My thoughts on the Atlantic middle class article
The May issue of The Atlantic contained an article about middle-class Americans, and it's getting a fair bit of notice.
These types of articles tend to be rather polarizing, with people on one side feeling like, yes, wages are unfair and it's impossible to avoid staying out of debt because the cost of living is rising at an unprecedented pace.
And the other side tends to be all, "Dude! If you just spend your money wisely, then it's no problem to stay out of debt/build a nest egg/retire early."
I think the truth is probably somewhere in the murky middle.
The article does cite some alarming statistics that are raising the eyebrows of frugality enthusiasts everywhere.
For instance, a Federal Reserve study recently showed that 47% of Americans would not be able to come up with $400 to cover an emergency expense.
(They'd have to borrow money or sell something.)
And according to a 2014 Bankrate survey "only 38 percent of Americans would cover a $1,000 emergency-room visit or $500 car repair with money they’d saved."
Frugality Does Matter
I am positive that some of these cases are due to circumstances beyond people's control. But having spent a fair number of my adult years living on an income well below average, I can also vouch for the fact that the financial choices we make have an impact.
(To be fair, the author does state that several times.)
Except for one particularly low point in our house remodel, Mr. FG and I would always have been able to cover a $1000 emergency expense, and that was with an income that I assume was well below the average of the survey respondents.
We weren't earning a lot of money, so we kept our spending to a pretty bare minimum. It wasn't exactly fun, but it was more fun than being in debt. Or having no savings.
So, on the one hand, I think people have more control over their finances than they think they do. If a warehouse worker and a stay-at-home piano teacher with 4 kids can stay afloat, then at least some of those survey respondents probably can too.
But on the other hand...
Circumstances Matter Too
Mr. FG and I have made mindful choices over the years to keep our spending below our income, but there are also circumstances beyond our control that have helped us, and it would be disingenuous to ignore those.
For instance, we bought our townhouse before the housing market exploded and we ended up making $133,000 when we sold it. That allowed us to buy a single-family home when otherwise it would have been impossible.
My dad and my brother gave hours of their time to help us fix up this house, hours we'd never have been able to afford.
We don't deserve any credit for that.
We also have been fortunate enough to avoid some financially devastating circumstances.
For instance, no one in my household has been sick enough to rack up enormous hospital bills. Mr. FG and I have never been out of work. No one here is disabled.
We sure don't deserve credit for that.
If any of those things had happened to us while we had a really low income, we could easily have ended up in a financially disastrous state. We usually had enough saved to weather financial storms of the $3000 variety (heat pumps died at both of our houses!), but not of the $20,0000-$100,0000 variety.
Where does that leave us?
First, I'm reminded that the most important financial picture to look at is our own.
It's easy to judge other people based on a survey response or an article, but it's not really possible to know every in and out of their situations. And we don't have control over how other people spend their money anyway!
So, it's important to check our own attitudes and worry about ourselves rather than others.
And along those same lines, it's important to acknowledge the privileges we each have, which we deserve no credit for. That goes a long way toward helping our attitude toward others be a bit more humble.
(I'm preaching to myself here because heaven knows I read that article and initially thought, "Geez! He's been making a solid income for years and is struggling, while we managed to have a savings account even on $30,000 a year?? What in the world??" )
Second, despite the bleak things the article says about wages and income, your financial situation is probably not utterly hopeless, and you DO have some control over it.
There are lots of us out there who are carefully spending and saving our money, and we are having success at it, even in a financial climate that isn't especially friendly to the middle class.
So, be hopeful, don't buy into the doom and gloom and don't fall into the, "Why even try??" trap. Your efforts to earn more and spend less will not be for naught.
Third, it's super important to communicate with your spouse about finances.
The author admits he kept his wife in the dark for years, and I imagine things might have turned out a bit differently if she'd known their true financial state.
I use a monthly money email to keep Mr. FG in the loop and I highly recommend that practice if you have trouble with money communication!
Fourth, if you want to get into a decent financial position, you are going to need to make sacrifices.
Even if you make a good income, you can easily spend it all by living the usual American lifestyle.
If you consistently go out to eat, shop for pricey clothes, pay for expensive haircuts/hair dye/makeup/nails, always buy the latest gadget, etc., etc., etc., then you will definitely have trouble staying afloat.
And if you make large-scale financial choices such as living in an expensive house and or paying for expensive education (that's more the style of the article author's choices), you'll also have a lot more trouble staying afloat.
But if you live in a modest home, consider less-expensive educational choices, eat at home, buy second-hand, repair instead of replace, do some DIY, avoid constant upgrades, and look for other ways to cut your bills (like Ting! or Ooma.), it won't be such an uphill battle to stay financially solvent.
I mean, I think that you can live a pretty darn rich life on a small income, but doing so does take some creativity and some thinking outside of the box, and that's what I mean when I say you need to make some sacrifices.
If you live like the average American, you shouldn't be surprised when your finances end up like the average American's.
But if you can manage to make some counter-cultural choices, your odds of getting into a happy financial spot are much higher.
So. Have a humble attitude toward others, and have a hopeful attitude about your own finances.
(Maybe I should have just said that and deleted the other 1100 words I wrote! ;))
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I have nothing groundbreaking to add to your awesome thoughts, but maybe my own personal story:) We lived like most Americans until I started listening to Dave Ramsey on a trip to Auburn in 2008...War Eagle! Then a light switch flipped on...what a wonderful idea of paying off our debt, even our house, in such a quick time by just reducing spending in other categories. I don't know why it was groundbreaking at the time, but I got so excited that we started scheming up scenarios to pay off everything in 4 years...and we did! $80,000 in 4 years including our house!! Just by living cheaply and most importantly living way below our income level. Anyone can do it, but they need to be inspired! Read Dave Ramsey people and dare to be weird.....and debt free:)
Oh wow- 80,000 is amazing!
Awesome, Elizabeth! Paying off debt and living below my means has really paid off (no pun intended) in my situation as well.
I had never understood why my sister seemed to always have so much more money, although our personal take home pay is not much different. Last year when we planned our parents' 40th wedding anniversary celebration, I learned part of the answer - I started from the position of 'here's what I can afford to spend, what can we do with that' and she started from the position 'here's what I want to do and money is no object'. She paid her share of the party on credit. Lesson one: people who are spending lots of money don't necessarily have it.
The second epiphany came this year - I bought a part-rent, part-own house just before Christmas (because it made sense for me financially - YMMV!) and although my (small) mortgage payment comes out monthly, rent is about half the total cost and is paid quarterly. Although I'm saving up the required amount for rent, it's been amazing to see how quickly my bank balance has climbed. I knew intellectually that having a partner to split housing costs makes things cheaper, but I didn't really understand it. Lesson two: never compare your financial situation to others in different financial positions. (Also, oddly excellent motivation to start dating again!)
Sophie, I love your thoughts. Your comment on your approach toward money vs. your sister's is something that I have thought about often but have never been able to condense into words like you did. Thank you! I come from a family of a lot of "here's what I want to do and money is no object" thinkers, and it's been a process to step outside of that mentality and into yours of "here's what I can afford to spend, what can we do with that?" (My husband lives in your camp, so he's helped me see the light.) Anyway, thank you!
Whatever you think of the author's other choices, he should be commended for one thing. For almost an entire working life, he struggled to keep up with the Joneses, even though it was mostly an illusion. Now he has admitted the fraud in the most public way possible, undoing all his past efforts. That has to be really hard--and may help others who keep up appearances they can't afford, because they are too embarrassed to admit the truth to family, friends, or the world at large. (On a side note, I can't figure out why the wife was so unaware, or why she couldn't find some kind of work. But perhaps, like Kristen mentioned in her own post about family the other day, he respected his spouse's privacy, and didn't feel right giving just his side of her story.)
Yeah, it does take guts to be that vulnerable about something as personal as finances. I'm sure he knew he'd be ripped to shreds, but he went ahead and wrote the article anyway.
Yes, I agree. I feel like he took this honest approach so people could try to look at their own situations openly. I was not surprised about a great percentage of people not being able to scrape up $400... BUT I was baffled when I read it included people that make much, much more money.
I too am judgmental sometimes about others spending even when I try not to be. This is a good reminder that I can only control my own situation.
I've been giving this a lot of thought as well. It seems to like two things have to change. One, more people need to rethink what a good and decent life looks like. We get pressured all the time to move to a more expensive neighborhood and send our kids to private school, and so many of the people I know (people who are at all different income levels) are so focused on what they don't have that they don't seem to enjoy what they do have. Two, income inequality needs to be addressed in this country. Wages have been flat for so long while the cost of housing and healthcare have skyrocketed and governments increasingly do not have enough money to care properly for education and infrastructure, all the while a small group at the very top has gotten wealthier and wealthier.
Hear, hear!!
Thank you for your wise words!
It's all OK until it isn't. I had a job as a teacher and home I rented until a natural disaster struck and took everything from me. I had to begin all over far away from home with my teenage granddaughter. Fortunately, I found part time work in my new city until I retired 2 years ago, but debts mounted. Now, 11 years later I am just finding my way out of the abyss. It's not been easy and I live on a wing and a prayer, but have an apartment that I love in a location that is perfect for me.
Financial stability is a tricky thing and one major crisis can land anyone on their backside.
Good luck to you, Diane, and may that wing and prayer, and your hard work, get you where you want to be.
I read the Atlantic article and I have no qualms being judgmental about the author draining his inheritance to pay for his kids' college expenses, and then emptying a retirement account to pay for his daughter's wedding. What a bozo.
College I can see; wedding - nope.
To send one to Stanford? IE my son is about to head college and our attitude is a good school is desired, but Stanford isn't required. Once one graduates from college, your first job will look at where you went to school, after that, probably not. No need to spend the big bucks to send someone to Stanford, if you can't afford it. And he could not afford it, but did it anyway.
I recently read/ listened to Dave Ramsey's Smart Money, Smart Kids book and the section on college/ tertiary education was absolutely excellent. He's got some really good thinking going and presents it all in a very logical fashion.
I know people from wildly different economic situations - from gazillionaires to people struggling to live from paycheck to paycheck.
I think one of the most basic decisions a person (couple) of any income makes is whether or not they are going to "keep up with the Joneses."
The author of the Atlantic article felt the need to give his daughters the best education, weddings, etc. He is highly educated and sophisticated and often, those traits bring a lot of expectations. Not to meet those expectations can mean much better financial health - but also social isolation from a peer group.
People who have a low income can also feel pressure to keep up with their own Joneses - to get the latest cell phone, to always buy new clothes, to spend a lot at Christmas and to eat out.
I think, barring a health crisis, when a person chooses to think independently and not worry about fitting in, they can escape a LOT of financial pressure and can be much more financially secure.
Want to feel like a misfit? Pay cash for your car. I hadn't realized what a given debt is for so many until I bought my used Honda with a cashiers check, after years of careful budgeting and saving.
As we learned over the years, there are spenders and there are savers. We can learn from each other and we have to own our financial mistakes.
And the salespeople are so confused! "What do you mean you don't want to finance?" "I mean I want to give you this check instead, and you give me the paperwork, and we're done here."
We even bought my wife's car from a family member of her's who works at the dealership and he was really surprised that we had no interest in financing.
Our credit union has such low rates for car financing that we can literally take out a car loan and put the money in one of their term shares and come out ahead. So I'm thinking about doing that again even though we can pay for the car in cash.
We got 0% on our last car purchase, so we just left our cash in an account and set up automatic payments directly out of that account. That way we could earn interest (even if it's just a little bit) while we paid the car off.
Had a little laugh at this. Same thing happened to us. We were buying a used car from a dealership and my husband asked to split the payment with cash and a credit card (we wanted to get the points). The sales person was really pushing their financing package and saying it was a better rate than our credit card - which I am sure it is. But we had cash for the car and would be paying the credit card off immediately. When my husband explained this the sales person didn't believe that we could pay for the car in cash.
Ooh, you can pay for a car with a credit card? Dang. I wish I'd known that because that could rack up some serious points!
(And we'd have paid it off right away, of course.)
My experience is that you can put part, but not all, of the cost on a credit card, because of the fees that the dealership has to pay to the credit card company.
My sister did it and earned enough to get a companion ticket with southwest for this year. Sweet!
Life is a series of choices. Neal Gabler, under his own admission, made a series of very bad financial decisions. Now, knowing this, has he changed his ways moving forward? IMHO: a resounding NO!
He still chooses to live in super-expensive, The Hamptons, NY in his $1.5million dollar home that has a leaky roof and is in dire need of a $35,000 repair, which he claims he doesn't have the money for. In The Hamptons, anything, especially a home, sells, sells, sells. He could easily and finally sell and relocate to another part of New York State, i.e. upstate NY and buy a beautiful home for $300K cash. There are railway systems that can easily transport him to NYC where he can continue to work at PBS. Then Gabler would have also enough money to replace his 1997 bust-up vehicle that he inherited from his deceased father (with 160,000 miles on it) and he can buy both himself AND his wife new(ish) cars.
Neal Gabler is making money over his Atlantic article, hand over fist.
If you knowingly know your income hasn't improved in twenty years, the first rule of Economics 101 is to lower your overhead. That's something Gabler hasn't done in the past and doesn't look like he'll do in the future. I am certain his recent popularity has caused Gabler to finally earn that $35K and get his roof fixed! And get himself a better car.
God helps those who help themselves.
Neal Gabler is wallowing in self pity all the while he is laughing on to the bank!
(his plight has nothing to do with income inequality, stagnant wages or anything else he wants to blame his troubles on)
Harsh, but good points. Did you find out the particulars of his house/roof/whatnot from other writings of his?
While one can take the train daily, I wouldn't wish taking Amtrak from Albany to NYC daily on anyone.
Do magazine articles work that way? (where you earn more based on page views) I was under the impression that you get paid a flat rate for an article and that that doesn't change if the article does well.
All of the magazines I've written for I was paid a flat rate. It's good exposure that could net him more work, but I doubt he makes more based on clicks.
Yeah, that's how it's worked for me whenever I've written for a publication.
I live and work in the Hamptons. Most houses here are worth under a million, believe it or not. We even have poor people! And not all homes sell immediately. Stop stereotyping my area and making assumptions you know nothing about.
Want to feel like an even bigger misfit? Pay off your house in 5 years and basically have no one to share your exciting news with and when you do share - and NOT in a boastful way - you are met with perplexed looks! The response usually was - why would you do that? Sadly,many people think it's normal to be in debt.
That's fabulous!!!! Congrats!
You share here, and we say WOW! Congratulations!
This is a good reminder to be mindful of how I really think about others and my self. We have always lived on a modest income so that I could stay home with the boys. In fact, I was given paperwork for various welfare-type programs when our middle son was born. Lol! I knew things were tight but I had no idea what the government thought that meant. We didn't need WIC because we also didn't need new furniture or expensive clothes or etc.
I agree with the value in recognizing whatever advantages we are blessed with, we have many, and contend that rare is the person that has none. My father grew up in a trailer park next to where the Indy 500 runs. They shared a bathroom with the rest of the park. He got socks for Christmas every year and barely graduated from high school due to unaddressed dyslexia. What he had was work ethic and an innate talent for fixing cars and he built a successful business out of that...but was broke for decades while building it. Lol! It was truly successful by the time I was in junior high, when he was in his fifties and had already raised 5 sons on very little. My family is full of stories like that AND stories like my brother that had so many advantages but still chose to sell meth out of his business front and steal cars. Seriously. Choices are everything and no matter how you start out you can make good ones or bad ones. Examples like the ones above keep me saving, considering the future carefully and feeling so grateful. Great post, Kristen!!#
This is a wonderful post, Kristen. 2 years ago, we decided to downsize our home for smaller utility bills. We also chose to live in a state that has one of, if not the lowest, property tax in the nation. The only debt we have is a small mortgage that we aren't thrilled about, but I know it is a lot less than the "average", and for that we are happy. I am a SAHM who worked full time until we had our daughter. She is 13 now, and I spent 6 years (on and off) working full time. My being home works out better for us since we do not have the convenience of extended family close by. My husband makes what I would say is below average. We live a normal life. Nothing extravagant, just average. We shop sales, clearance and buy (for the most part) what we need. We are very disciplined with our spending now more so than we were 10 years ago.. I just thought we would be further along with savings at this point in our lives. I even struggled for two hours in Kohls yesterday with whether or not to buy a pair of clearance workout pants for 12.00! I did need them......I have holes in 2 pairs and they need replacing. You would have thought I was using my last 12.00 the way I was stressing about these darn pants! I do, like a lot of people, worry about retirement. My husband and I don't want to be working at a jobs we hate when were 75. I know we just have to continue with the discipline that we practice now, and continue to find other ways of reducing costs and saving money. It's not easy, but it's also not impossible. I could go on and on! I'll bet we could have a great conversation if we were sitting down together over a cup of coffee! (made frugally at home, of course!!!!!)
I just wanted to weigh in on the paying cash for a car thing: greatest feeling in the world. It's why we haven't gotten rid of our adorable clunkers-they're paid for
10 years ago I purchased a 2 year old car. The salesman was entering into his "easy payment plan speech" when I stopped him to say I was paying cash. He had such an amazed look on his face. it was priceless. I had previously made the mistake of taking out a car loan. When I FINALLY made the last payment, I opened a "car fund" dedicated savings account. By the time I needed to purchase a car there was plenty of cash on hand.
PS I have been in food service and retail sales all my working years. Most definitely not a high wage earner.
With divorce, I took the econo car with the 0% loan, leaving all other vehicles with DX. This was a cash for clunkers deal that I convinced DX to go for. The loan was very affordable for me to continue paying (he would have difficulty), gaining additional credit in my returned, maiden name. Fast forward, I had to sell my econo car as driving a manual was hard on my arthritic joints. I paid CASH for a used Prius with 20,000 miles on it. It has been very economical to run, looks great, is PAID FOR.
I am currently downsizing my living expenses further (I have always lived below my means), and intend to drive my car for many years to come. I have just over 50,000 miles on it 30 months later.
How many people are going to get asthma, cancer, and other diseases because of fumes from your clunkers? I am all for fixing and reusing, but sometimes cost to the human health/environment is just too much.
I applaud anyone that is doing their best to get out of debt.
Victoria, I think you missed out on Kristen's grace here to be kind and humble and not make off the wall generalizations.
Thanks Kristen love your blog.
I know and believe that a lot of people live beyond their means, but actually I know very few people who do that. I must live in a bubble. I live in the Midwest so perhaps people are more conservative here. The few who do live beyond their means are soon caught up with and try to change their behavior.
I know a lot of people who live beyond their means, and it's scary to watch. One of my siblings went through bankruptcy and foreclosure a few years ago, and sadly, she and her husband haven't really changed their ways. They are back in debt and I see them making the same choices that previously led them to bankruptcy. It really scares me, but I can't do anything about it.
So well put, Kristen. Thanks for the reminder that part of our ability to live within our means is based on good fortune.
I agree with your thoughts Kristen, and you're so nice about expressing yourself as usual! (I'm curious if you know your Myers-Briggs type?)
Anyhoo, I told my oldest son that he was better off than 50% of Americans because he, at 17, has an emergency fund. I've tried my best to teach my kids sound financial principles. Save for a rainy day because that day WILL come. I also think Americans have to do whatever it takes to keep a health insurance policy, even if means mom has to work part time instead of staying home with kids.
We can debate all day about socialized medicine (and my ex-husband, a Canadian, is convinced that such killed his Grandmother, not to mention the extra taxes paid mean there's no bottom line difference in one's personal finances), about schools not teaching money management (yes, they *should*, in the meantime, parents can teach their own kids, what a concept!), about the Gubmint and policy and all that.
But for me, I would rather focus on that which I CAN control. My favorite comment on that Atlantic article was this one:
"Ctrl+F = budget - term not found on page"
Sums it up for me! We can control what we spend and earn for the most part, barring obvious catastrophes like disability.
Also, to pick on the author a little bit, what screams to me is the fact that he hid the situation from his wife. That reveals a character weakness. He was dishonest and cowardly. (The wife should have also insisted on being in the know, just because she wasn't earning the money doesn't mean she shouldn't have been aware.) Not being able to say "no" to his girls? He's setting them up for future self-discipline problems. Also weakness on his part.
I have had my fair share of bad circumstances in life as well, such as long-term health problems, periods of unemployment, an unwanted divorce, a mate who handled money badly and recently, marrying into my husband's debt.
We got on a strict plan to pay it off, a la Dave Ramsey, and did so last year. Last month we cut a check to Uncle Sam for $23,000 to pay our income taxes (and we have 7 kids!), we were able to do that because we saved every month because we knew the tax man cometh. We made a plan and execute it. It can be done, but it requires saying NO to self and being disciplined, something that isn't extremely popular these days.
We also save to pay cash for cars and (very modest) vacations. Debt is slavery and we're teaching our kids the same.
Yup, I know my Myers-Briggs! I'm an ISFJ, although occasionally I come up as something other than the S, I think. I always come up as an I and a J, though (the J is especially strong).
I agree that he should have told his wife. I'm sure he felt ashamed and vulnerable and I suppose it is possible that his wife would have torn him to shreds if he told her the truth. So I can understand why he may have kept quiet, while at the same time, I think talking about it would have saved him (and her) a lot of misery.
I would wonder two things: what else is he too cowardly to tell me and, second, what about my personality or how I react contributed to his fear of telling me. A marriage should be a safe harbor...
In my marriage, I would try to sit down and exchange financial information with my husband, but he didn't want to know. He was happy for me to carry the burden myself.
I'm sorry that was your situation! In the author's case, it sounded like he didn't even try...I think he used words like, "hid" and "secret".
I agree with you that the wife should have insisted on knowing the state of their finances. My husband and I are currently DINKs, but he makes way more than I do. However, we both are extremely aware of our financial state. I can't imagine not being! And personally, I place as much blame on the wife in this situation as the husband. BUT, I don't want to be in debt and don't really care about keeping up with the Joneses. And neither does my husband. So in that way, we are different from most typical Americans.
I could not agree more with your comment, Carrie. So much so, that I clicked over to your blog to subscribe!
I so agree that people in general just like to point the finger at circumstances out of their control rather than trying to control what you can control.
Thanks so much Sarah! (And Shawn.)
"But for me, I would rather focus on that which I CAN control. My favorite comment on that Atlantic article was this one:
"'Ctrl+F = budget – term not found on page'"
Right on, Carrie -- that stuck out for me as well.
You paid $23000 in taxes and you think taxes are high in Canada?? Sheesh!! I don't know anyone who pays that kind of taxes here AND we get good healthcare. Don't believe all the stories you hear!
I haven't read the article, but I will. Hubby and I made some terrible financial decisions early on in our marriage that caused us much grief. We ended up with two small children and almost losing our home while I was struggling to complete a two year degree to learn a skill that I could use to make a living. It was definitely a low point for us. We declared bankruptcy and changed our spending and living habits overnight. It was a huge hole to pull out of and it caused me much shame, but my kids were little and I felt we had no choice; we literally had no one to help us. I knew we could recover and move on and I vowed we would make drastic changes in our we managed our finances. I got out of school a few months later, and got a job in the nick of time - we were barely making it happen. Today I manage the bills and the accounts with an iron fist, and Hubby chafes under the constraints. And after doing bills yesterday I can see we need to have a come to Jesus talk about the state of our savings. Money is such a double edged sword in our world.
Thanks for sharing this article. At the risk of sounding judgmental, I believe the real problem here is lack of personal responsibility. I grew up in a "pay your bills first" "live below your means" family. Yes, I consider myself lucky in many ways but the bottom line is the everyday choices we all make and sadly many people just make bad ones.
Bobbi, I love your comment. The lack of personal responsibility that can be seen in our world is really troubling to me and this article was just screaming it. Great article as always Kristen, thanks.
I love, love, love this! I get frustrated when people think ANYONE can immediately implement a frugal lifestyle where you save fifty percent of your income. Depending on a person's lot in life, that may not be doable at all. But on the flip side, people use so many excuses not to live a financially conscious lifestyle. Thank you for shedding light on this!
Cough, Mr. Money Mustache, cough. Heh. I think he sometimes forgets that some people really ARE just scraping by, even with careful spending and budgeting.
Thank you for this comment! As a single person working at a non-profit, it would be nearly impossible for me to save 50% of my income. But, I still live frugally which enabled me to buy a home on my own at 27. I'm at a point where I am trying to figure out the next steps to take, but I continue to scrape by.
I really like Mr. Money Mustache for his different perspective. I think he is a great resource for a family/individual who all of a sudden is making great money and needs to be directed away from the "keeping up with the Joneses" temptations... like when you get out of debt and need to figure out what to do with all the money you were throwing at debt!
Yep, I think that's very true. My beef is that he does often come off like he thinks EVERYONE can live like he does, when that's not actually the case. So, for a segment of the population, he is super duper helpful, but that's not true for every segment, you know?
Not for those of us who are chronically ill, at least. We're not lazy because we use a car instead of biking everywhere, or paying someone else to mow our lawn. I really dislike him and hope he loses his smugger than thou attitude some day.
I so agree. I admire what he has done , but for most of us, what he does I don't think applies. he seems to imply that it's easy to just buy and flip houses and therefore make a lot of money. I don't read him often so perhaps I don't really know his perspective that well.
I find those blogs very inspiring however, because they cause me to really rethink my paradigms. So many things we've come to believe are normal, or that we feel entitled to nowadays, aren't normal for most people on the planet, nor were they even our reality as kids!
My husband and I have noted that we both grew up in the HOT, humid south - yet we both lived in houses without air conditioning for a good portion of our childhoods. We endured it! Fans, sprinklers, homemade popsicles, summers sleeping on the front porch...
Our kids have never experienced such. So there's $400 a month (in the summer) that we could save if we decided to downgrade our (high) expectations of physical comfort.
I couldn't love this any more... I haven't read the actual article, but I don't need to. I get the gist.
I've seen the name Dave Ramsey in the comments, and I love him too! We are on an income technically below the state 'poverty' line, and we don't live like we're in poverty. Yes, it takes sacrifice, but we've learned it's much more honorable to be out of debt.
We went from about 6 credit cards and are on our last one to pay off, plus some student loan debt. I say if WE can do it, anyone can!
I found your blog in 2009 when I was trying to get my financial act together. I owed $41k (student loan debt, car debt, credit cards) and I had just learned that my $35k/year salary would be cut due to the recession. It has been a long haul - 7 years- and counting (without a raise!) but I will be out of debt in one more year and I even managed to buy a house along the way. (I will still have a mortgage, just not any consumer or student debt.) And I have several thousand saved in case of emergency.
Like you, I recognize that part of this was pure luck. Although my pay was cut, I stayed employed full-time through the recession. I managed to avoid major medical bills, although I did have some relatively expensive car and home repairs along the way. But I have made choices along the way too. Choices to be intentional with my money, to be content with what I have, and to learn to moderate my desires when it comes to money.
When I announced to my friends that I planned to get (and stay) debt free, I was surprised at how much resistance and hopelessness I was met with. Many of my friends didn't believe I could do it. I was told by several people that being in debt was "the American way," and most of them expect to have to work until they die to service their debt. I think that is very sad.
I don't have a smart phone, I am happy to drive my paid for 13 year old car, and I am pretty happy traveling locally instead of taking exotic vacations. I don't have expensive hobbies, or fancy electronics. (And I don't think there is anything wrong with having any of those things!) But these are the choices I have made. Some folks I know are unwilling to make any "sacrifices" for the sake of their financial health.
Nicely put, Kristen. Folks often cannot understand how frugality can pay off. I have always been frugal in many ways and at almost a couple of decades away from retirement age, I have no debt. I'm using the "opportunity" afforded by a layoff to take a good bit of time off after seven years of no vacation (being a single parent, taking care of my grandmother in her final five years). If I had not been judicious in my spending, I would not be in this situation.
This is so spot on! I had the same feelings regarding the article. On one hand, stagnating wages and circumstances out of our control are not a small part of the equation, but there is also a whole lot of "responsibility to live within your means" involved in it.
I grew up in Europe, where living on credit is not a thing that is considered "normal", so I think I am blessed with a little bit of a different outlook on finances form the get-go... but yes, one can live financially conscious and make smart decisions (even if it seems to be a counter-cultural choice).
Thanks for putting this all into perspective. I share your thoughts.
I admire your humility, Kristen, but I am having a hard time sharing it. This is terrible, terrible, terrible news for our country. Common sense has flown out the window and is leading us into ruin. If the majority are being foolish, eventually the center cannot hold and we are all brought to our knees. The tragic thing is that I truly believe that despite a lot of complexity and systemic problems, America truly offers the most economic opportunity and freedom of any country in the world. And look what we are doing with it! Running ourselves into the ground.
How can we be so ungrateful? How can we take our advantages so for granted? We have access to so much information about poverty and despair all over the world...how can we ignore the unparalleled opportunities we have to do good, to responsibly help others...all for shiny cars and large houses that we fill with stuff? I can't help but wring my hands.
I can have mercy and compassion for one person's story, but the larger picture fills me with anger at the waste it represents. It is not keeping up with the Joneses. It is ignoring, exploiting, and living in complete, inexcusable lack of awareness of the privileged context in which we live. Folly. Shame.
Good points, Alexandra.
I agree wholeheartedly - it's a sad way to live.
Good points, all. One thing you wrote "I can have mercy and compassion for one person’s story, but the larger picture fills me with anger at the waste it represents." makes me feel the opposite, curiously enough.
If I see one person under water, I am inclined to ascribe it to individual decisions (possibly also bad luck, but ill fortune disfavors the badly prepared, just as fortune favors the prepared). However when I see thousands or millions in the same boat, I look for larger scale explanations. One person might have made bad housing loan decisions, but tens of thousands (or more) were taken advantage of by mortgage sellers who damn well knew better. The same, but even more so, for big medical issues that cause such financial distress.
What you're failing to realize is that medical debt is the largest debt and the number one cause of bankruptcy. Our country can never fully move forward economically with healthcare not being a priority, whether it's a single payer system or something else. The current system is failing the citizens of this country. There's a reason people with universal healthcare also tend to be in countries where gross national happiness is higher too.
http://www.theatlantic.com/health/archive/2014/10/why-americans-are-drowning-in-medical-debt/381163/
Although I am not American , I tend to agree with Megyn. Here in Canada I am very grateful for our national health care system. It is not without its faults and problems, but everyone is treated the same, whether rich or poor. I have talked with many Americans in our travels and am shocked at the costs of their plans and high co-pays. I would have been bankrupt long ago with the health problems my family has had.
I don't understand why the U.S. doesn't join most of the rest of the world and introduce a national health care system. Perhaps someone could enlighten me?
My husband and I have been through our ups and downs of medical issues, job loss, and our income has definitely fluctuated because of it. We now have a decent amount of savings, and live in a house that we have been fixing up by DIYing a lot of repairs. I think the best thing we do that seems small but really ads up, is we very rarely eat out. Cooking at home is so much more frugal, and almost always more healthy than going out. Plus going out seems like more of a treat!! =) It shocks me sometimes to see how much people make and how frivolously they spend it all trying to keep up with the Joneses.
I live comfortably on what I bring in, and have no debt whatsoever. I have sufficient retirement savings and an emergency fund in a bank account. One of the big contributors to my ability to live well on a modest income is simple: I rarely eat out, and when I do it is a big treat! I also avoid ordering dessert, appetizers or alcoholic drinks because those really add to the bill. I make coffee, which I love, at home. I do my best to avoid anything that has a monthly charge and I have a land line rather than an expensive smart phone. I've never had a manicure or pedicure and have never wanted one. I bought my car used and paid cash, and I will keep it for years to come. I don't spend money on clothes and usually shop sales. I too am surprised at how much money people spend on personal luxuries, eating out, fancy coffees, cell phone plans, etc. Life is good, and the pleasures of friendships and family bring far greater joy than the possession of things.
Kristen, this is a great (kind) response! It is so true that our financial situations are a result of both our own taking of responsibilty and also the blessings God has given us.
I don't think we have to address income inequality in this country, but rather erroneous mindsets. Too many people are ignorant of Dave Ramsey style financial principles, and too many people think many (expensive) things are an inevitable part of life.
First off, I want to say, I absolutely love your blog! With that being said, wonderful post!. It all comes down to living within your means, which I think is sadly something in the past. I guess we can blame the "American way" spend, spend & spend more. Every where you look there are ads to buy this and upgrade that. My husband and I have even feel to this outlook:(. But I had decided the beginning of this year, No more! It is just not worth it and I truly am not worried what people think if I don't have the latest and greatest. At least I can go to bed and night and sleep and not worry about how I am going to pay for STUFF! There is much more to life.
In this article there were no outside forces at play - a catastrophic illness, unexpected job loss etc that forced him into his current financial state. He chose to live so far beyond his means in the name of his children's welfare? That seems so sadly backwards to me. I don't believe it turns those kids into better adults because they lived in the hampton's and went to private school at the cost of their parent's financial stability. They will probably resent their parents for it later when they need to support them in retirement.
I'm glad you wrote about this article! My husband and I read it last week and found ourselves even more inspired to keep living within our means. We've only been married a little over a year and a half, but we decided right out the gate that we wanted to take the FPU class by Dave Ramsay and become debt free as soon as we could. (We just hit that goal in February of this year - $26,000 in 1 year 5 months. Woohoo! :))
I have to say, It can be REALLY tough sometimes. "Keeping up with the Jones'" can seem really appealing at times. Most of our friends are buying homes and cars and starting their families while we are most likely looking at a few more years of apartment living with our little dog while we build a financial foundation.
It's great to hear your encouragement to be humble in our view of others and to be hopeful for ourselves! Thanks so much! 🙂
Your post resonates with me, Natalie! We also paid off our debt and it is such a liberating experience. I managed my finances VERY BADLY in my early 20s and paid for it for the rest of the decade. Now, I am much more wiser and more frugal than ever. Not cheap, just frugal. My husband now has a job he loves but he is exposed to a CEO that has a very extravagant and wasteful lifestyle (He flies every other week coast to coast, First Class or business class and charges it to the company, flashes his Rolex watch, buys expensive wine and dinners for the employees, etc). It is becoming infectious. I try to remind my husband that a lot of this is not HIS money, but the company's. For all we know he is in debt, on the verge of bankruptcy, and needs this company to take off so he can save his hide from going further into debt (or it could be fantastic for all we know) On the other hand, my husbands boss makes almost twice his salary and is Frugal (shops at Aldi, makes his own bread and snacks, brings his lunch, paid off his house in 10 years, bought a car for his wife in cash and never "upgraded" to a larger house and is easily able to afford his children's extracurricular activities) I tell my husband he is my kindred spirit... I am so glad there is someone out there other than me that my husband can see is successful and frugal out there. We decided for me to stay home with our kids. We bought a house way less than what the banks said we could "afford" and paid off our cars. I remind my husband often that he is lucky he didn't marry a spendthrift wife because we would never have made it through his months of unemployment or when he took a job at half his previous salary. Then once in a while I see our peers with their Audi's, BMWs, Mercedes or huge houses and professionally manicured lawns and it is hard not to have a twinge of jealousy. But then I step back and remember to be thankful for what we have because so far life has been kind to us!
Hi Josephine! I only just now saw your reply to my comment... It must be so challenging for your husband to live contentedly with his CEO living so lavishly right in front of him. (As much as I love travel, flying from coast to coast weekly!? No thanks.) It's great that you have been able to stay the course despite the in-your-face opulence. Sometimes I wonder, though, if people who show off like that are even happy with their finances. It seems to be a symptom of deep insecurity and unhappiness to me. Would you agree?
Haven't read the Atlantic article -- but your thoughtful reply, and your those of your readers is time well-spent! Thank you!
I had read this article, and I really like Kristen's take on it. The comments here have been good, too!
My husband and I made a ton of money mistakes, mostly because of burying our heads in the sand about the reality that was our income. We didn't go out to eat, buy fancy cars or nice houses -- we drove his late mother's old car, lived in an old singlewide trailer, wore second hand clothes and I made scratch meals and homemade bread because we made poverty level wages. But -- my husband was raised to believe that one always should have plenty of spending money in his pocket, and I would often give in to avoid the fights, then scramble to pay bills on time, and I had a problem with being so careful with spending for a long time, then suddenly making a terrible impulse purchase. We've matured since then, but the author's story gave me some chilling memories of panic, anger and anxiety over money issues, and the times of feeling hopeless about getting out of the hole. We are not in a hole now, but health and the recession put a hurting on us, so we continue to be tight. My husband and I were so money ignorant when we started out-- if we'd made a good salary, I'll bet we would have made the same mistakes as Gabler and consistently spent more than we earned. Both sets of our parents were married during the depression, and funnily enough, the ONLY financial advice either of us got while growing up was to avoid the stock market like the plague. Financial education is truly needed, at home and in school. Kudos to people like Kristen who are helping to teach it through blogs, too!
I like my modest house a LOT. And my modest car.
Funny story:
My husband is a medical resident (so, training salary, not doctor salary). We have a personalized doctor license plate. One of my friends saw the car at the dentist office and goes "What a modest car for a doctor!" YUP! 13 years old, paid off, nice dent in the front, one light held on with a zip tie (for which the mechanic complimented me, told me it'd cost $100 to fix for real, and was totally cool when I said no, I'd replace the 10 cent zip tie as needed).
Why would I replace my car? It still goes!
I'll eat my beans in a tortilla from Aldi, drink my homemade coffee, but please don't ask me to give up my fancy hair cuts and manicures. They're important to me, and that's the one expensive thing I choose. Everything else, whatevs. (Including my one fancy summer dress, so friends will see it a lot this summer. I'll wash it in between. I'm not buying a second one.)
You do you, I'll do me, k? 🙂
Totally. We all have areas where we splurge and where we save. I'd fix the light and skip the manicure, but that's not a nobler choice than the one you're making! It's just different.
No, No... I'm glad you took the time to share your thoughts on this topic and you are spot on. For so many years I didn't get it and I was miserable with all of life. Now, I'm proud to say I get it and am blessed in so many ways. Thank you for sharing...
This is my first post here. My husband and I struggle paycheck to paycheck and it's beyond stressful. Even with working for a health insurance company, my out of pocket costs after they take $85/pay period every 2 weeks, we still have a $6500 deductible before it pays anything other than preventive care. I have serious health issues and we can't even begin to pay the medical bills that have been sent to collections.
Aside from the medical bill issues, I had to take a new job in 8/2014 that hit me with a 35% cut in pay. My husband has no income because of disability and can't work. He won't qualify for social security until next February.
Once the bills are paid there is $300 left a month to pay for doctor visits if needed, prescriptions, gas for the car and food. We might eat out for $15 once a month. I do have a car loan because I obtained the car before I had to change jobs in mid-2014 and it's our only vehicle. The loan is still upside down so I can't sell it and make anything to purchase towards a new car. I have internet and a cell phone because they are required for my job, I work from home, and that monthly cost is not reimbursable. I wish I had a way out so that there was enough money each month to at least pay something towards our medical bill debt but it's isn't even an option at this point. Add to that issue, I have to claim more dependents than I have on taxes so that I have enough income each paycheck to meet the essentials. We have looked everywhere to find cheaper housing (we rent).. .unless I want to live where there is nonstop crime and drive-by shootings daily, I can't find a cheaper apartment.
I wish I knew a way out. I can't work more than the one full time job I have but it's not possible due to my hours and health problems that have me in bed an hour after I end my shift.
If anyone has any input, that would be very helpful. Thanks!
I am so sorry that things are really rough for you guys. Hopefully some of my readers will have ideas for you.
Will things improve a bit next February when you get some social security income? Are there any public assistance/church programs that could help you guys?
This is a small thing, but have you looked into Ting wireless? https://www.thefrugalgirl.com/2014/02/lower-smartphone-bill-21month/ If you're mostly at home, you can use wifi for your phone usage, and then just use cellular data when you're out and about. Maybe that could save you a bit?
Is there a way to cut any of your other bills? Could you shop around for cheaper car insurance? Could you use Ooma instead of a home phone (if you have one)?
This is another small beans idea, but could your husband do some online things like Swagbucks? http://www.swagbucks.com/refer/TheFrugalGirl
Is there a way to move to another area? If you work from home, would re-locating to an area with a cheaper cost of living be feasible?
Check into Snagshout for things you need, you receive items at a discount in exchange for an honest Amazon review. I pay for it using Amazon gift cards earned from Swagbucks 🙂
Just want to sing the praises of Ting! I first heard about Ting from your website. I was a Verizon customer with 2 phone lines (one for me and one for my DD#1). I had been thinking of changing to Ting forever but was struggling with the idea that the service wouldn't be as good. Well, time for DD#2 to get a phone and I just couldn't bring myself to give Verizon one more cent for what I consider an already staggering bill for, of all things, a cell phone! So, finally made the leap to Ting a month ago. 3 lines and first month's bill was only $51 and don't anticipate our bill to be much over that very often. Kicking myself that I didn't make the change sooner! Love putting the extra savings into my own pocket!
Oh my goodness! I will be looking into Ting posthaste! Thanks for the reminder!
Be sure to keep receipts for every medical expenditure---if your income is low enough, you can take a tax write-off on medical expenses. Two years ago I got a catastrophic illness that cost us literally tens of thousands beyond insurance and for two years we have been able to reduce our tax bill---not as good as not spending the money to start with but still something...(Wasn't until this happened that I learned that if one hospital sends you by ambulance to another hospital that is equipped to handle your emergency, that insurance can refuse to cover it! We had to pay $3000 to cover an ambulance trip because insurance said my husband should have checked me out of one emergency room and driven me 200 miles to a trauma hospital, instead of letting me go in an ambulance. I had an open wound in my belly and my intestines were literally being held in by gauze and they felt an ambulance was "unnecessary.")
We got a $1500 ambulance bill last year for a one mile ride. =O Mr. FG was out of town and he had no choice but to take an ambulance because no one else could drive him. Insurance paid nothing!
I'm so sorry about what happened to you.
I work for an insurance company. You need to appeal the bill with copies of medical records showing the proof that you needed to be transported by ambulance. They will cover it.
I hope you're completely healed and feeling much better.
Thank you for the information on Ting. I didn't have a lot of time to look at the information on it other than reading your article. I am going to do more research on it over the weekend and then probably make the change. Thank you for this.
We aren't willing to move from our local area because of wanting to be close to family and grandchildren. There is no place cheaper to live in the area. I had searched consistently every week for a cheaper apartment. I am unable to climb stairs, so living in a cheaper apartment that isn't in a very dangerous area doesn't come cheaper than we pay. I shouldn't complain too much about our rental costs, it has just frustrated me that the apartment isn't in better condition and our rent was just raised $40 a month starting this month. It is the first time it has been raised since we moved in 5 years ago.
We don't pay for a personal home phone service. My company supplies the phone and a rotor for access to a VPN, however that is only for work. I just have to keep the active internet.
My husband at 61, is not computer literate, to say the least. I do complete surveys almost all day on my days off and for an hour or so in the evening to make about $25 a week so that we have the extra few dollars to put towards groceries.
Thank you for your input, it was very helpful.
I am glad I read this, it explains a lot to me about that kind of mind-set. My (now ex-) husband was constantly fighting with me about getting credit cards, buying things we didn't need, and budgeting in general. It was a constant battle for us to just pay the bills since he spent so much. Since he left us and I became the income for my family we have been able to pay all our bills each month, set some aside and live within our means because of budgeting and watching what we buy (and the grace of God no major emergencies have come our way).
It's not always the easiest to live within your means, but when something happens and you don't have the stress of not having the money to pay for it, it makes it all worth it. I am always looking for new ways to do-it-myself or save money, thank you Kristen for sharing your story of making it work and how working at it does yield results, some days it's easy to get discouraged.
Idid not read the article but liked your take on it. We live well but frugally. I may shop 3 stores to get good prices but we will spend money on thing we consider important. I refuse to totally give up my books & my husband loves his cable. We rarely ea tout & I cook totally from scratch. We have weather serious illnesses, major unemployment. but manged by God's grace to be solvent. Of my 3 kids 2 are good at money management & 1 is horrible . I did teach them how to deal with money but each is an adult who makes their own choices. All are not as lucky or even intelligent enough to realize the money wasted on interested. I let God judge
Is it bad that I only got halfway through, and then remembered something I wanted to go buy with my credit card rewards? 🙂
Oh and ps, I meant after reading the Atlantic article, not reading YOUR blog. 🙂
I went to the ER two years ago and the bill was $3000 and I did not stay overnight! Yikes!
What gives me hope we will get out of this mess is the amount of frugal-living and personal finance blogs that are out there. Debt like this is a relatively new phenomenon. My parents went to school for 10+ years each and never incurred any debt. I am in my thirties and still paying off my debt and I had tuition remission.I never received any education on how to manage my finances. I got spending money and worked jobs, but I didn't have to pay bills until I got out of college. I think until you have a wake up call, such as a medical emergency, most people don't think they need anything more than to pay the bills. We've always lived within our means, but we were also young newlyweds who never considered an emergency would happen to us. My husband and I are both very in the moment people, so saving for something that is years away is very difficult for us.
What a balanced and fair response to the article 🙂
I do think there are some excellent points in his article. Wage stagnation and inflation are very real. I am always surprised that our income does not easily afford us those things I consider to be hallmarks of a middle class lifestyle: paying for kid's college, vacations twice a year, a single family home. We just can't do all of those things and we make a very good living. So we choose. Small condominium, vacations when we have unexpected extra income, pay for some but definitely not all of college. You can't have it all nor do you need to have it all 🙂
I am certainly guilty of always having an internal battle between saving/cooking at home/not buying anything and wanting to spend/live for "now"/go beyond my means.
I know that I earn a good income for someone who's 29, very average middle class, but single so far so every dollar is still accounted for. I have to remind myself when I'm giving up something that in the long run, it is for a good cause: paying off student loans, paying the mortgage, paying the car payment. I'm making headway in all of those and in 3-4 years only the mortgage will remain.
One thing that is tough is lifestyle inflation, especially in your 20's when you start earning decent money and can afford all the "stuff" you couldn't when you were younger, in college, etc. I do regret the first 3 years of working full time after college earning a decent living when I made a lot of bad decisions, not thinking about the future and buying all sorts of stuff I didn't need, eating out, going out. After being on a budget through college, it was a free for all for the first few years of my career and I'm ashamed that I could have been working much harder on getting rid of the student loans right away. But I don't think I will make those mistakes again.
It doesn't make it any less hard when you have to say no to activities or outings with friends, or when you can't get the latest 'fit bit' or whatever new gadget every one has. But then I remind myself that at the end of each month I have paid almost $1000 of debt back so that keeps me motivated.
This article hits real close to home. When the economy went bad, I stumbled every day trying to keep up my lifestyle. Silly me fought and fought until one day I had a profound thought, I decided to just start over. My circumstances included a death, job loss and a good mortgage but a house with no value. There were no credit consequences as the mortgage was in the dead husbands name. Sadly most people did not have the opportunities that I did. I moved into a two bedroom duplex with my children and decided I would sit for a year and regroup. At that time I did not know what I would do but it would be necessary to not be indulgent. I sent a daughter off to college. I bought a house at a tax action and gambled it would be mine at the end of a year waiting period. I found a new job. I took a 80% pay cut. I bought a car with cash. We lived off our coupon stockpile. I made it out of the worse time of my life. It all came down to choices. I gave up the huge house for a smaller one that was 6 yrs old. I found happiness. All the stress was gone. I have always been frugal but this was a bigger deal than I could have imagined. life is beautiful. Most people consider my income to be at poverty level but we have everything we need. The house and car are paid for. We have a republic phones for 10.00 a month and no cable. We use internet for Roku's, schooling and some couponing. We have nice things and most of it comes from thrift stores. I am going back to school for a new career and the state lottery system pays for it. ( I have gotten a little to old to work in my former field). People always ask me how I did it. I am always willing to help others but I run into one main problem. No one wants to give up their luxury items. Beer, cigarettes, soda, fast food, expensive cellphones, cable, various rental payments and simply spending more than they have. When I suggest they give up the above list, they act like I want them to cut their arms off. The house I bought at auction was foreclosed on and abandoned. The payment of the former owner was 375.00 a month. They chose to keep those cellphones, satellite dish and furniture rental payments over their home. I know this because they left all their records in the house. I cried when I realized who the former owners were. They are living in the same two bedroom I lived in when I was regrouping. All 5 of them. I know another family who has not had heat for several years now. Their car is now totaled. They have no bills but utilities and groceries. They make more than me every month but continue to blow their money than take care of business. It saddens me to see people suffer. Yet, they have chosen to do so. Please excuse my writing, I am about to have eye surgery and struggle to type.I make 12,000.00 a year. Life is uncomplicated and I have no stress. I wish I had walked away from my 1300.00 mortgage 3 yr's earlier. ( And, I even have money in the bank )
Thank you for noting the blessings of good health and not having experienced disaster (house fire, bad car accident, etc) as critical factors in staying above water. alzheimer's care, several years ago, cost $8k per month. My sister's difficult pregnancy, and subsequent care/therapy for my micro preemie nephew was hundreds of thousands of dollars. Fortunately there was insurance in noth cases, but it was still a tremendous financial burden. Happy post-script: said micro preemie is healthy, strong, and has thoroughly enjoyed this year in kindergarten.
I love all of the paid cash for cars stories!
Here's another one- my husband and I went to a local dealership several years ago and explained to them that they had a car we would like to buy and we would be paying cash. No financing,no loans,just cash and that was our limit to purchase said car. The salesman was perplexed and insisted that we should finance in order to buy a more expensive car. This speech went on for several minutes and my husband politely said that we just wanted to pay cash. After 30 mins of this back and forth silliness we quietly got up and walked out of the dealership with the salesman running after us and screaming that we were weird and all normal people had debt. It was one of the most bizarre but hilarious moments - we still laugh about it 20 years later!
Good heavens. That is NOT how to successfully sell a car. Ha.
I am comfortably middle class. Mortgage only debt, able to set aside money in retirement, savings, and a college fund for the kids, pay my bills on time, and still have "fun money." I attribute a LOT of it to having had frugal parents who made consumerism a regular topic of conversation. Smart consumerism and financial management were always topics of conversation in our house. They were open about why we bought this but not that, or why they made the financial choices they did. They talked openly about paying taxes, balancing a checking account, about why they chose not to have credit cards, and about how you pay your bills and set aside savings before you have your fun. They stressed that we must always find ways to contribute to our church and to the less fortunate. They didn't shy away from talking about sacrifices we had to make when WE were the "less fortunate" ones. The point is - you cannot wait until you are an adult to learn about good financial management. We must teach our children from young on so that once they become adults, they are prepared to make wise choices right from the get-go.
Took me tiny bits and pieces of four hours but have read all of this. Best thing on the interwebs today. Thank you, everyone.
You put it all so well and I agree with every single word. I need to be more like you said, humble and forgiving of others and understanding that we are NOT all in the same boat. In fact we can be in very drastically different boats, sinking or swimming with no life guards around!. I do find it so easy to save money, not spend much when I do spend and live frugally while others struggle and I need to chill and not wave that shaming finger at others. You are right, so thank you for reminding me.
I understand! I need to remind myself too. 🙂
I don't really know exactly how much money my husband make.......
Strange for American normal for latinos. I know in general,but he has internet banking and i have use of a credit card and a debit card. I write down how much i spend, but i never see a bank statement. I ask him sometimes about thing like retirement funding and college fund. He tell me it's under control and i believe him. He is not secretive but he is macho and want to protect me from what he see has man problem. When we got married ,he told me he got a insurance,in case he died ,i would get 90% of his income for the rest of my life.
We have kids in private schools because the school are bad. We have no mortgage,paid the house cash,half his dad,half my dad. Also a normal thing for middle class family in our country.
But my daughters are of a new generation where getting married doesn't mean you stop working.
We never borrow money for anything.
I've been thinking about this a lot over the last few days. And here's where I am. We pay approximately $2000 a month in daycare for our two children. A month with five Fridays is $2500. Our mortgage is $1100 a month, so daycare is a significant portion of our take home pay - like 30%. Luckily, we can afford it, but with very little wiggle room. This makes it so hard to save money (which we try and do). But things still end up on a credit card. And I've decided not to beat myself up about this. Because being a working mom with a working dad (who is also a full time college student) with two kids under five is hard. And I'm doing the very best that I can, and that is enough. This situation won't last forever, and we've always been financially responsible before. As we remind ourselves not to judge others, we can also be kind to ourselves without letting ourselves off the hook.
Yes. I think giving grace to ourselves goes hand in hand with giving grace to other people.
Sometimes people get a wake up call on their finances. I was living the typical American lifestyle until a divorce and severe medical issues woke me up. I'm a single mom with 2 kids, massive medical debt, and a full-time job. I am the working poor. I make just enough to cover my expenses but I was gifted with growing up with grandparents that lived through the Great Depression. I was more prepared to handle the financial struggle than many people. But a lot of it is a mindset because if you really want to do something, then you will find a way to do it. It has taken me 3 years to get where I have a small amount of breathing room with each paycheck. Everyone has a different situation so they must examine all possibilities to get out of the situation.
Meeghan- yes, sometimes being/doing/having enough is clearly the right path. I think that the word "enough" gives us room to breathe. By saying that we don't have to be the best or have the most, we can be content with enough. I'm good with that.
Sophie- i love that line about comparing oneself to others. Putting on a facade to seem like they have the world in their hands.....I have a relative just like that. What a shame that they feel they are nothing if they don't have the material possessions that others have.
CityMom- I don't know why my relative compares the family to others but i think you're on to something when you mention embarrassment. Maybe with the education they have and their ages, not seeming like they belong to the top 2% of high income earners may have a lot to do with it. Hhhmmmm Seems like a waste of mental energy to me.
I have had to do things very creatively in order to get what we needed. We've had major medical issues and are getting by with creativity, hard work and lots of effort. For example, to save money, I had to quit my FT job. By doing that, I don't drive as much and it saves on gas. I also have time to cook from scratch and wear simple clothes that don't require dry cleaning anymore. And honestly. it's ok. We understand our situation and are just thankful to have what we have, be able to do what we can and appreciate those people in our lives.
I LOVE these sentences!
"So, it’s important to check our own attitudes and worry about ourselves rather than others.
And along those same lines, it’s important to acknowledge the privileges we each have, which we deserve no credit for. That goes a long way toward helping our attitude toward others be a bit more humble."
In my experience, people (including me sometimes) forget how important those two ideas are! Thank you!
I appreciate a balanced approach to the article as well. " There for the grace of God go I. "
Isn't that the saying?
I agree there are circumstances out of our control. But there is also this ridiculous spending that happens in our culture on credit- living paycheck to paycheck because of our choices. I was horrible. I used the" I work hard, I deserve this and that and I deserve to go to out to dinner" attitude and justification.
I know for us we were normal and spent. (Ok I spent- my husband was always good with money). We just looked at car debt , school debt, house debt as normal. After all we could make the payments.
Then we found Dave Ramsey and climbed our way out of debt including our home. It took 9.7 years.
And only happened after I hit the wall and was in a potential bad job loss situation and realized - I had worked for 20 years with nothing to show for it but debt. ( my hubby is a stay at home dad). I prayed Lord help me find a job and I will never be in this situation again.
We now teach financial peace ( Dave Ramsey's class) to give back to others tare in the situation we were in. We don't make any money teaching his class. It just keeps us honest.
Glad you wrote this post.
If you are Where we were - check out Dave Ramsey's principles. If you follow them it works. It's not easy. But look at what Kristen does with/for her family? And I would say they are blessed by her efforts and it can be done.
Thanks for being an inspiration Kristen.