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Author and essay is a privileged, sniveling, humble-brag, with a heaping side of self-pity because he's shocked that life ain't perfect and he can't live above his means forever.
His Hampton abode has to be worth 7 figures, but he likely has no equity to speak of due to multiple mortgasms to fund the lifestyle his family 'deserved'.
Low income people are sometimes just too lazy and careless to save money. Eating out too often makes a serious dent to finances if our income is too low. One should learn Cooking Food at home. Making a Sandwich and Coffee is not Rocket Science. One should be careful in using Utilities like AirConditioning, Heating or things like Phone Data plans. Use them as per need. Some people just spend money on having lots of shoes, clothes, jackets. All these expenses can be controlled.
Just depends on how careful they are. My household income is about that much. My house isn't big, but the kids both have their own rooms. The house is 6 years old and everything in it is in good repair...ac, plumbing, appliances. We have two cars that are 15 years old, paid off. We do our own repairs when possible...I did the brakes on the minivan this weekend. I fix our appliances and my husband is good at changing out light fixtures and replacing faucets, sinks, toilets, etc. so we make small upgrades to our house pretty often...ceiling fans, deeper kitchen sink, nicer toilets, etc. Everyone in the family has their own computer and their own tablet, and our phones are a couple of years old. We've all got good health insurance through my husband's job. We eat pretty decently. Right now I've got $1500 in savings and $4500 available on a credit card, in case we have any emergencies.
I know people who have more than double our income who are really struggling financially, even some of my neighbors whose mortgage is probably about the same as mine and they can barely make it, but I know they have more money because they both work. It's just a matter of planning, and (for some folks) getting to the age where you're determined not to ask your parents for money, ever, for anything.
you are correct. I had a friend in NY who lived in one of the best neighborhoods. She had just purchased a $990k home and was complaining about the cost of summer camp and how she couldn't afford it, yet she and her husband both drove Lexus cars.
Some poeple dont think too hard about chasing the life style.
The point is that our wages have stagnated and our costs have gone WAY up - especially college and health care.
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Quote:
Originally Posted by Kibbiekat
The rest of the paragraph: Adjusted for inflation, the federal minimum wage peaked in 1968 at $8.54 (in 2014 dollars). Since it was last raised in 2009, to the current $7.25 per hour, the federal minimum has lost about 8.1% of its purchasing power to inflation. The Economist recently estimated that, given how rich the U.S. is and the pattern among other advanced economies in the Organization for Economic Cooperation and Development, “one would expect America…to pay a minimum wage around $12 an hour.
From your article: If it had, the minimum wage today would arguably be about $22 per hour.
The minimum wage should have reached $21.72 an hour in 2012 if it kept up with increases in worker productivity, according to a March study by the Center for Economic and Policy Research. While advancements in technology have increased the amount of goods and services that can be produced in a set amount of time, wages have remained relatively flat, the study points out.
Even if the minimum wage kept up with inflation since it peaked in real value in the late 1960s, low-wage workers should be earning a minimum of $10.52 an hour, according to the study.
I don't claim to be an economist, but, the way I see it, if the cost of everything has gone up by a certain percent, so should wages. They haven't.
I think that's the point the author is making. He's using himself as an example and I agree with others that he made some awful choices. But taking him out of the picture, the point is that wages haven't kept up with the rising cost of living and the income inequality has increased obscenely. So the only ones benefiting are those at the top. And that fact affects us all, regardless of how fiscally frugal you are.
I heard a story on NPR this morning about teaching financial literacy classes in high school, and how it can help keep future generations from making the same mistakes that this author did. A good financial literacy course can, at the very least, keep young people from getting into bad debt situations early on which limits opportunities to save. The problem is that very few states require financial literacy curriculum.
You could have it as an elective. You'd be able to tell who is likely to be a responsible saver and spender by who chooses to take the course. Credit card companies could charge lower interest rates to people who have completed it.
There is no amount of frugality or thrift can pay for middle class requirements now. I could fill a room with iPhones for what college costs today. If I'm given a 6 month window of time left to live by a doctor, I could check in to the Waldorf Astoria for my last few months and still have a lot more money left over vs. paying for the health care.
The author sacrificed his retirement, his savings and his parents savings to send his kids to great colleges. He had to set them up beforehand to get accepted so he moved to the best district possible and his wife stayed at home. How many of you would tell your kid, "you got into Harvard but I can't afford to pay for it, so you're going to community college."
It seems that he was extraordinarily successful at setting his daughters up for success, but at what cost? That's pretty much the takeaway from the article. College was not always that expensive - even the best ones. The things like your regional podunk state college used to be teacher's colleges that were literally tuition-free! If you got accepted you paid for housing and books, period. Now they cost $20K a year. There is little price elasticity in higher ed either. It's not like Bates College is that much less than Harvard. It's about the same, actually. It's not like University of New Mexico is that much cheaper than UC-Berkeley. Again, about the same. Unless you all think college educations are 15 times better than they were 40 years ago, there is something wrong.
What we SHOULD be doing, and what I think the author is trying to inspire, is for people to start beating down the doors of the health care and higher education industries. There is something wrong with both and people complain, but don't to anything about it & continue to pay it though loans, etc... What's worse, there is very little price elasticity for higher ed. A lower quality private school like Bates College costs about the same as Harvard. University of New Mexico costs about the same as University of California-Berkeley. It's not like you can "go cheap." Going cheap means low-tier public regional universities or community college. All the similar tiered colleges have similar sticker prices nationwide. I say this as someone who strongly believes in the mission of community colleges... they are NOT the same. If someone is capable of going to Harvard but goes to a CC.... their parents failed them.
Don't you think Harvard knows this? https://college.harvard.edu/financial-aid/how-aid-works I quote, briefly: "approximately 70 percent of our students receive some form of aid, and about 60 percent receive need–based scholarships and pay an average of $12,000 per year. Twenty percent of parents pay nothing. No loans required."
Don't you think Harvard knows this? https://college.harvard.edu/financial-aid/how-aid-works I quote, briefly: "approximately 70 percent of our students receive some form of aid, and about 60 percent receive need–based scholarships and pay an average of $12,000 per year. Twenty percent of parents pay nothing. No loans required."
If Harvard were representative, that would be a great point, however you can't compare Harvard with its 40 billion dollar endowment with random under funded state university. Ironically, an Ivy would be cheaper than most other universities because of the amount of aid they offer.
Don't you think Harvard knows this? https://college.harvard.edu/financial-aid/how-aid-works I quote, briefly: "approximately 70 percent of our students receive some form of aid, and about 60 percent receive need–based scholarships and pay an average of $12,000 per year. Twenty percent of parents pay nothing. No loans required."
Every time I see statistics like these I "turn them around": what Harvard is also saying is that 30% of their students don't receive any aid at all (from Harvard or "outside" sources, presumably), which means they come from families that can afford to pay the ~$61,000/year price tag (info from here: https://college.harvard.edu/financia...ost-attendance ). And actually, if I'm interpreting Larry Siegel's quote correctly, it's more like 40% of their students come from families that can afford to pay $61,000 a year for college.
And THAT is one of the reasons that Harvard is "worth it" -- the kinds of connections you can make there.
More to the point of the OP, the linked article: I have no problem with the author wanting to send his kids to elite colleges. I DID cringe when I read that he and his wife had drained their 401(k) to pay for a WEDDING (seriously?!!). That was only one of many financial mistakes he made, but at least he admits to them.
I grew up working-class and know what it's like to live paycheck to paycheck. I now make a decent income, have my own house (and a rental property), have a good-sized retirement account, etc., but those things didn't happen "by chance" -- I had to read, and learn from my mistakes, and read some more, etc.
There ARE a lot of people who make bad financial choices (I personally think that having kids when you can't afford them is the biggest), but I think we've ALL made SOME bad choices. (I certainly have!) And some families, honestly, would have a very hard time even if they were to do everything "right." My younger sister is one of the hardest-working people I know (also one of the kindest and smartest), but she doesn't make much money (she's a teacher's aide -- works mostly with young autistic kids) and it seems like every time her family gets a LITTLE bit ahead, her husband loses his job and the downward spiral begins again. She has very little to show for literally DECADES of very hard work. (In her case, she made a bad choice of husband ... but how does one know in their 20s how things will turn out down the road?)
You don't even have to have a high school diploma or GED to become a CNA...you just have to take a four-month course.
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