to help her keep her budget on point, only to find piles of shopping bags and amazon boxes on her dining room table.
It's so difficult to break these patterns. The stress and regret and embarrassment. I'm not sure how people can even begin to break free.
posted by mochapickle at 2:43 PM on November 21, 2018 [14 favorites]
I think a lot of this is expectations set by their neighbors and peers and feeling expected to keep up...I don't even think it's about neighbors. It's about societal expectations of what it is to be middle-class.
I think it's both. I wanted for nothing substantial when I was a child, but my parents also did not shy away from telling myself and my siblings when we as a family simply could not afford something, whether it be a new couch to replace the one the cats were in the process of destroying, or a vacation, or whatever. However, my family's standard of living appeared to be more or less the same as most of the people I knew at that age, friends and relatives alike, so there was (for me at least, even when I got old enough to understand something of financial disparities) not a "better" materialistic ideal to aspire to. But the bottom line is that my parents did not play that game. Now I'm 45 and my wife (who has the same attitude towards money and spending as I do) and I don't have a penny of debt, in part because we've been very, very lucky in many ways, but also because we have made conscious choices involving our spending that do not include Keeping Up With The Jones' For Appearances Sake. Our (rented) apartment is probably pretty rough around the edges by the standards of many people in our peer group, and while I feel no shame about this one of the most disappointing experiences of my adult life has been learning that there are people I know who look down on us because we live in a house which, I guess, does not meet their expectations of what it is to be middle-class. But we're not going to, as ErisLordFreedom put it, Spend Tomorrow's Money Today in order to conform to somebody else's idea of how we "should" be living.
posted by The Card Cheat at 2:46 PM on November 21, 2018 [10 favorites]
I think it's both. I wanted for nothing substantial when I was a child, but my parents also did not shy away from telling myself and my siblings when we as a family simply could not afford something, whether it be a new couch to replace the one the cats were in the process of destroying, or a vacation, or whatever. However, my family's standard of living appeared to be more or less the same as most of the people I knew at that age, friends and relatives alike, so there was (for me at least, even when I got old enough to understand something of financial disparities) not a "better" materialistic ideal to aspire to. But the bottom line is that my parents did not play that game. Now I'm 45 and my wife (who has the same attitude towards money and spending as I do) and I don't have a penny of debt, in part because we've been very, very lucky in many ways, but also because we have made conscious choices involving our spending that do not include Keeping Up With The Jones' For Appearances Sake. Our (rented) apartment is probably pretty rough around the edges by the standards of many people in our peer group, and while I feel no shame about this one of the most disappointing experiences of my adult life has been learning that there are people I know who look down on us because we live in a house which, I guess, does not meet their expectations of what it is to be middle-class. But we're not going to, as ErisLordFreedom put it, Spend Tomorrow's Money Today in order to conform to somebody else's idea of how we "should" be living.
posted by The Card Cheat at 2:46 PM on November 21, 2018 [10 favorites]
I think the really depressing thing is that for anyone in debt, there’s something that you know will exempt you from sympathy. Oh, I know shouldn’t have taken on this debt in the first place. Oh, I know I shouldn’t buy books when I can get them for free from the library. Oh, someone bought me an expensive gift, how could I ever call myself poor?
So you’re reluctant to talk about those things, because you feel guilty for them. I’m massively in debt, but did you know that I buy records? I’m massively, desperately in debt, but I buy records because it gives me something to look forward to. Cheap records, but it’s not nothing. I know I could save that money, and I know this an unnecessary expense, so I have no excuse.
Sure, the money feels imaginary. I pay through the nose for loans, and I don’t even have health insurance. And the loan balances continue to go up! Loan payments feel completely disconnected from anything tangible. At least a record is something I can hold in my hand.
And there goes any notion that I deserve sympathy, because if I were smart I’d be putting that money toward the debt, prioritizing the loan with the highest interest. If I weren’t so stupid, I wouldn’t even have gotten these loans in the first place, because they weren't even necessary at the time.
It’s almost like this article was calculated to hit every mark, so that even people who generally care about debt can be convinced that these are selfish, awful people. Let’s guarantee that everything they do is exactly the wrong thing to do.
It often feels like the only way anyone takes your debt seriously is if you’re already living on ramen, never spending on anything but your debt, because that’s what a responsible person does. I mean, I know there’s a lot of ground between ramen and “house and car and vacations and kids in private school,” but from the debtors perspective, it doesn’t seem like that much.
Yes, let’s absolutely question what we expect out of life. Let’s question middle class values and possessions and what you deserve for your paycheck. But also, why was this article written? Why this couple? What is this discussion accomplishing, except cementing what people already thought they knew about debt and debtors?
posted by shapes that haunt the dusk at 2:46 PM on November 21, 2018 [57 favorites]
So you’re reluctant to talk about those things, because you feel guilty for them. I’m massively in debt, but did you know that I buy records? I’m massively, desperately in debt, but I buy records because it gives me something to look forward to. Cheap records, but it’s not nothing. I know I could save that money, and I know this an unnecessary expense, so I have no excuse.
Sure, the money feels imaginary. I pay through the nose for loans, and I don’t even have health insurance. And the loan balances continue to go up! Loan payments feel completely disconnected from anything tangible. At least a record is something I can hold in my hand.
And there goes any notion that I deserve sympathy, because if I were smart I’d be putting that money toward the debt, prioritizing the loan with the highest interest. If I weren’t so stupid, I wouldn’t even have gotten these loans in the first place, because they weren't even necessary at the time.
It’s almost like this article was calculated to hit every mark, so that even people who generally care about debt can be convinced that these are selfish, awful people. Let’s guarantee that everything they do is exactly the wrong thing to do.
It often feels like the only way anyone takes your debt seriously is if you’re already living on ramen, never spending on anything but your debt, because that’s what a responsible person does. I mean, I know there’s a lot of ground between ramen and “house and car and vacations and kids in private school,” but from the debtors perspective, it doesn’t seem like that much.
Yes, let’s absolutely question what we expect out of life. Let’s question middle class values and possessions and what you deserve for your paycheck. But also, why was this article written? Why this couple? What is this discussion accomplishing, except cementing what people already thought they knew about debt and debtors?
posted by shapes that haunt the dusk at 2:46 PM on November 21, 2018 [57 favorites]
$15 for sushi at Whole Foods? C'mon you can get a double-meal worth of kimbap at H-Mart for $7. That's why they're broke.
Oh my god reading that made me SO STRESSED. My ex-wife was a person who used money and spending in order to make herself feel valid and valued by society. So we were always BROKE. and IN DEBT. Even though I was making $50/hr, and this was 20 years ago.
It's absolutely a personal problem, exacerbated by social pressure, taken advantage of by the financial marketplace. The only solution for the people in TFA is bankruptcy, and the only solution for everyone else is tight, tight regulation. Which would be really nice to get but not in this administration.
posted by seanmpuckett at 2:47 PM on November 21, 2018 [3 favorites]
Oh my god reading that made me SO STRESSED. My ex-wife was a person who used money and spending in order to make herself feel valid and valued by society. So we were always BROKE. and IN DEBT. Even though I was making $50/hr, and this was 20 years ago.
It's absolutely a personal problem, exacerbated by social pressure, taken advantage of by the financial marketplace. The only solution for the people in TFA is bankruptcy, and the only solution for everyone else is tight, tight regulation. Which would be really nice to get but not in this administration.
posted by seanmpuckett at 2:47 PM on November 21, 2018 [3 favorites]
These folks have not suffered a major medical incident or job loss, and they make 2.5x the national median income. So what's the problem? I would say it's, fundamentally, one of perception. If you're not able to save a dollar in a decade, you're not even middle class, no matter how many trappings of upper-middle-class lifestyle you have. The perception problem can work the other way, as well. I am always shocked how many people consider themselves upper middle class when they have a net worth that clearly puts them into the top 5% or even higher.
posted by wnissen at 2:47 PM on November 21, 2018 [2 favorites]
posted by wnissen at 2:47 PM on November 21, 2018 [2 favorites]
I have a law degree. I don’t practice law though. When I got pregnant with our first, I took the highest-paying job I could find that still allowed me to stay homeIf I wanted to be judgmental, this is the part that screams "Bad Idea Jeans" to me, so I find it weird that most of the commentariat (here and elsewhere) seem to be focusing on the Whole Foods sushi.
posted by Ralston McTodd at 3:05 PM on November 21, 2018 [14 favorites]
There's so much to unpack here, but honestly one of the biggest lies I think people have been fed and/or bought into is the idea that buying a house "saves you money" or is a good idea when you already have debt. I realize this is not the case across the board, but - I'm 33. I've lived in 3 different cities as an adult with very different costs of living. I have a lot of student loans and credit card that's small but unshakable. It has never seemed like a good or even break-even financial idea to buy a house. Their mortgage numbers boggle me more than anything else. They had huge student debt and knew it and had a house and dropped mad cash on a different house because they wanted one more bedroom?!
posted by nakedmolerats at 3:11 PM on November 21, 2018 [5 favorites]
posted by nakedmolerats at 3:11 PM on November 21, 2018 [5 favorites]
You can take out debt to go to college or you can try to make a living with jobs that will hire someone without a degree, both of which are usually shitty options.
Trades. I know people say this all the time but if I had it to do again I'd go straight into the trades. Electricians at my company make roughly $100k/year, plus overtime, and our pay rates aren't even that great, frankly. (We do have excellent benefits.) It's interesting, highly skilled work with lots of options for specialization. You can be an independent businessperson, you can work for an international megacorp, or anything in between. Unemployment is basically 0%—pretty much all of our electricians were poached from other conpanies or trained up in-house. And you get paid to learn the work. You train on the job. Nobody takes out loans to become an electrician!
posted by Anticipation Of A New Lover's Arrival, The at 3:13 PM on November 21, 2018 [17 favorites]
Trades. I know people say this all the time but if I had it to do again I'd go straight into the trades. Electricians at my company make roughly $100k/year, plus overtime, and our pay rates aren't even that great, frankly. (We do have excellent benefits.) It's interesting, highly skilled work with lots of options for specialization. You can be an independent businessperson, you can work for an international megacorp, or anything in between. Unemployment is basically 0%—pretty much all of our electricians were poached from other conpanies or trained up in-house. And you get paid to learn the work. You train on the job. Nobody takes out loans to become an electrician!
posted by Anticipation Of A New Lover's Arrival, The at 3:13 PM on November 21, 2018 [17 favorites]
I find it weird that most of the commentariat (here and elsewhere) seem to be focusing on the Whole Foods sushi.
I've not mentioned it because ...well, first, there's a long, ugly history of telling poor folks that they shouldn't have kids, and then blaming when them systemic economic injustice makes raising those kids harder. There is no good reason that any family should have difficulty providing for their children in a just society, and even when those children are well provided for there is still a lot of shaming. These people aren't poor, but I don't want to be anywhere adjacent to that.
But second, $160,000 is plenty for a family that size, unless there's some unexpected issue (like an expensive medical condition). The problem isn't that she left law to have kids, or that the kids are expensive. The problem is that they're not able to stop spending an excessive amount of money. The kids make the situation worse than it would otherwise have been, but without them they'd probably still be in a similar situation because they can't stop.
Focusing on the kids seems a bit inhumane, and I say that as a happily childfree person who loves not spending money on kids.
posted by Kutsuwamushi at 3:19 PM on November 21, 2018 [12 favorites]
I've not mentioned it because ...well, first, there's a long, ugly history of telling poor folks that they shouldn't have kids, and then blaming when them systemic economic injustice makes raising those kids harder. There is no good reason that any family should have difficulty providing for their children in a just society, and even when those children are well provided for there is still a lot of shaming. These people aren't poor, but I don't want to be anywhere adjacent to that.
But second, $160,000 is plenty for a family that size, unless there's some unexpected issue (like an expensive medical condition). The problem isn't that she left law to have kids, or that the kids are expensive. The problem is that they're not able to stop spending an excessive amount of money. The kids make the situation worse than it would otherwise have been, but without them they'd probably still be in a similar situation because they can't stop.
Focusing on the kids seems a bit inhumane, and I say that as a happily childfree person who loves not spending money on kids.
posted by Kutsuwamushi at 3:19 PM on November 21, 2018 [12 favorites]
Focusing on the kids seems a bit inhumane
Not the decision to have kids. The decision to drastically curtail one of the parents' careers -- just coincidentally the mother (after incurring massive debt to attain that career).
posted by Ralston McTodd at 3:24 PM on November 21, 2018 [7 favorites]
Not the decision to have kids. The decision to drastically curtail one of the parents' careers -- just coincidentally the mother (after incurring massive debt to attain that career).
posted by Ralston McTodd at 3:24 PM on November 21, 2018 [7 favorites]
They don't mention where exactly in the Northeast they live but in my mind the fact they built a new house, in 2007, so the height of the housing market, for $360k, doesn't exactly square with "and there are people who live around me who have seven cars and fly off to Italy for three weeks." Keeping up with the Jones, yes, but a very, very selective subset of the Jones. I'm not sure that their neighborhood is really the problem here but the private school may very well be.
posted by eeek at 3:26 PM on November 21, 2018 [5 favorites]
posted by eeek at 3:26 PM on November 21, 2018 [5 favorites]
The only thing that jumped out for me as a mistake I'd give the side-eye to is the husband's reluctance to work with a financial advisor.
Back in August I started working with a financial counselor free through a city program. I meet with her once a month, and we look at my progress towards my financial goals (I told her my goal was "to pay down debt", and she gave me a come-to-Jesus about adding a second goal of "build up emergency savings"). She's coached me into taking a good look at my monthly budget (which let me see right away that I was way overspending in one place I didn't need to, so I reeled that in), given me pointers on how to negotiate things with my bank, and helps me figure out which debt pay-down plan would suit me best.
Except for that one place I was overspending, the impact on my day-to-day living is minimal - I don't really feel like I've been making huge changes to my life. Instead, it's more like a subliminal awareness that makes me less likely to splurge or overspend. She also corrected some incorrect ideas I had about how credit worked - I got a lot of offers to raise my credit limit on my credit card, and I would always throw them away - but she told me that "no, actually, in your case that might improve your credit score" and explained why that was the case. (She added that, "of course, I'm also only recommending this because I have a feeling you won't USE it, now will you?")
This is debt that's been building since the financial crash, and which I've been unable to pay down sooner because the financial crash had me struggling with being underpaid. But - when I went into see her my total debt was just over $15K, and only 4 months later, my debt is now under $13,750 and I'm about to pay off one of my credit cards entirely.
There is indeed a way out of debt - and a financial adviser can help you find it, because that is what they are there to do. Strongly, strongly recommend that move to anyone, and I'm honestly baffled why our friends in this article are rejecting that help.
posted by EmpressCallipygos at 3:26 PM on November 21, 2018 [21 favorites]
Back in August I started working with a financial counselor free through a city program. I meet with her once a month, and we look at my progress towards my financial goals (I told her my goal was "to pay down debt", and she gave me a come-to-Jesus about adding a second goal of "build up emergency savings"). She's coached me into taking a good look at my monthly budget (which let me see right away that I was way overspending in one place I didn't need to, so I reeled that in), given me pointers on how to negotiate things with my bank, and helps me figure out which debt pay-down plan would suit me best.
Except for that one place I was overspending, the impact on my day-to-day living is minimal - I don't really feel like I've been making huge changes to my life. Instead, it's more like a subliminal awareness that makes me less likely to splurge or overspend. She also corrected some incorrect ideas I had about how credit worked - I got a lot of offers to raise my credit limit on my credit card, and I would always throw them away - but she told me that "no, actually, in your case that might improve your credit score" and explained why that was the case. (She added that, "of course, I'm also only recommending this because I have a feeling you won't USE it, now will you?")
This is debt that's been building since the financial crash, and which I've been unable to pay down sooner because the financial crash had me struggling with being underpaid. But - when I went into see her my total debt was just over $15K, and only 4 months later, my debt is now under $13,750 and I'm about to pay off one of my credit cards entirely.
There is indeed a way out of debt - and a financial adviser can help you find it, because that is what they are there to do. Strongly, strongly recommend that move to anyone, and I'm honestly baffled why our friends in this article are rejecting that help.
posted by EmpressCallipygos at 3:26 PM on November 21, 2018 [21 favorites]
Not the decision to have kids. The decision to drastically curtail one of the parents' careers -- just coincidentally the mother (after incurring massive debt to attain that career).
I think people aren't focussing on the wife's career choices because she and her husband both still have quite high incomes. Her salary of $70k puts her at about the 75th percentile for individual income, and on its own that puts them over the U.S. median household income. And women with law degrees not actually practicing law is a known thing.
posted by Secret Sparrow at 3:43 PM on November 21, 2018 [6 favorites]
I think people aren't focussing on the wife's career choices because she and her husband both still have quite high incomes. Her salary of $70k puts her at about the 75th percentile for individual income, and on its own that puts them over the U.S. median household income. And women with law degrees not actually practicing law is a known thing.
posted by Secret Sparrow at 3:43 PM on November 21, 2018 [6 favorites]
There is indeed a way out of debt - and a financial adviser can help you find it, because that is what they are there to do. Strongly, strongly recommend that move to anyone, and I'm honestly baffled why our friends in this article are rejecting that help.
Shame, guilt, and fear would be my guesses - fear of confronting this monster head on, of actually naming the problem, accepting the need for change, and acting on it.
posted by nubs at 3:44 PM on November 21, 2018 [5 favorites]
Shame, guilt, and fear would be my guesses - fear of confronting this monster head on, of actually naming the problem, accepting the need for change, and acting on it.
posted by nubs at 3:44 PM on November 21, 2018 [5 favorites]
FYI, there is actually a limited time frame when a woman can get pregnant. So waiting to have kids until all the debt’s paid off may have seemed too risky.
And, hiring childcare is often way more expensive than just staying home and not working. Getting a job from home so she could be with her kids is like, the one good decision this lady made.
Everybody has the right to reproduce, or to abstain from doing so, regardless of their income.
posted by shalom at 3:45 PM on November 21, 2018 [13 favorites]
And, hiring childcare is often way more expensive than just staying home and not working. Getting a job from home so she could be with her kids is like, the one good decision this lady made.
Everybody has the right to reproduce, or to abstain from doing so, regardless of their income.
posted by shalom at 3:45 PM on November 21, 2018 [13 favorites]
Trades.
My reaction to "trades!" is the same reaction I have to "STEM degrees!" at this point: it has worked for many, it doesn't work for everyone due to circumstance/geography/ability, and I do in fact know people who went into trades and had the aptitude and physical stamina but still couldn't find work or wound up in debt from the training (sometimes both!). Because there truly is no silver bullet, and when we tell people there is, we end up with accreditation deflation bubbles like the law degree bubble and the STEM degree bubble and the any-college-degree bubble.
posted by halation at 3:46 PM on November 21, 2018 [40 favorites]
My reaction to "trades!" is the same reaction I have to "STEM degrees!" at this point: it has worked for many, it doesn't work for everyone due to circumstance/geography/ability, and I do in fact know people who went into trades and had the aptitude and physical stamina but still couldn't find work or wound up in debt from the training (sometimes both!). Because there truly is no silver bullet, and when we tell people there is, we end up with accreditation deflation bubbles like the law degree bubble and the STEM degree bubble and the any-college-degree bubble.
posted by halation at 3:46 PM on November 21, 2018 [40 favorites]
And, hiring childcare is often way more expensive than just staying home and not working.
I don't have kids personally, but from talking to postdocs in my area who are parents and from looking online, daycare can easily cost $30K a year here, and not even fancy daycare. My impression is that the type of law job where you take home six figures is not 9-5 and is pretty high-stress, so extra help would have probably been required beyond that. Maybe it would have ultimately paid off to have a higher-ceiling job 15 years post-kid, but it would still have required getting through those initial 15 years.
posted by en forme de poire at 3:56 PM on November 21, 2018
I don't have kids personally, but from talking to postdocs in my area who are parents and from looking online, daycare can easily cost $30K a year here, and not even fancy daycare. My impression is that the type of law job where you take home six figures is not 9-5 and is pretty high-stress, so extra help would have probably been required beyond that. Maybe it would have ultimately paid off to have a higher-ceiling job 15 years post-kid, but it would still have required getting through those initial 15 years.
posted by en forme de poire at 3:56 PM on November 21, 2018
I know I could save that money, and I know this an unnecessary expense, so I have no excuse.
... And there goes any notion that I deserve sympathy, because if I were smart I’d be putting that money toward the debt, prioritizing the loan with the highest interest.
There's a big difference between "I'm poor and see no way out of debt, and so I'm going to buy myself a small bit of happiness that makes the crushing stress a bit more bearable" and "we need to be driving a new car every three years, and we need not just a 4-bedroom house, but one in a neighborhood that makes us feel rich, and we don't have cash to rent a tux and of course we can't just withdraw enough cash for that because of the higher interest rates - let's just spend five times that much on a purchase, and then Eldest Kid will have a tux of his own (that will fit for maybe two years)."
... followed by, "I'm not filing for bankruptcy; that would mean I'm a failure; we're not failures; we just need... um... look, times are hard and we (sigh) just can't seem to figure out the debt problems."
(Wife should definitely research bankruptcy on her own. And whether or not she does that, should get a separate bank account from husband's, and the two of them should try tackling their debt problems separately, since "together" seems to lead to "oh it's all too much; just make the payment with whatever card still has space.")
I'd have a lot more sympathy for Mr. and Mrs. Anon Debt, if they showed the slightest bit of awareness of how hard it is if you *don't* have a house and parents willing to bail you out when those financial problems start stacking up.
posted by ErisLordFreedom at 3:57 PM on November 21, 2018 [9 favorites]
... And there goes any notion that I deserve sympathy, because if I were smart I’d be putting that money toward the debt, prioritizing the loan with the highest interest.
There's a big difference between "I'm poor and see no way out of debt, and so I'm going to buy myself a small bit of happiness that makes the crushing stress a bit more bearable" and "we need to be driving a new car every three years, and we need not just a 4-bedroom house, but one in a neighborhood that makes us feel rich, and we don't have cash to rent a tux and of course we can't just withdraw enough cash for that because of the higher interest rates - let's just spend five times that much on a purchase, and then Eldest Kid will have a tux of his own (that will fit for maybe two years)."
... followed by, "I'm not filing for bankruptcy; that would mean I'm a failure; we're not failures; we just need... um... look, times are hard and we (sigh) just can't seem to figure out the debt problems."
(Wife should definitely research bankruptcy on her own. And whether or not she does that, should get a separate bank account from husband's, and the two of them should try tackling their debt problems separately, since "together" seems to lead to "oh it's all too much; just make the payment with whatever card still has space.")
I'd have a lot more sympathy for Mr. and Mrs. Anon Debt, if they showed the slightest bit of awareness of how hard it is if you *don't* have a house and parents willing to bail you out when those financial problems start stacking up.
posted by ErisLordFreedom at 3:57 PM on November 21, 2018 [9 favorites]
I mean, it seems to me there are a lot of valid points in this thread. Like an airline crash, I suspect the problem here is a cascade failure. There is no one thing that has fucked up these people's lives. There are several failures here, many of them not personally owned by the subjects of this article. Once could argue that yes, society failed them (keeping up with the joneses, wage stagnation compared to cost of living) the state failed them (by not protecting them from predatory lenders and the mortgage crisis), the education system failed them, their parents failed them, and on top of all that (or likely because of all that) they failed themselves. There's plenty of blame to go around here.
I absolutely have sympathy for them, or anyone suffering from debt, because I suspect their own personal failures are only part of a larger bunch of failures that helped them get to this place.
posted by some loser at 4:02 PM on November 21, 2018 [17 favorites]
I absolutely have sympathy for them, or anyone suffering from debt, because I suspect their own personal failures are only part of a larger bunch of failures that helped them get to this place.
posted by some loser at 4:02 PM on November 21, 2018 [17 favorites]
I suspect their own personal failures are only part of a larger bunch of failures that helped them get to this place.
Well said. There has been lots of discussion in this thread of predatory financial practices. What do predators do? They seek out the weak members of the herd, then strike. Without a predator stalking them, a grazing herd might have stronger and weaker members, but the whole herd will live to see another day. The trait of being susceptible to predatory lending behavior, and the issue of predatory lending, are two separate things.
posted by rogerrogerwhatsyourrvectorvicto at 4:10 PM on November 21, 2018 [4 favorites]
Well said. There has been lots of discussion in this thread of predatory financial practices. What do predators do? They seek out the weak members of the herd, then strike. Without a predator stalking them, a grazing herd might have stronger and weaker members, but the whole herd will live to see another day. The trait of being susceptible to predatory lending behavior, and the issue of predatory lending, are two separate things.
posted by rogerrogerwhatsyourrvectorvicto at 4:10 PM on November 21, 2018 [4 favorites]
The decision to drastically curtail one of the parents' careers -- just coincidentally the mother (after incurring massive debt to attain that career).
I'm also super critical of how often it's the mother who makes career sacrifices, but when society pushes - sometimes out right shoves - mothers in that direction, I'm not going to go after a mother for her own choice. A lot of women end up leaving or scaling back on work in order to have a family, whether they originally thought they would or not.
Regardless of your stance on that, it's still not the problem with this couple. The problem isn't any one decision or piece of debt. They're still making a shit ton of money! The problem is that they have a pathological inability to stop spending money they don't have. Without that problem they could be living comfortably and paying down their debt instead of suffocating in it.
As I said, they would probably be in a very similar situation without the kids. And I'll add without law school or without taking that less lucrative job. Because even without those things, the spending problem would still be there. They don't need to be chided about having children, they need counseling.
posted by Kutsuwamushi at 4:13 PM on November 21, 2018 [10 favorites]
I'm also super critical of how often it's the mother who makes career sacrifices, but when society pushes - sometimes out right shoves - mothers in that direction, I'm not going to go after a mother for her own choice. A lot of women end up leaving or scaling back on work in order to have a family, whether they originally thought they would or not.
Regardless of your stance on that, it's still not the problem with this couple. The problem isn't any one decision or piece of debt. They're still making a shit ton of money! The problem is that they have a pathological inability to stop spending money they don't have. Without that problem they could be living comfortably and paying down their debt instead of suffocating in it.
As I said, they would probably be in a very similar situation without the kids. And I'll add without law school or without taking that less lucrative job. Because even without those things, the spending problem would still be there. They don't need to be chided about having children, they need counseling.
posted by Kutsuwamushi at 4:13 PM on November 21, 2018 [10 favorites]
artificial scarcity breeds strange flowers. What would the value of a fancy car be if it was reasonably in reach for everyone? What would desperate to appear Rich look like in a world where hoarding wealth is irrelevant? Nasty little system we got here. Designed to prey upon and exploit the neurosis we should be working to eradicate.
I view it a bit like prison abolition: we’re not saying close every prison overnight, but as a long term project to make prisons uneccesary. Make personal debt a thing of the past.
posted by The Whelk at 4:17 PM on November 21, 2018 [7 favorites]
I view it a bit like prison abolition: we’re not saying close every prison overnight, but as a long term project to make prisons uneccesary. Make personal debt a thing of the past.
posted by The Whelk at 4:17 PM on November 21, 2018 [7 favorites]
is there any analogy that can be made to harm-reduction for people whose spending is out of control and hurting themselves/others -- what would that look like?
Personally I always have to have at least one self-destructive behavior at all times. I've shoplifted, spent way too much money on credit cards, starved myself, gotten really dehydrated by only ever drinking coffee and beer, driven ridiculously fast, done stupid road-ragey maneuvers, slept all day and stayed up all night, stayed in bed for 24 hours at a time, stayed in bed for 24 hours at a time with two bottles of wine, taken hours-long lonely drives every weekend afternoon with all my cds, etc..
I think self-destructive behavior like this is related to depression or lack of self-worth in general.
They don't mention where exactly in the Northeast they live
From TFA: Kate: It all dates back 20 years. Tom and I were living together in Boston, where I was in college and he was in grad school...
I'm going to suggest east-central Massachusetts.
posted by bendy at 4:20 PM on November 21, 2018 [4 favorites]
Personally I always have to have at least one self-destructive behavior at all times. I've shoplifted, spent way too much money on credit cards, starved myself, gotten really dehydrated by only ever drinking coffee and beer, driven ridiculously fast, done stupid road-ragey maneuvers, slept all day and stayed up all night, stayed in bed for 24 hours at a time, stayed in bed for 24 hours at a time with two bottles of wine, taken hours-long lonely drives every weekend afternoon with all my cds, etc..
I think self-destructive behavior like this is related to depression or lack of self-worth in general.
They don't mention where exactly in the Northeast they live
From TFA: Kate: It all dates back 20 years. Tom and I were living together in Boston, where I was in college and he was in grad school...
I'm going to suggest east-central Massachusetts.
posted by bendy at 4:20 PM on November 21, 2018 [4 favorites]
The phrase that keeps going through my mind these days is "set people up for success." It makes me wonder what that would look like, setting these people up for success. In my fantasy world, there would be social workers who would visit this family every week and work on all the components of the situation as a whole: work on identifying ALL the accounts so everyone knows the whole picture, work on helping the parents understand the difference between lent money and owned money, work on helping with communication between Mom and Dad and the family as a whole, work on identifying steps they could take to start changing the situation. AND, the National Association of Fantasy Social Workers would have a strong lobbying arm that would meet with legislators to set new policy - like starting with community branches of a national bank that would offer credit cards at 5% interest, which would provide competition to the usurious corporate banks, and charging huge FDIC fees to predatory credit card companies.
We can identify all kinds of factors that help create situations like this, from individual choices to social pressures to national financial policies - personal, structural, and a lot of stuff that's not exactly either one.
How do we build a society - from the community to the nation - that sets the couple and their kids up for success?
posted by kristi at 4:23 PM on November 21, 2018 [12 favorites]
We can identify all kinds of factors that help create situations like this, from individual choices to social pressures to national financial policies - personal, structural, and a lot of stuff that's not exactly either one.
How do we build a society - from the community to the nation - that sets the couple and their kids up for success?
posted by kristi at 4:23 PM on November 21, 2018 [12 favorites]
“Cascade failure” is a good way to describe it.
Someone above brought up a good point that most of us would be in a similar financial pinch if we found ourselves saddled with an unexpected job loss, critical illness or other expensive impact on our earning power. That is true, but I don’t think it helps to not acknowledge the very real fact that this couple in particular are in their position because of drastic overspending that they will not curtail. Even the drastic overspending could be sympathized with, since I’d bet most of us have been dumb with money at some point in our lives, but it’s the refusal to do the work to address it, even knowing the very real damage they’re doing to themselves and their kids, that negates my leaning toward sympathy. I can’t be very sympathetic for someone who prefers to be a burden to others because it’s easier than doing some hard emotional work.
posted by Autumnheart at 4:25 PM on November 21, 2018 [8 favorites]
Someone above brought up a good point that most of us would be in a similar financial pinch if we found ourselves saddled with an unexpected job loss, critical illness or other expensive impact on our earning power. That is true, but I don’t think it helps to not acknowledge the very real fact that this couple in particular are in their position because of drastic overspending that they will not curtail. Even the drastic overspending could be sympathized with, since I’d bet most of us have been dumb with money at some point in our lives, but it’s the refusal to do the work to address it, even knowing the very real damage they’re doing to themselves and their kids, that negates my leaning toward sympathy. I can’t be very sympathetic for someone who prefers to be a burden to others because it’s easier than doing some hard emotional work.
posted by Autumnheart at 4:25 PM on November 21, 2018 [8 favorites]
As much as I'm tempted to suck my teeth at this couple, the thing that jumps out of me is about this is how much of a vampire capitalism is.
I mean... they could have made better choices. But because of bad choices, capitalism put its fangs into them and it's never letting go. All of their money is going to their debt; they're never going to pay down the principal and they're going to wind up paying back, what - three, four, five times what they originally borrowed? They're indentured servants, and capitalism had gotten itself to where this insane level of precarity and instability is now available to people who make $160,000/year.
posted by entropone at 4:30 PM on November 21, 2018 [27 favorites]
I mean... they could have made better choices. But because of bad choices, capitalism put its fangs into them and it's never letting go. All of their money is going to their debt; they're never going to pay down the principal and they're going to wind up paying back, what - three, four, five times what they originally borrowed? They're indentured servants, and capitalism had gotten itself to where this insane level of precarity and instability is now available to people who make $160,000/year.
posted by entropone at 4:30 PM on November 21, 2018 [27 favorites]
National Association of Fantasy Social Workers
A Social Capital WPA, say?
posted by The Whelk at 4:40 PM on November 21, 2018 [2 favorites]
A Social Capital WPA, say?
posted by The Whelk at 4:40 PM on November 21, 2018 [2 favorites]
In terms of actual spendable dollars, I live on about 30K a year. After taxes, I have approximately 20K a year to spend on my lifestyle. I am a household of one, so I live reasonably well, with fairly modest tastes. I'm in a rural part of the country and fronting a lifestyle is not really my thing.
My house is paid for.
My car (2008 Honda Fit, 200K on odometer) is paid for.
My personal truck (2002 F250 diesel w/ 4wd, 150K on odometer,) is paid for.
My work truck (2006 Ford Ranger, 130K on odometer) runs well and does what I need it to do for my job. (Work pays for it and feeds it. I drive it to and from work every day so my own vehicles are not driven on a day-to-day basis.)
I have no debt of any kind, not college debt, not cc debt, not medical debt. I have about $200K in assorted IRAs for my retirement as well as assorted family s-corp shares that are worth roughly $250K. The s-corp shares are not particularly liquid but they do have actual real world value and no debt. I am 48. I'd like to have more money set aside for retirement, but I don't make a whole lot and it's difficult to find additional money in the budget. I'm doing the best I can there.
I also have a savings account for emergencies of the smallish sort that generally runs around ~2K in balance for unexpected but needful things like New Washing Machine or Put A Transmission In The Diesel Pickup or Baby Horse Vet Bills. Right now it's below 1K because I just spent about $1300 in baby horse vet bills. (Baby horse looks like she'll pull through, though. So yay.) I'm working on getting it back up to full strength, which will take me two months or so.
I feel like I'm rich. Certainly compared to the people in the article, I am rich. But I can't live a very fancy lifestyle on $30K a year. I am not awash in money and I have to budget. If I make stupid choices, I can tank my currently-sustainable lifestyle in under a month. The people in the article would look at me and my old-but-functional vehicles and my modestly-sized house and my worn clothing and assume I was poor. They would be wrong.
posted by which_chick at 4:43 PM on November 21, 2018 [19 favorites]
My house is paid for.
My car (2008 Honda Fit, 200K on odometer) is paid for.
My personal truck (2002 F250 diesel w/ 4wd, 150K on odometer,) is paid for.
My work truck (2006 Ford Ranger, 130K on odometer) runs well and does what I need it to do for my job. (Work pays for it and feeds it. I drive it to and from work every day so my own vehicles are not driven on a day-to-day basis.)
I have no debt of any kind, not college debt, not cc debt, not medical debt. I have about $200K in assorted IRAs for my retirement as well as assorted family s-corp shares that are worth roughly $250K. The s-corp shares are not particularly liquid but they do have actual real world value and no debt. I am 48. I'd like to have more money set aside for retirement, but I don't make a whole lot and it's difficult to find additional money in the budget. I'm doing the best I can there.
I also have a savings account for emergencies of the smallish sort that generally runs around ~2K in balance for unexpected but needful things like New Washing Machine or Put A Transmission In The Diesel Pickup or Baby Horse Vet Bills. Right now it's below 1K because I just spent about $1300 in baby horse vet bills. (Baby horse looks like she'll pull through, though. So yay.) I'm working on getting it back up to full strength, which will take me two months or so.
I feel like I'm rich. Certainly compared to the people in the article, I am rich. But I can't live a very fancy lifestyle on $30K a year. I am not awash in money and I have to budget. If I make stupid choices, I can tank my currently-sustainable lifestyle in under a month. The people in the article would look at me and my old-but-functional vehicles and my modestly-sized house and my worn clothing and assume I was poor. They would be wrong.
posted by which_chick at 4:43 PM on November 21, 2018 [19 favorites]
If I wanted to be judgmental, this is the part that screams "Bad Idea Jeans" to me, so I find it weird that most of the commentariat (here and elsewhere) seem to be focusing on the Whole Foods sushi.
I think probably because she does have a professional job paying $70k. That actually isn't that bad for a non big-law lawyer in the suburbs anyway. Obviously if she was 3rd in her class at Harvard Law then she's leavings hundreds of thousands on the table but legal income is pretty starkly bimodal. She might only be earning a few tens of thousands more as a lawyer.
Some of these numbers don't really add up. How are they surrounded by people with way more money than them (and $160k is already loads) but the public school is that bad? Their house looks incongruously cheap for that kind of area - how does that work?
posted by atrazine at 4:43 PM on November 21, 2018 [8 favorites]
I think probably because she does have a professional job paying $70k. That actually isn't that bad for a non big-law lawyer in the suburbs anyway. Obviously if she was 3rd in her class at Harvard Law then she's leavings hundreds of thousands on the table but legal income is pretty starkly bimodal. She might only be earning a few tens of thousands more as a lawyer.
Some of these numbers don't really add up. How are they surrounded by people with way more money than them (and $160k is already loads) but the public school is that bad? Their house looks incongruously cheap for that kind of area - how does that work?
posted by atrazine at 4:43 PM on November 21, 2018 [8 favorites]
I suspect given the insurance jobs, low housing prices, and keeping up with Jones's stuff they live in the Hartford suburbs.
posted by JPD at 5:28 PM on November 21, 2018 [6 favorites]
posted by JPD at 5:28 PM on November 21, 2018 [6 favorites]
o mortgage either? Well the credit industry might not even see you as a person.
I dunno, I have a near perfect credit score, have never had a mortgage and paid off the student loans a few years ago. I've only ever had two car loans, and none now.
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 5:43 PM on November 21, 2018
I dunno, I have a near perfect credit score, have never had a mortgage and paid off the student loans a few years ago. I've only ever had two car loans, and none now.
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 5:43 PM on November 21, 2018
Autumn Heart you bring up the vexed question about the morality of debt, in some sense I think this question goes to the heart of what money is. I describe money as liquidated obligation, a phrase I think I read in a book by James Buchan called Frozen Desire. I certainly would not argue that one should feel obligated to pay back a loan for moral scruple were it to come from a loan shark and in some sense that is what was happening with many of the loans created in the lead up to the bubble. I think what is at issue for me is that the people I speak of, who I find morally dubious, had capacity to afford comfortably the payment of their mortgage, decided to, as you say, strategically default without a qualm as to what this would do to their neighbors. The betrayal is not to the financial institution that lent them the money but rather to their own community. There decision was to cause harm to others because it would benefit them, and this was not a benefit that I would describe as avoiding poverty but rather the obverse. The more excessive example would be that of a house flipper who rode the ride of easy money right up to the crash and then walked away from a portfolio of 15 houses with only the minor inconvenience of having to wait a few years for the default to age off their credit report, hardly a high price to pay for making a few million dollars.
I feel like the larger problem is that in some sense we have given up on the idea of society, we take our cues from the same corporations that we profess to despise. Even the phrase "strategic bankruptcy" comes from the world of leveraged buy outs and private equity. It is america after all, I guess, but still I don't feel sanguine about waving hands in the broadest sense about "banks" and declaring that it absolves us of any duty to pay our debts. The Right specialized in totally nuance-less description of the financial crisis, blaming it all on callow borrowers and fair lending regulations I do not think it is a simple thing and I am pretty sure that we would agree on most of this but I do want to try to make myself a little clearer as I do not think that any of this works without the entanglements of trust and therefore moral values despite the venal exploitation of those same values by the non scrupulous. Mind you, I am definitely NOT blaming the financial crisis on the borrower, nor do I think that a debt must be paid regardless of the consequences that paying it entails, I do not believe in austerity as a moral principal.
posted by Pembquist at 5:51 PM on November 21, 2018 [2 favorites]
I feel like the larger problem is that in some sense we have given up on the idea of society, we take our cues from the same corporations that we profess to despise. Even the phrase "strategic bankruptcy" comes from the world of leveraged buy outs and private equity. It is america after all, I guess, but still I don't feel sanguine about waving hands in the broadest sense about "banks" and declaring that it absolves us of any duty to pay our debts. The Right specialized in totally nuance-less description of the financial crisis, blaming it all on callow borrowers and fair lending regulations I do not think it is a simple thing and I am pretty sure that we would agree on most of this but I do want to try to make myself a little clearer as I do not think that any of this works without the entanglements of trust and therefore moral values despite the venal exploitation of those same values by the non scrupulous. Mind you, I am definitely NOT blaming the financial crisis on the borrower, nor do I think that a debt must be paid regardless of the consequences that paying it entails, I do not believe in austerity as a moral principal.
posted by Pembquist at 5:51 PM on November 21, 2018 [2 favorites]
A family’s ability to soak up income is phantasmagorical. My wife and I wage a constant war against spending creep. But the damn wiener kids always outgrow their clothes and want fresh food. Fucking daily.
They go to public schools, and their schools partner with a web-based provider to constantly pester me for nickel and dimes and twenties to subsidize some new scholastic initiative.
However, I think as a family we keep our heads above water with the following behaviours:
1) Cars are necessary, because we live rurally. I only buy cars I can afford to purchase outright, which limits us to low-end commuter models with no style, no pizzazz, and no features. My dashboard is basically nothing but little blank panels where the features would go if I had any. The parts are cheap and widely available, and the cars can be serviced by non-specialist mechanics. Our cars will never impress anybody. And that’s just fine.
2) Value Village is where clothes come from. All clothes. Being funky is way more affordable than being chic.
3) I won’t pay anybody to bring television signals into my house. I am gobsmacked at the amount monthly money some folks I know pour into television entertainment, like cable or multiple streaming services. Not required.
4) No red meat. That shit is expensive in more ways than one. If you really love a nice steak, treat yourself now and again when you’ve elected to go out for dinner. There’s no need to stock it in your fridge unless you’re hell bent on paying for your cardiologist’s kid’s braces.
5) Necessary home repairs, not cosmetic ones. I keep the property from falling apart or losing value, but I’m not sinking money into prettying anything up or changing it about when there are more pressing needs. Who cares what snotty neighbours might think? Fuck them right in the ear.
Ways in which I am able to employ certain privilege-based cheats...
1) Potable water is free for me. It comes out of a hole in my backyard. We have so much portable water I wash my socks in it.
2) My company pays for things like telephones. I have arranged a nice deal with the company, and so am provisioned with telephones and telephone service for my family of five. Every two years they hand us new telephones, a year or two behind the cutting edge.
3) I live in a semi-socialist boreal confederation where healthcare is fully covered. Prescription drugs are subsidized for adults, free for seniors and children under 25. I carry no additional health insurance, except when I travel to barbarian lands.
4) I am paid a living wage. My wife is paid nearly a living wage. We both enjoy reasonable job security.
Here are the things I spend more on than I should:
1) Beer.
2) Wine.
3) Booze.
4) Cannabis.
5) Those fancy little cheeses in individual serving wrappers, because they fit in my purse and are delicious.
We take one family vacation each year, in which we camp along the way in provincial parks. We keep multiple pets fed, watered and in good health. I tend to go a little crazy at Christmas because I want to make sure nobody is sad, but my wife reins me in most of the time. One Friday each month all go to the cinema and eat candy and watch commercials for theme parks.
We have saved enough money to fund 25% of projected university costs. Our retirement plan will optimistically cover 25% of our needs. I’m not sure about “step 2” in either of those situations.
The best thing I could do financially for my family would be to die (mortgage paid off instantly, plus nice life insurance pay out for my wife).
Anyhoo, shitty car and no TV makes Construction Concern ... able to tread water.
posted by Construction Concern at 5:58 PM on November 21, 2018 [6 favorites]
They go to public schools, and their schools partner with a web-based provider to constantly pester me for nickel and dimes and twenties to subsidize some new scholastic initiative.
However, I think as a family we keep our heads above water with the following behaviours:
1) Cars are necessary, because we live rurally. I only buy cars I can afford to purchase outright, which limits us to low-end commuter models with no style, no pizzazz, and no features. My dashboard is basically nothing but little blank panels where the features would go if I had any. The parts are cheap and widely available, and the cars can be serviced by non-specialist mechanics. Our cars will never impress anybody. And that’s just fine.
2) Value Village is where clothes come from. All clothes. Being funky is way more affordable than being chic.
3) I won’t pay anybody to bring television signals into my house. I am gobsmacked at the amount monthly money some folks I know pour into television entertainment, like cable or multiple streaming services. Not required.
4) No red meat. That shit is expensive in more ways than one. If you really love a nice steak, treat yourself now and again when you’ve elected to go out for dinner. There’s no need to stock it in your fridge unless you’re hell bent on paying for your cardiologist’s kid’s braces.
5) Necessary home repairs, not cosmetic ones. I keep the property from falling apart or losing value, but I’m not sinking money into prettying anything up or changing it about when there are more pressing needs. Who cares what snotty neighbours might think? Fuck them right in the ear.
Ways in which I am able to employ certain privilege-based cheats...
1) Potable water is free for me. It comes out of a hole in my backyard. We have so much portable water I wash my socks in it.
2) My company pays for things like telephones. I have arranged a nice deal with the company, and so am provisioned with telephones and telephone service for my family of five. Every two years they hand us new telephones, a year or two behind the cutting edge.
3) I live in a semi-socialist boreal confederation where healthcare is fully covered. Prescription drugs are subsidized for adults, free for seniors and children under 25. I carry no additional health insurance, except when I travel to barbarian lands.
4) I am paid a living wage. My wife is paid nearly a living wage. We both enjoy reasonable job security.
Here are the things I spend more on than I should:
1) Beer.
2) Wine.
3) Booze.
4) Cannabis.
5) Those fancy little cheeses in individual serving wrappers, because they fit in my purse and are delicious.
We take one family vacation each year, in which we camp along the way in provincial parks. We keep multiple pets fed, watered and in good health. I tend to go a little crazy at Christmas because I want to make sure nobody is sad, but my wife reins me in most of the time. One Friday each month all go to the cinema and eat candy and watch commercials for theme parks.
We have saved enough money to fund 25% of projected university costs. Our retirement plan will optimistically cover 25% of our needs. I’m not sure about “step 2” in either of those situations.
The best thing I could do financially for my family would be to die (mortgage paid off instantly, plus nice life insurance pay out for my wife).
Anyhoo, shitty car and no TV makes Construction Concern ... able to tread water.
posted by Construction Concern at 5:58 PM on November 21, 2018 [6 favorites]
I think it is strange to talk about this family as a failure when they are exactly what the credit industry wants, encourages, and profits from. Their debt is not a moral failing, it is a valuable asset that is earning large profits for American companies. People here are asking how these people get loans when those with a better history of money management cannot: It's not because banks are stupid. It's because these people are good business, and people who do not carry large balances are not.
posted by Nothing at 6:11 PM on November 21, 2018 [13 favorites]
posted by Nothing at 6:11 PM on November 21, 2018 [13 favorites]
This article is bullshit. I mean, it's a little too convenient to claim you're protecting the anonymity of the family you've clearly made up for a just-so story designed to drive hate clicks to your website.
posted by axiom at 6:12 PM on November 21, 2018 [10 favorites]
posted by axiom at 6:12 PM on November 21, 2018 [10 favorites]
METAFILTER: Here are the things I spend more on than I should:
1) Beer.
2) Wine.
3) Booze.
4) Cannabis.
posted by philip-random at 6:17 PM on November 21, 2018 [10 favorites]
1) Beer.
2) Wine.
3) Booze.
4) Cannabis.
posted by philip-random at 6:17 PM on November 21, 2018 [10 favorites]
I too have doubts if this is a real family, or whatever the human interest equivalent of a docudrama might be.
If it's real, then my biggest judgey thing is with them taking a financial-hardship tuition deduction when that could presumably have gone to a family who had real exogenous financial hardship and not a kind of manufactured helplessness about money. That seems to be where their sloppy lifestyle actually starts doing harm to others by reducing opportunities.
posted by Rumple at 6:45 PM on November 21, 2018 [9 favorites]
If it's real, then my biggest judgey thing is with them taking a financial-hardship tuition deduction when that could presumably have gone to a family who had real exogenous financial hardship and not a kind of manufactured helplessness about money. That seems to be where their sloppy lifestyle actually starts doing harm to others by reducing opportunities.
posted by Rumple at 6:45 PM on November 21, 2018 [9 favorites]
I don't have any debt and it feels absolutely amazing. I paid off around $30,000 in student loans, and worked full-time while going to grad school so I wouldn't take on more debt.
I definitely think this couple has made some bad choices, but I also find this extremely relatable because being ashamed of yourself has a way of forcing you to dig yourself in deeper. The more you put off thinking about the knife sticking out of your gut, the more you'll risk pushing it in a little deeper so you'll tell yourself you're fine. This couple is deeply ashamed, and that shame is paralyzing them from taking real action.
Also, even though I personally grew up poor and went to public school and sometimes can be dismissive of privileged rich people with kids in private school, I still can't entirely fault them for having their kids in a private school. Sometimes, you want what's best for your kids, and you're blinded by everything else. If I were in that position, I could see wanting to sacrifice everything else, but still trying to do what's best for their kids.
The one thing I don't understand is, now that their kids are older, why not try to find better-paying jobs?
Also, I disagree that this is made-up. The shame, fear, and small secrets from each other feels all too real for me. If it's fake, then it was written by a masterful fiction writer.
posted by Eyeveex at 6:54 PM on November 21, 2018 [9 favorites]
I definitely think this couple has made some bad choices, but I also find this extremely relatable because being ashamed of yourself has a way of forcing you to dig yourself in deeper. The more you put off thinking about the knife sticking out of your gut, the more you'll risk pushing it in a little deeper so you'll tell yourself you're fine. This couple is deeply ashamed, and that shame is paralyzing them from taking real action.
Also, even though I personally grew up poor and went to public school and sometimes can be dismissive of privileged rich people with kids in private school, I still can't entirely fault them for having their kids in a private school. Sometimes, you want what's best for your kids, and you're blinded by everything else. If I were in that position, I could see wanting to sacrifice everything else, but still trying to do what's best for their kids.
The one thing I don't understand is, now that their kids are older, why not try to find better-paying jobs?
Also, I disagree that this is made-up. The shame, fear, and small secrets from each other feels all too real for me. If it's fake, then it was written by a masterful fiction writer.
posted by Eyeveex at 6:54 PM on November 21, 2018 [9 favorites]
"We were in a good place. But then we did it all over again. We’re in exactly the same place now."
My partner and I are about three months away from paying off a total of nearly 60k in debt through a debt counseling/payment program, which has been really good for us. The bulk of the debt originated in legal fees for a custody fight with one of our children's birthfather, but our own bad habits, and my naive belief that we could get on top of it and pay it off on our own, led us to wait much longer than we should have to get into a debt repayment program.
Recently I learned there was a Facebook group for people in the program, and I joined it.
The most interesting/alarming thing is that there are people in that group asking about getting loans while they're in the repayment program. Other people are like, "yeah, we know it's tough--I had to take a second job the first year we were in repayment," but some people are sure the only solution to their problem is to borrow money.
Another person mentioned this was their third time in a debt repayment program.
For my partner and me, it's been interesting to see our psychological weaknesses and blind spots as we cope with a tight budget. We have not solved all our problems by any means. But one thing we're really clear about: we can never again have open-ended debt. A loan like a car payment that is s fixed amount per month for a set amount of time? Fine. We pay those off reliably and on time. Credit cards? Home equity lines of credit? Nope. It turns out that we are really good at budgeting and living within our means, so long as we have no choice. So it's important going forward that we not have a choice.
We are also relatively lucky that we have made some good choices that have benefited us in the long term. 16 years ago, we bought our current house for about half the amount of the mortgage we'd been pre-approved for, and with a decent down payment. Thanks to the vagaries of the housing market, it's now worth about what we paid for it. Not overextending on housing has served us well, and even as our family grew and made living in such a small space challenging, we've been very glad we weren't tempted to get something bigger.
posted by Orlop at 7:11 PM on November 21, 2018 [5 favorites]
My partner and I are about three months away from paying off a total of nearly 60k in debt through a debt counseling/payment program, which has been really good for us. The bulk of the debt originated in legal fees for a custody fight with one of our children's birthfather, but our own bad habits, and my naive belief that we could get on top of it and pay it off on our own, led us to wait much longer than we should have to get into a debt repayment program.
Recently I learned there was a Facebook group for people in the program, and I joined it.
The most interesting/alarming thing is that there are people in that group asking about getting loans while they're in the repayment program. Other people are like, "yeah, we know it's tough--I had to take a second job the first year we were in repayment," but some people are sure the only solution to their problem is to borrow money.
Another person mentioned this was their third time in a debt repayment program.
For my partner and me, it's been interesting to see our psychological weaknesses and blind spots as we cope with a tight budget. We have not solved all our problems by any means. But one thing we're really clear about: we can never again have open-ended debt. A loan like a car payment that is s fixed amount per month for a set amount of time? Fine. We pay those off reliably and on time. Credit cards? Home equity lines of credit? Nope. It turns out that we are really good at budgeting and living within our means, so long as we have no choice. So it's important going forward that we not have a choice.
We are also relatively lucky that we have made some good choices that have benefited us in the long term. 16 years ago, we bought our current house for about half the amount of the mortgage we'd been pre-approved for, and with a decent down payment. Thanks to the vagaries of the housing market, it's now worth about what we paid for it. Not overextending on housing has served us well, and even as our family grew and made living in such a small space challenging, we've been very glad we weren't tempted to get something bigger.
posted by Orlop at 7:11 PM on November 21, 2018 [5 favorites]
"We’re better off dead" because of the life insurance?
Having children, a bad financial decision?
Why restrict immigration than?
posted by TRAJAN at 7:41 PM on November 21, 2018
Having children, a bad financial decision?
Why restrict immigration than?
posted by TRAJAN at 7:41 PM on November 21, 2018
The only solution for the people in TFA is bankruptcy,
Hahahaha get back to me when that forgives student loans.
posted by tzikeh at 7:55 PM on November 21, 2018 [4 favorites]
Hahahaha get back to me when that forgives student loans.
posted by tzikeh at 7:55 PM on November 21, 2018 [4 favorites]
Student loans are the least of their problems.
Bankruptcy would totally help them.
posted by Windopaene at 8:01 PM on November 21, 2018 [3 favorites]
Bankruptcy would totally help them.
posted by Windopaene at 8:01 PM on November 21, 2018 [3 favorites]
Bankruptcy would help the short term problem of these particular debts, the issue with this couple is that they haven't actually learnt how to manage money so they'd just go straight back to overspending and racking up more debt. (See; borrowing money from Grandma.)
posted by Jubey at 8:07 PM on November 21, 2018 [6 favorites]
posted by Jubey at 8:07 PM on November 21, 2018 [6 favorites]
Everything about that story is infuriating.
posted by turbid dahlia at 8:20 PM on November 21, 2018 [1 favorite]
posted by turbid dahlia at 8:20 PM on November 21, 2018 [1 favorite]
When Rep. Duncan Hunter and his wife were indicted for misusing campaign funds, I read the indictment, and they live exactly like the people in this article. They were using stolen money instead of credit (well actually both), but the story was almost exactly the same. So I have no doubt this story is true.
posted by ThePinkSuperhero at 8:22 PM on November 21, 2018 [10 favorites]
posted by ThePinkSuperhero at 8:22 PM on November 21, 2018 [10 favorites]
I was taught growing up that I shouldn't take on debt that I didn't have a solid plan for repaying.
Violated that taking onstupid student debt during the last third of my second time around at grad school. I had some vague notion about "getting a job" but ultimately it was a serious emotional/ psychological burden until a windfall happened.
I simply cannot understand how these people - if indeed they're real, but there must be many like mochapickle's friend who's debt got so big that it became "a nebulous thing" - can just keep on borrowing to the hilt instead of trying to start remediating their debt situation.
posted by porpoise at 8:33 PM on November 21, 2018 [1 favorite]
Violated that taking on
I simply cannot understand how these people - if indeed they're real, but there must be many like mochapickle's friend who's debt got so big that it became "a nebulous thing" - can just keep on borrowing to the hilt instead of trying to start remediating their debt situation.
posted by porpoise at 8:33 PM on November 21, 2018 [1 favorite]
I read the "interview" but I'll tell you, as an accountant who's been following popular finance writing for the past 15 years: FAKE. So fake. Written to attract page-views for their paid services. Not that there aren't people who spend wildly beyond their means to this extreme, because they are definitely out there, but this doesn't pass the sniff test for me.
I also notice that on Wealthsimple's site the company is not forthcoming on the underlying funds/assets offered. Sketchy.
posted by stowaway at 8:45 PM on November 21, 2018 [21 favorites]
I also notice that on Wealthsimple's site the company is not forthcoming on the underlying funds/assets offered. Sketchy.
posted by stowaway at 8:45 PM on November 21, 2018 [21 favorites]
I know two families like this. One couple are divorced and the other are getting divorced. In both cases it is one spouse who spends all the money and the other one has. had. it. But let me tell you a person spending money on bullshit can go through it like you wouldn't believe. One of these couples, the husband is in a big finance firm, probably brings home $300 or 400K per year. The wife spends it all. She'll buy clothes and drop them off at the dry cleaner and never pick them up, she'll order cooked meals from a chef, that kind of thing. He's left her in what amounts to self defense at this point, just to rein in the spending. I will say that in both the couples I know, it's both a generational thing and a peer thing. There is a family member, usually the mother, encouraging the spending because they are also a spender and a hoarder and there are friends encouraging it too. And there are usually stupid "investments" or renovations or big donations they can't afford too. No drug addiction or gambling but some kind of addiction to watching money go out the door.
As someone with big medical bills it's super frustrating to watch.
posted by fshgrl at 9:01 PM on November 21, 2018 [4 favorites]
As someone with big medical bills it's super frustrating to watch.
posted by fshgrl at 9:01 PM on November 21, 2018 [4 favorites]
Anybody else notice this but about the car? "It had some minor damage on it — just a broken mirror — and I’m not sure what they would have charged for that."
The passive voice is telling. The (leased new) car had been damaged, but there is no responsibility assigned.
posted by agentofselection at 9:08 PM on November 21, 2018 [6 favorites]
The passive voice is telling. The (leased new) car had been damaged, but there is no responsibility assigned.
posted by agentofselection at 9:08 PM on November 21, 2018 [6 favorites]
The part I really want an answer to is how they are able to keep getting credit given their debt-to-income ratios. It doesn't make sense. Who would lend money to somebody who has 8 maxed out credit cards and student loans in forbearance? Lenders extending credit to these folks doesn't seem predatory, it just seems stupid. It's not in any company's best interest to loan money to somebody who can't pay them back.
I do feel bad for Kate in this story, stuck in a life and situation she never wanted. I hope she makes it out OK.
Also, for everyone criticizing Wealthsimple for featuring this story -- it's part of a series in which there are dozens of articles by and about an incredibly diverse array of people. You could have read the one about the finances of a commune. You could have read the one by the WNBA player fighting to be paid the same as men, or the one by the refugee on a Section 8 voucher. But the hate-read is the one that gets the clicks...
posted by phoenixy at 9:17 PM on November 21, 2018 [4 favorites]
I do feel bad for Kate in this story, stuck in a life and situation she never wanted. I hope she makes it out OK.
Also, for everyone criticizing Wealthsimple for featuring this story -- it's part of a series in which there are dozens of articles by and about an incredibly diverse array of people. You could have read the one about the finances of a commune. You could have read the one by the WNBA player fighting to be paid the same as men, or the one by the refugee on a Section 8 voucher. But the hate-read is the one that gets the clicks...
posted by phoenixy at 9:17 PM on November 21, 2018 [4 favorites]
So what is wrong with our society that it is necessary to pull a child out of public school for their own physical safety?
With people as detached from reality as these two, I just assumed that either they are making it up, or the full story is that their kid had been terrorizing someone for years and finally got expelled after it got physical but they've physically excised that memory.
But $15k for THREE kids private school tuition seems so low that I wondered if it was per kid. That isn't the problem with their spending, it's just one more "no sacrifices ever ever ever" symptom.
posted by the agents of KAOS at 9:26 PM on November 21, 2018 [6 favorites]
With people as detached from reality as these two, I just assumed that either they are making it up, or the full story is that their kid had been terrorizing someone for years and finally got expelled after it got physical but they've physically excised that memory.
But $15k for THREE kids private school tuition seems so low that I wondered if it was per kid. That isn't the problem with their spending, it's just one more "no sacrifices ever ever ever" symptom.
posted by the agents of KAOS at 9:26 PM on November 21, 2018 [6 favorites]
>> You know you're supposed to care more, and you feel guilty all the time,
>> but money isn't tangible and it can be really, really hard to grasp as a concept.
>
> I dunno, it seems only as difficult as basic subtraction, which we
> learn in elementary school.
>
If you're a concrete thinker money is actually really weird. In no reasonable world would someone give you a cart of groceries in exchange for a small stack of paper and some metal. And they certainly wouldn't give you a TV just for the privilege of looking at your piece of plastic.
People obviously can and do learn to make the connections but the process is never going to be as intuitive as, say, trading two sheep for a cow or a motorcycle for a couch.
Account balances and loan interest and other numbers written on pieces of paper are similarly disconnected from any real sense of value. Making the connections and responding appropriately when the numbers don't add up can be learned, but for a lot of people it isn't necessarily intuitive.
posted by Tell Me No Lies at 9:44 PM on November 21, 2018 [9 favorites]
>> but money isn't tangible and it can be really, really hard to grasp as a concept.
>
> I dunno, it seems only as difficult as basic subtraction, which we
> learn in elementary school.
>
If you're a concrete thinker money is actually really weird. In no reasonable world would someone give you a cart of groceries in exchange for a small stack of paper and some metal. And they certainly wouldn't give you a TV just for the privilege of looking at your piece of plastic.
People obviously can and do learn to make the connections but the process is never going to be as intuitive as, say, trading two sheep for a cow or a motorcycle for a couch.
Account balances and loan interest and other numbers written on pieces of paper are similarly disconnected from any real sense of value. Making the connections and responding appropriately when the numbers don't add up can be learned, but for a lot of people it isn't necessarily intuitive.
posted by Tell Me No Lies at 9:44 PM on November 21, 2018 [9 favorites]
>> I have a law degree. I don’t practice law though. When I got pregnant
>> with our first, I took the highest-paying job I could find that still allowed
>> me to stay home
>
> If I wanted to be judgmental, this is the part that screams "Bad Idea Jeans"
> to me, so I find it weird that most of the commentariat (here and elsewhere)
> seem to be focusing on the Whole Foods sushi.
There is a reasonable argument for having an adult at home during the child-raising years, so it's inviting a rathole to start kvetching about it. On the other hand, no one is willing to speak up for the vital importance of $15 sushi night at Whole Foods.
posted by Tell Me No Lies at 9:55 PM on November 21, 2018
>> with our first, I took the highest-paying job I could find that still allowed
>> me to stay home
>
> If I wanted to be judgmental, this is the part that screams "Bad Idea Jeans"
> to me, so I find it weird that most of the commentariat (here and elsewhere)
> seem to be focusing on the Whole Foods sushi.
There is a reasonable argument for having an adult at home during the child-raising years, so it's inviting a rathole to start kvetching about it. On the other hand, no one is willing to speak up for the vital importance of $15 sushi night at Whole Foods.
posted by Tell Me No Lies at 9:55 PM on November 21, 2018
Something doesn't add up here. I would love to see their actual spending record, if it existed.
I kinda thought that, too - or I certainly don't think the sushi is their problem. If I'm to be honest with myself, I know a thing or two about spending way too much money on food, and "my son spends $15-20 once week, boy we really need to tell him to knock that off!" is either absurdly downplaying the issue or not what's making the real dent in $160k. The law school debt is a lot but they don't seem actually to be paying it off so that doesn't explain why they have to run up credit card debt. The thing that seems like an obviously iffy idea is the private school, and there's some evidence of medical bills, but it still feels like something is missing.
posted by atoxyl at 10:01 PM on November 21, 2018
I kinda thought that, too - or I certainly don't think the sushi is their problem. If I'm to be honest with myself, I know a thing or two about spending way too much money on food, and "my son spends $15-20 once week, boy we really need to tell him to knock that off!" is either absurdly downplaying the issue or not what's making the real dent in $160k. The law school debt is a lot but they don't seem actually to be paying it off so that doesn't explain why they have to run up credit card debt. The thing that seems like an obviously iffy idea is the private school, and there's some evidence of medical bills, but it still feels like something is missing.
posted by atoxyl at 10:01 PM on November 21, 2018
As someone who ended up with some credit card debt (halved in the last 4 months with a plan to have it totally gone in a another 4 months) because what seems like everything in her house broke at once, I can totally see how easy it would be for them to rack up massive debt if they're constantly upgrading/redesigning the house they needed to downsize about 8 credit cards ago. They didn't address it, but I'm guessing there's a lawn service, maybe constant upgrades of the tech/appliances, that doesn't even register to them as places to cut before we even get down to avoiding Whole Foods.
But maybe I'm an extra bitter reader because I haven't been to Whole Foods or the like in over a year because of said household repair expenses.
posted by TwoStride at 10:06 PM on November 21, 2018 [3 favorites]
But maybe I'm an extra bitter reader because I haven't been to Whole Foods or the like in over a year because of said household repair expenses.
posted by TwoStride at 10:06 PM on November 21, 2018 [3 favorites]
Maybe that sushi is supposed to be symbolic of their profligacy in other areas but I have a hard time identifying with that because the two things I've ever blown a regrettable amount of money on are food and (at one point) drugs and one of those was a bigger problem than the other!
posted by atoxyl at 10:07 PM on November 21, 2018 [1 favorite]
posted by atoxyl at 10:07 PM on November 21, 2018 [1 favorite]
I feel sorry for these people, but the same way I'd feel sympathy someone who has rage issues and keeps abusing coworkers and getting themselves fired from jobs. It's tough but it's absolutely self sabotage and not a "systemic issue" in any normal way. (One thing that struck me from their narrative that a few other people already mentioned: They obviously don't talk about money with each other or parents or sensible friends. That's the resource they are missing, not cash.)
Their income puts them near the top 10% of households. I know we're used to talking about stagnating median wages but they are will into the cohort that has seen real wage growth over the last decades. They don't have "predatory lenders" the way the term makes sense*; what they have is access to capital at normal rates that they choose to spend on non-emergency items**. I suspect if they were better at budgeting a quarter of the posters here would be figuring they're the type of people who should be paying more in taxes to battle inequality.
I'm not trying to bag on them but I do feel strongly people concerned about inequality really should *not* be looking at them and trying to solve their problems, because that will ignore the half the nation that makes barely one third their salary.
* That is, actual poor people with no collateral and no other sources of money getting charging 100% or more in interest rates, as opposed to people with plenty of options getting charged market rates and being given income tax deductions to boot.
** Even imagining a rule banks should be applying here is tough. "Don't lend to poor people because they'll waste the money" is a bit problematic; "Don't lend to upper middle class people because they'll waste the money" is pure satire.
posted by mark k at 11:06 PM on November 21, 2018 [13 favorites]
Their income puts them near the top 10% of households. I know we're used to talking about stagnating median wages but they are will into the cohort that has seen real wage growth over the last decades. They don't have "predatory lenders" the way the term makes sense*; what they have is access to capital at normal rates that they choose to spend on non-emergency items**. I suspect if they were better at budgeting a quarter of the posters here would be figuring they're the type of people who should be paying more in taxes to battle inequality.
I'm not trying to bag on them but I do feel strongly people concerned about inequality really should *not* be looking at them and trying to solve their problems, because that will ignore the half the nation that makes barely one third their salary.
* That is, actual poor people with no collateral and no other sources of money getting charging 100% or more in interest rates, as opposed to people with plenty of options getting charged market rates and being given income tax deductions to boot.
** Even imagining a rule banks should be applying here is tough. "Don't lend to poor people because they'll waste the money" is a bit problematic; "Don't lend to upper middle class people because they'll waste the money" is pure satire.
posted by mark k at 11:06 PM on November 21, 2018 [13 favorites]
Here are the things I spend more on than I should
I used to spend about $1000/month on substances of abuse. Cigarettes alone - $10/day. This is why I could have been a contender, basically.
posted by thelonius at 12:40 AM on November 22, 2018 [2 favorites]
I used to spend about $1000/month on substances of abuse. Cigarettes alone - $10/day. This is why I could have been a contender, basically.
posted by thelonius at 12:40 AM on November 22, 2018 [2 favorites]
. And I suspect I can't tell because they aren't really clear on the difference themselves, like for them, everything is a loan and it's all just play numbers at this point.
The thing that really struck me was when they said something like, "we were offered a card with a $7000 limit, so we spent $3000 of it on..." And I was like $3000 of what? I literally didn't understand until I reread a couple of times that they considered a $7000 debt limit to be some kind of income.
No one just gave you $7000, guys. They just offered you the option of going $7000 further into debt.
This mindset is a big part of their problem, I think.
posted by lollusc at 1:57 AM on November 22, 2018 [29 favorites]
The thing that really struck me was when they said something like, "we were offered a card with a $7000 limit, so we spent $3000 of it on..." And I was like $3000 of what? I literally didn't understand until I reread a couple of times that they considered a $7000 debt limit to be some kind of income.
No one just gave you $7000, guys. They just offered you the option of going $7000 further into debt.
This mindset is a big part of their problem, I think.
posted by lollusc at 1:57 AM on November 22, 2018 [29 favorites]
Profiles of rich people flagrantly spending themselves into debt is a common way to generate anger at people in debt in general, mostly the poor.
Why are people here bringing up predatory lending practices? These are rich people who have easy access to good sources of credit going into incredible debt because they want a certain lifestyle. The hate-read story of the aristocrat with the gambling problem who goes deep in debt is a classic story, this is just a modern version.
Predatory lending is a thing, and it has nothing to do with offering rich people more credit at good terms when they are already in debt. Conflating the two is some embarrassing out of touch middle class white person shit or something, ewww.
posted by Infracanophile at 2:48 AM on November 22, 2018 [10 favorites]
Why are people here bringing up predatory lending practices? These are rich people who have easy access to good sources of credit going into incredible debt because they want a certain lifestyle. The hate-read story of the aristocrat with the gambling problem who goes deep in debt is a classic story, this is just a modern version.
Predatory lending is a thing, and it has nothing to do with offering rich people more credit at good terms when they are already in debt. Conflating the two is some embarrassing out of touch middle class white person shit or something, ewww.
posted by Infracanophile at 2:48 AM on November 22, 2018 [10 favorites]
I had the "benefit" of growing up poor, so that even though I make a six-figure income today, I still live like I did when I finished college: begrudging every dollar spent. I bought a shower mat for my bathroom the other week ($19.95 plus tax) and dithered about whether I REALLY needed it. I'm not proud of this, but it's a life-long habit I can't shake. I can't imagine carrying debt any length of time.
posted by SPrintF at 5:09 AM on November 22, 2018 [7 favorites]
posted by SPrintF at 5:09 AM on November 22, 2018 [7 favorites]
Why are people here bringing up predatory lending practices? [...]
Predatory lending is a thing, and it has nothing to do with offering rich people more credit at good terms when they are already in debt.
I agree. "Predatory lending" has a specific meaning in common parlance and the way it is being used in this thread differs from that.
The hate-read story of the aristocrat with the gambling problem who goes deep in debt is a classic story, this is just a modern version.
It's interesting that you should bring that up. Where the aristocrat who gambled themselves out of a fortune used to be a morality tale, gambling addiction is now recognized as a real problem that can affect everyone regardless of class. It's now a cautionary tale instead.
Casinos reaching out to and attempting to ensnare problem gamblers is a predatory behavior, and I think that's the same sense people are using "predatory lending" in this thread. Lenders are seeking out people who clearly have a hard time managing their money in order to benefit from that.
So not predatory lending in the common sense, but the lenders are being predatory here.
posted by Tell Me No Lies at 6:22 AM on November 22, 2018 [4 favorites]
Predatory lending is a thing, and it has nothing to do with offering rich people more credit at good terms when they are already in debt.
I agree. "Predatory lending" has a specific meaning in common parlance and the way it is being used in this thread differs from that.
The hate-read story of the aristocrat with the gambling problem who goes deep in debt is a classic story, this is just a modern version.
It's interesting that you should bring that up. Where the aristocrat who gambled themselves out of a fortune used to be a morality tale, gambling addiction is now recognized as a real problem that can affect everyone regardless of class. It's now a cautionary tale instead.
Casinos reaching out to and attempting to ensnare problem gamblers is a predatory behavior, and I think that's the same sense people are using "predatory lending" in this thread. Lenders are seeking out people who clearly have a hard time managing their money in order to benefit from that.
So not predatory lending in the common sense, but the lenders are being predatory here.
posted by Tell Me No Lies at 6:22 AM on November 22, 2018 [4 favorites]
You can't buy a home without borrowing money, you pretty much need to borrow money to obtain an education beyond high school. You generally need to borrow money to buy a car (or lease which is basically borrowing money to buy a car).
The American style middle class consumer driven economy requires consumer debt.
There are no company towns anymore. America is a company town and the financial industry is the company.
posted by mygoditsbob at 6:27 AM on November 22, 2018 [17 favorites]
The American style middle class consumer driven economy requires consumer debt.
There are no company towns anymore. America is a company town and the financial industry is the company.
posted by mygoditsbob at 6:27 AM on November 22, 2018 [17 favorites]
I understand the predatory patterns. I understand the spending patterns, I understand the "keeping up with the Joneses."
But I have absolutely no sympathy for their pridefulness. Suck it up and talk to a financial planner. Accept the notion that you might file for bankruptcy. These are tools specifically for people like them.
If they respected and were willing to be responsible to one another, it'd be easier. They're secretly buying things on the side; they'll never get it together if they're keeping secrets. That divorce is overdue.
posted by explosion at 6:48 AM on November 22, 2018 [6 favorites]
But I have absolutely no sympathy for their pridefulness. Suck it up and talk to a financial planner. Accept the notion that you might file for bankruptcy. These are tools specifically for people like them.
If they respected and were willing to be responsible to one another, it'd be easier. They're secretly buying things on the side; they'll never get it together if they're keeping secrets. That divorce is overdue.
posted by explosion at 6:48 AM on November 22, 2018 [6 favorites]
If I'm to be honest with myself, I know a thing or two about spending way too much money on food, and "my son spends $15-20 once week, boy we really need to tell him to knock that off!" is either absurdly downplaying the issue or not what's making the real dent in $160k.
As someone else said, it's a symptom of a larger problem. When I hear the detail, I recognize a kind of behaviour - not thinking about how much you are spending - that the whole family shares. They don't set budgets for their kids getting dinner - and they probably don't set budgets for themselves and their kids for getting clothes or video games or vacations - and all that spending does add up.
As numerous people have shown (including Elizabeth Warren, before she went into politics), it's not spending on consumer goods that has increased over the last 30 years (with the increase in household debt): it's spending on housing, transportation, childcare and healthcare. These costs are often not negotiable - and must be subsidized if we want the majority of people to be able to access them. (I could go on at length, but suffice to say that if you want to imagine what the world would look like with no subsidies in housing, transportation, childcare and healthcare, picture the nineteenth century - and even then, roads were subsidized).
But for this family, it's not just the cost of these things. They have an income well, well above average. It's their expectations and their spending patterns - including on housing (wanted a bigger house).
posted by jb at 7:53 AM on November 22, 2018 [5 favorites]
As someone else said, it's a symptom of a larger problem. When I hear the detail, I recognize a kind of behaviour - not thinking about how much you are spending - that the whole family shares. They don't set budgets for their kids getting dinner - and they probably don't set budgets for themselves and their kids for getting clothes or video games or vacations - and all that spending does add up.
As numerous people have shown (including Elizabeth Warren, before she went into politics), it's not spending on consumer goods that has increased over the last 30 years (with the increase in household debt): it's spending on housing, transportation, childcare and healthcare. These costs are often not negotiable - and must be subsidized if we want the majority of people to be able to access them. (I could go on at length, but suffice to say that if you want to imagine what the world would look like with no subsidies in housing, transportation, childcare and healthcare, picture the nineteenth century - and even then, roads were subsidized).
But for this family, it's not just the cost of these things. They have an income well, well above average. It's their expectations and their spending patterns - including on housing (wanted a bigger house).
posted by jb at 7:53 AM on November 22, 2018 [5 favorites]
How are they surrounded by people with way more money than them (and $160k is already loads) but the public school is that bad [...] - how does that work?
Republicans. Gutting public education was step 1.
posted by caution live frogs at 8:07 AM on November 22, 2018 [7 favorites]
Republicans. Gutting public education was step 1.
posted by caution live frogs at 8:07 AM on November 22, 2018 [7 favorites]
Well, and for a lot of people the presence of any children of color in a school means it's a bad school.
posted by soren_lorensen at 9:06 AM on November 22, 2018 [13 favorites]
posted by soren_lorensen at 9:06 AM on November 22, 2018 [13 favorites]
Yeah, I used to live in a city where any particular family's blatant racism was easily measurable by whether they were concerned about sending their (normally functioning, healthy) kids to public school or not and how hard they tried to get their kids in a suburban district.
See, reader, the city I once lived in had public schools that were in the top 1% of all schools nationwide. However, being the main city's district, most of those schools were 30-50% minority. The suburban districts had more money per pupil, but had worse outcomes and were almost 100% white, aside from families whose kids were good enough to play a sport competitively, in which case the parents that cared so much about xball would literally pay to rent an apartment for certain minority high school kids and their family in one of the suburban districts.
Thus, any parent who said anything about "bad" schools were being openly racist since the only possible metric they could be considering "bad" relative to the other options was what the person speaking considered too many minority students. And every. body. knew it. Even the people who would have (at the time) measured their fortunes favorably to that of Jeff Bezos sent their kids to public school.
And this is in a city where people were actively embarrassed by the city's race riot and vocal racism was widely shunned. Couch it in terms of "more house for your money," or "bigger lots," though, and people just quietly ignored the racism underlying people's choices. Probably because at least that way they weren't attracting attention like the racist hicks out in the country and appearances are what most people were actually worried about.
posted by wierdo at 11:49 AM on November 22, 2018 [9 favorites]
See, reader, the city I once lived in had public schools that were in the top 1% of all schools nationwide. However, being the main city's district, most of those schools were 30-50% minority. The suburban districts had more money per pupil, but had worse outcomes and were almost 100% white, aside from families whose kids were good enough to play a sport competitively, in which case the parents that cared so much about xball would literally pay to rent an apartment for certain minority high school kids and their family in one of the suburban districts.
Thus, any parent who said anything about "bad" schools were being openly racist since the only possible metric they could be considering "bad" relative to the other options was what the person speaking considered too many minority students. And every. body. knew it. Even the people who would have (at the time) measured their fortunes favorably to that of Jeff Bezos sent their kids to public school.
And this is in a city where people were actively embarrassed by the city's race riot and vocal racism was widely shunned. Couch it in terms of "more house for your money," or "bigger lots," though, and people just quietly ignored the racism underlying people's choices. Probably because at least that way they weren't attracting attention like the racist hicks out in the country and appearances are what most people were actually worried about.
posted by wierdo at 11:49 AM on November 22, 2018 [9 favorites]
If they're not saying no to the kids it's not just videogames and sushi. There are youth sports that cost thousands per month, if they've got one in hockey for example they are spending though the nose for it. Club soccer and tennis aren't much better and forget stuff like ice-skating or gymnastics. If the kids get their hair done at an upscale salon and the girl(s) have extensions or lots of color that's another $3-400 per month right there. Add some mani-pedis, spray tans, Mom's hair and nails, up-sells and add-ons at the salon, hair and make up for events and they could be spending a grand or more on personal grooming every month. Easy. Add in the other services upper middle class people often use: dog groomer, gardener, car detailing, dry cleaners, delivery meals and you're up another grand.
It's easy to spend money like water if you live that lifestyle.
posted by fshgrl at 12:28 PM on November 22, 2018 [5 favorites]
It's easy to spend money like water if you live that lifestyle.
posted by fshgrl at 12:28 PM on November 22, 2018 [5 favorites]
Tom: I do all the bills. I don’t know how I ended up with it, but I’m pretty good at it.
I feel like if he were good at the bills this would have been a somewhat different article.
posted by fomhar at 2:36 PM on November 22, 2018 [20 favorites]
I feel like if he were good at the bills this would have been a somewhat different article.
posted by fomhar at 2:36 PM on November 22, 2018 [20 favorites]
I see all this tut-tutting about bad decisions, about "pridefulness", all these holier-than-thou breakdowns of exactly how much money they probably should have if we estimate their expenses at exactly this ... it's honestly a little sickening.
This article is probably wholly fictional, designed to promote Wealthsimple's services, but even if it's not? Come on, people. The problem here isn't that this couple is making short-sighted decisions, the problem is that they've been trained to make short-sighted decisions, by banks that keep pushing credit card after credit card to milk them for interest payments forever, by a political system that shreds public education so they feel they have no choice but to send their kids to expensive private schools, but a society that drills into you over and over that personal worth is defined by your ability to spend and never once teaches you how to control it. Everything around us is constructed to create these scenarios, bit by bit. Some of us only see four or five digits worth of debt slavery, some of us six, but when all of the dice come up 1 at once, you get a clickbaity article about it. That's all it is.
The only sin these people have committed is being born into late capitalism, and for that sin, nobody here can throw the first stone.
posted by kafziel at 3:00 PM on November 22, 2018 [5 favorites]
This article is probably wholly fictional, designed to promote Wealthsimple's services, but even if it's not? Come on, people. The problem here isn't that this couple is making short-sighted decisions, the problem is that they've been trained to make short-sighted decisions, by banks that keep pushing credit card after credit card to milk them for interest payments forever, by a political system that shreds public education so they feel they have no choice but to send their kids to expensive private schools, but a society that drills into you over and over that personal worth is defined by your ability to spend and never once teaches you how to control it. Everything around us is constructed to create these scenarios, bit by bit. Some of us only see four or five digits worth of debt slavery, some of us six, but when all of the dice come up 1 at once, you get a clickbaity article about it. That's all it is.
The only sin these people have committed is being born into late capitalism, and for that sin, nobody here can throw the first stone.
posted by kafziel at 3:00 PM on November 22, 2018 [5 favorites]
Who would lend money to somebody who has 8 maxed out credit cards and student loans in forbearance? Lenders extending credit to these folks doesn't seem predatory, it just seems stupid.
It doesn't matter if they can't pay off the loan by the terms. I'll lend you $100, knowing you'll never have the $100 at once to pay back, if I know you'll pay me $10 a month interest for more than 10 months. Especially if you'll do it for life. So it's just a risk decision of whether you'll make it the 10 months before you crash or not. After that point, I don't even want you to give me the $100. I just want to see how long I can keep getting the $10 bonus checks.
posted by ctmf at 3:29 PM on November 22, 2018 [22 favorites]
It doesn't matter if they can't pay off the loan by the terms. I'll lend you $100, knowing you'll never have the $100 at once to pay back, if I know you'll pay me $10 a month interest for more than 10 months. Especially if you'll do it for life. So it's just a risk decision of whether you'll make it the 10 months before you crash or not. After that point, I don't even want you to give me the $100. I just want to see how long I can keep getting the $10 bonus checks.
posted by ctmf at 3:29 PM on November 22, 2018 [22 favorites]
ctmf basically has the entire answer. The only thing there is to add is that they do care that any given borrower look like they can continue making payments indefinitely because when that perception changes they have to take paper losses that make "the market" unhappy. Beyond that, they really give no shits whether the debt gets paid or not.
Most banks are pretty transparent about it, too, given that you can discharge 5 figures of debt in bankruptcy and within short order they are foaming at the mouth again to lend money as long as you are willing to game the system a bit to keep a decent credit score. The only one that acts like they care is Amex, but really they just know that enough people want their cards badly enough that making people repay in full before giving them another chance won't hurt their bottom line too badly.
posted by wierdo at 4:25 PM on November 22, 2018 [1 favorite]
Most banks are pretty transparent about it, too, given that you can discharge 5 figures of debt in bankruptcy and within short order they are foaming at the mouth again to lend money as long as you are willing to game the system a bit to keep a decent credit score. The only one that acts like they care is Amex, but really they just know that enough people want their cards badly enough that making people repay in full before giving them another chance won't hurt their bottom line too badly.
posted by wierdo at 4:25 PM on November 22, 2018 [1 favorite]
Where's our post-money star trek society already???
Something you rarely saw on star trek was luxury goods. Other cultures had them in the show, certainly, but the show rightly had it that once you're clothed, fed, and have a holodeck and teleportation, the rest is basically affectation, with one as good as the next.
Now, while I hesitate to criticize the choices of others, I think it behooves all of us to remember that in 2018, if you're healthy, it's not THAT expensive to get your basic needs met, something which the peasants of the past (and the impoverished today) would regard with Star Trek-like awe. Ffs we made horses, hunting, and sewing obsolete. People who engage in these things are rightly regarded as hobbyists. Also, this is a planet where metafilter is free.
And then we have this whole sector of the economy built on debt and purchasing shit you do not need. Like I can buy a hunting rifle on credit, and then in theory I'm supposed to work a steady job with time i could be hunting to pay it off. Wtf? And I get to use that same credit to buy Doritos and pay hospital bills. And the companies that provide my necessities and luxuries get to charge whatever they want.
How, in any rational world, does such a system not go off the rails? The incentives are all fucked up and it's a miracle there aren't more stories like this. It's amazing most people don't become the people in this story. I blame the individual choices here, but I blame them last. You don't blame the lab rats for starving when you make the maze damn near impossible.
The only winning move is to live like you're a time-traveling peasant from the Dark Ages. The financial sorcerers in charge of modernity have produced some miracles, but they're more capricious than the Olympian gods and definitely don't give a shit if they squash you, so narrow yourself down to the lowest possible financial profile and only believe money augury you can understand. I have running water and ham sandwiches and Netflix/Spotify and a lay-z-boy. The rest of that shit is witchcraft i ain't fuckin with.
posted by saysthis at 6:46 AM on November 23, 2018 [3 favorites]
Something you rarely saw on star trek was luxury goods. Other cultures had them in the show, certainly, but the show rightly had it that once you're clothed, fed, and have a holodeck and teleportation, the rest is basically affectation, with one as good as the next.
Now, while I hesitate to criticize the choices of others, I think it behooves all of us to remember that in 2018, if you're healthy, it's not THAT expensive to get your basic needs met, something which the peasants of the past (and the impoverished today) would regard with Star Trek-like awe. Ffs we made horses, hunting, and sewing obsolete. People who engage in these things are rightly regarded as hobbyists. Also, this is a planet where metafilter is free.
And then we have this whole sector of the economy built on debt and purchasing shit you do not need. Like I can buy a hunting rifle on credit, and then in theory I'm supposed to work a steady job with time i could be hunting to pay it off. Wtf? And I get to use that same credit to buy Doritos and pay hospital bills. And the companies that provide my necessities and luxuries get to charge whatever they want.
How, in any rational world, does such a system not go off the rails? The incentives are all fucked up and it's a miracle there aren't more stories like this. It's amazing most people don't become the people in this story. I blame the individual choices here, but I blame them last. You don't blame the lab rats for starving when you make the maze damn near impossible.
The only winning move is to live like you're a time-traveling peasant from the Dark Ages. The financial sorcerers in charge of modernity have produced some miracles, but they're more capricious than the Olympian gods and definitely don't give a shit if they squash you, so narrow yourself down to the lowest possible financial profile and only believe money augury you can understand. I have running water and ham sandwiches and Netflix/Spotify and a lay-z-boy. The rest of that shit is witchcraft i ain't fuckin with.
posted by saysthis at 6:46 AM on November 23, 2018 [3 favorites]
How are they surrounded by people with way more money than them (and $160k is already loads) but the public school is that bad [...] - how does that work?
A couple ways. First and foremost, the district as drawn may not be confined to that neighborhood, and often intentionally isn't. And secondly, there may be (and often are) laws that mandate how many children are apportioned to each school, or how many staffers or enrichment staffers are at each school. It's well intentioned - people don't want the rich neighborhood to be a Shangri-La while the poor neighborhood approaches a Dantean circle of hell. But it means that the ways that rich neighborhood schools often used to be significantly better often are not as much.
The school that I found my daughter was woefully underprepared in was a school in the heart of the nicest neighborhood in my county - I had to get an exception for it. I expected it to be good. But it still had the small class sizes, it still had the same crappy material and lack of high standards, and it still had the inability to get bullying taken seriously.
posted by corb at 8:47 AM on November 23, 2018 [1 favorite]
A couple ways. First and foremost, the district as drawn may not be confined to that neighborhood, and often intentionally isn't. And secondly, there may be (and often are) laws that mandate how many children are apportioned to each school, or how many staffers or enrichment staffers are at each school. It's well intentioned - people don't want the rich neighborhood to be a Shangri-La while the poor neighborhood approaches a Dantean circle of hell. But it means that the ways that rich neighborhood schools often used to be significantly better often are not as much.
The school that I found my daughter was woefully underprepared in was a school in the heart of the nicest neighborhood in my county - I had to get an exception for it. I expected it to be good. But it still had the small class sizes, it still had the same crappy material and lack of high standards, and it still had the inability to get bullying taken seriously.
posted by corb at 8:47 AM on November 23, 2018 [1 favorite]
I think that helping to cultivate successive generations with the attitude that public schools are something that we must invest in as a society is the only path forward, and I don't see how putting my children in private schools serves that societal goal.
When my (hypothetical, we're working it) children come to me to ask about how to school their own children someday, I don't think that "Make sure you're in a financial position to get your child into the expensive schools" is a procedure that's going to scale. The message I'll give them, "Put them in the public schools and engage with them to make them better for everyone, even if that doesn't maximize the personal potential of your own children along some vectors" is going to be a harder message to sell if that's not what we did with them. Ideas about sacrifice and responsibility to others are values that could use some fertilizer in USA society, in my opinion.
posted by Kwine at 10:47 AM on November 23, 2018 [5 favorites]
When my (hypothetical, we're working it) children come to me to ask about how to school their own children someday, I don't think that "Make sure you're in a financial position to get your child into the expensive schools" is a procedure that's going to scale. The message I'll give them, "Put them in the public schools and engage with them to make them better for everyone, even if that doesn't maximize the personal potential of your own children along some vectors" is going to be a harder message to sell if that's not what we did with them. Ideas about sacrifice and responsibility to others are values that could use some fertilizer in USA society, in my opinion.
posted by Kwine at 10:47 AM on November 23, 2018 [5 favorites]
Their lack of understanding of their position, insistence on keeping up with their neighbors and inability to imagine a way out reminds me of Jane Austen's Persuasion in which the Elliot family has managed to outspend the resources of a large manor:
"Does it occur to you that there is any one article in which we can retrench?" and Elizabeth, to do her justice, had, in the first ardour of female alarm, set seriously to think what could be done, and had finally proposed these two branches of economy, to cut off some unnecessary charities, and to refrain from new furnishing the drawing-room; to which expedients she afterwards added the happy thought of their taking no present down to Anne, as had been the usual yearly custom.
posted by The Elusive Architeuthis at 1:39 PM on November 23, 2018 [4 favorites]
"Does it occur to you that there is any one article in which we can retrench?" and Elizabeth, to do her justice, had, in the first ardour of female alarm, set seriously to think what could be done, and had finally proposed these two branches of economy, to cut off some unnecessary charities, and to refrain from new furnishing the drawing-room; to which expedients she afterwards added the happy thought of their taking no present down to Anne, as had been the usual yearly custom.
posted by The Elusive Architeuthis at 1:39 PM on November 23, 2018 [4 favorites]
I keep being struck by the title of this post, from the article. There's a reason they call it, "in over your head." Extreme debt feels like drowning, and when it feels like the future is unattainable, there is only the suffocating now. I feel bad for these folks even as I look askance at some of their choices. I hope they find a way up.
posted by agregoli at 4:40 PM on November 23, 2018 [4 favorites]
posted by agregoli at 4:40 PM on November 23, 2018 [4 favorites]
The only winning move is to live like you're a time-traveling peasant from the Dark Ages.
Give them six weeks and they'll be furious when their Netflix buffers and their Seamless delivery is 10 minutes late. The human capacity for recalibrating itself to current circumstances is nearly infinite in both directions.
posted by atrazine at 5:25 AM on November 24, 2018 [4 favorites]
Give them six weeks and they'll be furious when their Netflix buffers and their Seamless delivery is 10 minutes late. The human capacity for recalibrating itself to current circumstances is nearly infinite in both directions.
posted by atrazine at 5:25 AM on November 24, 2018 [4 favorites]
Something you rarely saw on star trek was luxury goods. Other cultures had them in the show, certainly, but the show rightly had it that once you're clothed, fed, and have a holodeck and teleportation, the rest is basically affectation, with one as good as the next.
Not so sure about that - there were plenty of officers who had a decent-sized collection of antiques and first-edition copies of books and such. That is probably an expensive hobby. If the Midshipmen also had whole libraries of first editions of all the Harry Potter books or something, then okay, but I suspect that it is a habit only the officers could adopt.
posted by EmpressCallipygos at 9:35 AM on November 24, 2018 [2 favorites]
Not so sure about that - there were plenty of officers who had a decent-sized collection of antiques and first-edition copies of books and such. That is probably an expensive hobby. If the Midshipmen also had whole libraries of first editions of all the Harry Potter books or something, then okay, but I suspect that it is a habit only the officers could adopt.
posted by EmpressCallipygos at 9:35 AM on November 24, 2018 [2 favorites]
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What I''m saying is this is a systemic thing and it's not about this couple's money choices. Let's ban banks from doing this before we shame people for making dumb choices in college/just out of college/after having a baby/whenever really.
posted by The River Ivel at 12:15 PM on November 21, 2018 [23 favorites]