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Fascinating article in the Atlantic written by a successful free-lance writer, published 2.5 yrs ago in The Atlantic, about how poor he is, in response to the fact that most Americans (including him) are living so on the financial edge that they could not get together $400 in an emergency.
What struck me was that, as much as the author professed that they had not spent profligately, there WAS one area in which they spent way, way beyond their means... education for their two daughters, and probably another, housing. I wouldn't be surprised if they had spent the equivalent of a million dollars on private education for their two kids. First, they lived in NYC, one of the highest rent areas in the country, and the local public schools were not very good (meaning, they were slum schools). So they paid for the kids to go to private schools - which could certainly have been half a million for both for 9 years. Then they moved out to East Hampton, a very wealthy vacation area, and rented, but at least they could use the public schools. Of course, mom chose to stay home, since she couldn't work in film from there, and anything less than that would have been beneath her. And she NEVER WENT BACK TO WORK! Then, instead of telling the kids that they had to choose from among NY state's truly vast and excellent selection of very inexpensive state colleges, which offer every single major known to man, they instead decided that the kids had "earned" the right to go to whichever private colleges they wanted, namely Stanford and Emory, and drained the previous generation's savings to pay for it - meaning no inheritance. They (meaning parents and grandparents) then also paid for graduate school for the kids. One is not only a doctor, but also was a Rhodes scholar, and went to Harvard med. She'll be okay, although nowadays you really need a two doctor family to afford private college for the kids, and one of them had best be in the high-earning, procedurally-oriented specialties. The other one is a highly educated social worker, who won't be able to afford diddly squat for herself, let alone her kids, unless she marries into money or to a very high earning professional. And after all that, THEY LIQUIDATED THEIR 401K to PAY FOR A WEDDING!
Any of these steps, they could have chosen to live within their means. Even if they'd HAD to live in NYC for their jobs, they could have bought or rented in a north Jersey suburb or south shore Nassau county suburb with decent schools and commuted. They'd have had a house with equity, saved all that money on private schools. They could have sent the girls to NYS universities at a third the cost of the private colleges. And who in their right minds liquidates their retirement savings to pay for a party, even a wedding party? That's just NUTS! And mom could have continued working, at the best-paying job she could have found, even if it wasn't in film.
So yes, their current financial quagmire, where they can't afford to even pay the taxes on his freelance income, WAS of their own making, because middle class people can't afford to pay for expensive private universities, and expensive private schools, and expensive weddings for which they have to liquidate their retirement savings, when they don't have a pot to **** in. What it really comes down to is spending money you don't have, for things YOU think are necessities, but really aren't. Living above one's means is the same old story, no matter what class you are.
When I was in my early 20s, working a job at which I earned about 18K/yr, I STILL managed to save up a substantial emergency fund. Of course, I lived in a cheap tiny 3rd floor mother in law apt in someone's house in a slum area, and I didn't have a car when all my friends had one - instead I took buses and trains, since I lived on the outskirts of a city. When I finally got a job that paid nearly twice that, but it required a car, I got the cheapest new car I could get, and had it paid off within 6 months. When I needed surgery, I had the money saved up for the 2K deductible - in the 1980s! When I got married, despite being at the end of my student years, I had saved up 20K for a down payment on a house, when my training income was about 33K/yr for 3 yrs. When my income dropped mid career, I pulled my kids out of private schools and sent them to public schools in the decent town in which we'd, with foresight, bought, for many reasons, one of which was in case we needed the public schools. And when the kids applied to college, instead of saying, "Wherever you want, little prince, no matter the cost, you've earned it!", we had said for years, "You'd better plan on earning scholarships, cause we're not paying any quarter of a million dollars each for college for you guys!" And the kid wound up at an out of state public flagship U, that was a great match for the kid, with the maximum MERIT scholarship they offered, at less than half the price of a private school.
I probably earn less than this guy, and my income is self-employed, too. But I've made financial choices that mean there's plenty for retirement, and plenty to cover emergencies. It's not necessarily our financial system - it's all about the choices you make.
Kids are fine to have. You should just wait a little longer to have them and when you do don't go overboard. The days of mom staying home at the age of 20 to have three kids and raise them while the dad goes off to work from 9-5 really are gone. It's not a big deal if you adapt.
I know that between my company's health insurance policy and student loans, those expenditures are the equivalent of a 1 Bedroom apartments rent. Add on the rent, car note, insurance, groceries and whatnot, it's hard to save a substantial amount AND also have a life. I've been moving upwards in my position at work, but not fast enough to keep up with the cost of living.
I'm going to be starting a part time gig, but still... eventually something's going to have to give. Our tax dollars are no longer working for us, and Americans practically have to mortgage their incomes to folks who do nothing for them, and for things that don't appreciate in value. Excessive fee's to simply gain education/credentials!!!? (Student Loans) Thousands paid to health insurance companies!!?? (Just in case something happens).
I can't help but to think what the $15,000+ I've spent on health insurance over the last 6 years could have done for ME instead of practically giving it away. My glass is half full though, and I know that me and many other citizens are doing their best. That old JFK quote can now be reversed to "What is the government doing to honor it's citizens?". At some point the government needs to take accountability for the state of the economy, and learn how to support the common folk. My poor and middle class neighbors are not legislators, and I refuse to point fingers at them, accusing them of being "on the other side".
I remember reading that Atlantic article months ago. This man's problem wasn't kids; his problem was that he was a big-time social climber who felt entitled to a certain lifestyle even though he really couldn't afford it, and who put projecting a particular image ahead of achieving financial security. He really has little in common with those much more average American families who are struggling because their wages have stagnated while their cost of living has relentlessly increased. It's offensive for the Atlantic Monthly to use him as an example of a "typical struggling middle-class family."
If someone couldn't cover a $400.00 emergency, are they really middle class? I suppose it depends on how the term is defined, which can be all over the place.
Quote:
Originally Posted by Aredhel
This man's problem wasn't kids; his problem was that he was a big-time social climber who felt entitled to a certain lifestyle even though he really couldn't afford it, and who put projecting a particular image ahead of achieving financial security.
Living on financial edge with a middle of the road salary can be caused by factors out of one's control, but yes, this is an example of irresponsibility causing it.
Quote:
Originally Posted by wheelsup
The days of mom staying home at the age of 20 to have three kids and raise them while the dad goes off to work from 9-5 really are gone. It's not a big deal if you adapt.
This is true of people making a modest salary, but it's not the case if the dad is making a high salary (typically well into the six figures per year). In some areas there are plenty of stay at home moms or stay at home moms who have minimally demanding jobs (i.e. blogging, etc.) while the husband is out making lots of money. Occasionally, it's the mom making a high salary, but it's usually the dad.
Quote:
Originally Posted by austiNati
I can't help but to think what the $15,000+ I've spent on health insurance over the last 6 years could have done for ME instead of practically giving it away.
That's a huge issue and one fairly unique to the US (unfortunately) if we're comparing ourselves to countries with somewhat similar socioeconomics. Some people spend this much, and shockingly more, in one year, which is ridiculous!
That's like saying that all Shakespeare contributed was "words". Come on, artists, writers, musicians immeasurably enrich our lives. Rational, the way you look at things, only those who make a product that is marketable overseas actually contribute to GDP. And art, literature, and music are also marketable overseas.
I don't know if what he did was all about social climbing. I am sure that there were other day to day and monthly and yearly expenses that he didn't NEED, but just felt sure that they had to have. But I doubt that they added up to the equivalent of 50-120K/yr, which is what private school in NYC and private college would have run for his two daughters combined. The wedding that he cashed out his 401K for? Now, THAT was absolutely about maintaining the image of being upper middle class, when he was really poor. What did he think, that the girl's in-laws would force their son to drop her if they knew that the girl's family was destitute?
I agree, Aredhel, this man had a good enough income to achieve financial security. It was just how he chose to spend his money. It's not as if he didn't have enough to pay for basic food, clothing, and shelter in a town with okay schools for his daughters. I suspect that no matter how much he had earned, there would have been things he just HAD to have for himself and his family, that would have eaten up all the money. Reminds me of the D.H. Lawrence short story (that after all is only words, but it made a HUGE impression on me when I was a teen, never forgot it), The Rocking Horse Winner. Here is a link to it online (it's in public domain by now).
In the story, the unspoken mantra of the home is, "There must be more money, there must be more money..." And of course, whenever there IS more money, it's immediately spent on things that indicate higher social status, and the need for more money becomes ever greater.
So yes, I DO think that this guy had a lot of nerve to put himself in the same category of need as people who limp along earning perhaps 60K/yr as a couple, working full time, trying to raise a couple of kids on their own, living from paycheck to paycheck, for whom a $400 car repair bill is a torpedo that can sink their leaky dinghy of a financial ship.
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I suppose it depends on how the term is defined, which can be all over the place. 
