Author Topic: PBS show on how impossible living on 38k/yr is  (Read 15390 times)

Mr Mark

  • Handlebar Stache
  • *****
  • Posts: 1181
  • Location: Planet Earth
  • Achieved Financial Independence summer 2014. RE'18
PBS show on how impossible living on 38k/yr is
« on: July 26, 2012, 07:59:08 PM »
Tomorrow evening PBS apparently has a special report on a family struggling to survive on 38k per year.

I predict an abject lesson in the effects of a family who have spiraled into a (collective noun request) of anti-mustashian lifestyle choices...

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28126
  • Age: -999
  • Location: Seattle, WA
Re: PBS show on how impossible living on 38k/yr is
« Reply #1 on: July 26, 2012, 08:15:59 PM »
$10 says they have a car payment.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Taffy

  • 5 O'Clock Shadow
  • *
  • Posts: 49
  • Location: Chester, UK
Re: PBS show on how impossible living on 38k/yr is
« Reply #2 on: July 26, 2012, 08:42:37 PM »
I predict an abject lesson in the effects of a family who have spiraled into a facepunch of anti-mustashian lifestyle choices...

gooki

  • Handlebar Stache
  • *****
  • Posts: 2393
  • Location: NZ
Re: PBS show on how impossible living on 38k/yr is
« Reply #3 on: July 26, 2012, 08:59:19 PM »
$50 say's they have cellphones.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28126
  • Age: -999
  • Location: Seattle, WA
Re: PBS show on how impossible living on 38k/yr is
« Reply #4 on: July 26, 2012, 09:56:06 PM »
$50 say's they have cellphones.

Double or nothing that cell phone bill is higher per month than your bet.

We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Mr Mark

  • Handlebar Stache
  • *****
  • Posts: 1181
  • Location: Planet Earth
  • Achieved Financial Independence summer 2014. RE'18
Re: PBS show on how impossible living on 38k/yr is
« Reply #5 on: July 26, 2012, 10:10:20 PM »
Oh, they even have delinquent CC debt. And car payments, cheque cashing fees... they spend more on the car than they do on rent and food combined.

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: PBS show on how impossible living on 38k/yr is
« Reply #6 on: July 27, 2012, 01:04:14 AM »
$50 say's they have cellphones.

And monthly plans, rather than pay-as-you-go.  Mine runs me under $10/month (OK, I don't talk on the phone a lot), while the land line was over $30.

gooki

  • Handlebar Stache
  • *****
  • Posts: 2393
  • Location: NZ
Re: PBS show on how impossible living on 38k/yr is
« Reply #7 on: July 27, 2012, 01:50:26 AM »
Oh, they even have delinquent CC debt. And car payments, cheque cashing fees... they spend more on the car than they do on rent and food combined.

Did they have a need to own a car?

velocistar237

  • Handlebar Stache
  • *****
  • Posts: 1422
  • Location: Metro Boston
Re: PBS show on how impossible living on 38k/yr is
« Reply #8 on: July 27, 2012, 06:42:59 AM »
Is this it?

They have a car and a cat. Note that they are in Newark, so $38K/year might not stretch quite as far (I didn't actually see the $38K figure anywhere).

From the teaser video:

"The fact is that what's a necessity and what's really a luxury is a pretty grey area, and everybody needs a certain amount of creature comfort in their life."
- Rachel Schneider, Vice President at the Center for Financial Services Innovation and a lead investigator for the U.S. Financial Diaries Project

There's some truth there, but anybody can get their creature comforts for almost free.

grantmeaname

  • Magnum Stache
  • ******
  • Posts: 4836
  • Age: 27
  • Location: NYC
  • Cast me away from yesterday's things
Re: PBS show on how impossible living on 38k/yr is
« Reply #9 on: July 27, 2012, 06:51:53 AM »
They have more than 43% of Americans, and slightly more than the median Newark household's income, so I'm puzzled how it's 'not enough to live on'. Clearly it's enough to get by on, because most people do get by on it.

I guess it's being framed as 'not enough' to comfort the hordes that spend beyond their means?

SweetTPi

  • Stubble
  • **
  • Posts: 127
  • Age: 35
  • Location: The South, USA
Re: PBS show on how impossible living on 38k/yr is
« Reply #10 on: July 27, 2012, 07:53:11 AM »
On one hand, I have a similar response as you all, but on the other hand, I can't help but think "At least it's 38k/yr and not 138k/yr". 

grantmeaname

  • Magnum Stache
  • ******
  • Posts: 4836
  • Age: 27
  • Location: NYC
  • Cast me away from yesterday's things
Re: PBS show on how impossible living on 38k/yr is
« Reply #11 on: July 27, 2012, 08:02:25 AM »
138k/yr
We get those articles in every country, about once a month each: Canada, Australia, the UnitedStates of America.

I'm waiting for the one in Manila or Kabul. "Can't retire on $60 a month?"

SweetTPi

  • Stubble
  • **
  • Posts: 127
  • Age: 35
  • Location: The South, USA
Re: PBS show on how impossible living on 38k/yr is
« Reply #12 on: July 27, 2012, 11:22:53 AM »
138k/yr
We get those articles in every country, about once a month each: Canada, Australia, the UnitedStates of America.

I know, which is why i said that.  I'm much more sympathetic to 37k where bad choices, money skills, and circumstances can have a much larger impact.  All in all, it just generates less of an urge to give a good hard smack upside the head.

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: PBS show on how impossible living on 38k/yr is
« Reply #13 on: July 27, 2012, 12:45:15 PM »
Did they have a need to own a car?

Lots of people need to own a car.  Almost no one needs to have car payments.  If you can't buy the car you want for cash, you need to look for something cheaper.

menorman

  • Stubble
  • **
  • Posts: 178
  • Location: SoCal
    • Marven's Money Musings
Re: PBS show on how impossible living on 38k/yr is
« Reply #14 on: July 27, 2012, 01:28:26 PM »
Did they have a need to own a car?

Lots of people need to own a car.  Almost no one needs to have car payments.  If you can't buy the car you want for cash, you need to look for something cheaper.
This is rather true. Even MMM believes that everyone needs to have a car, it just should be reserved for times when not driving it truly is not an option and that one should structure life to not need it as much as possible.

As for commenting on the original article, it's very possible that they could definitely be running into problems w/ a decent sized family (4+ ppl) after taxes are considered. With that in mind, taxes are more than what disappears out of the paycheck. While LenPenzo suggests that $40k/year is a decently livable sum, those who have prior commitments can find themselves in quite a pickle in short order. Still, education is what they would benefit from far more than more money.

strider3700

  • Pencil Stache
  • ****
  • Posts: 516
  • Location: northern BC
Re: PBS show on how impossible living on 38k/yr is
« Reply #15 on: July 27, 2012, 03:14:10 PM »
part way in they give a financial breakdown

1160 unemployement
1640 salary
115 food stamps   

total income 2915 monthly.

major expenses listed are
405 rent
315 food
40 laundry
734 car expenses  !WTF  really?
658 student loans,credit debt and hospital bills

later they start listing other expenses
$165 parking        - paying to park a car they can't afford...
$42 cheque cashing fee  - anyone able to tell me what this is? 
$280 cable,phone/internet  ! holy crap
$181 gym, shoes, entertainment
$50 cat food/litter
$30 loan for medication
$1.50 coffee
$1.50 card
$2 lottery ticket

leaving them with $10 left over.

Now I'm skimming the video without sound  so I don't know how far his commute is but I'd seriously be thinking about cancelling that gym membership and biking/running to work after selling that car.  Bam instant $1179 saved.  Also dump the majority of that cable bill. it should be half that at least.  so lets put the savings at $1320/month.   Now go to a bank and get an account to put your cheques in.  maybe they'll get some service fees. $10 a month?  probably a lot less if they bank in person put their cheques in and take cash out.   so another $32 saved.  $1352 now payback that medication loan and start putting the extra against that lumped together credit/student loan/hospital bill.   

and there we go money problems fixed.    Most won't be willing to give up anything though....  They'll think cutting the lottery ticket and coffee was a big thing.

velocistar237

  • Handlebar Stache
  • *****
  • Posts: 1422
  • Location: Metro Boston
Re: PBS show on how impossible living on 38k/yr is
« Reply #16 on: July 27, 2012, 06:55:37 PM »
The mother drives a late model Honda Accord. It's probably underwater.

Mr Mark

  • Handlebar Stache
  • *****
  • Posts: 1181
  • Location: Planet Earth
  • Achieved Financial Independence summer 2014. RE'18
Re: PBS show on how impossible living on 38k/yr is
« Reply #17 on: July 27, 2012, 07:03:41 PM »
part way in they give a financial breakdown

1160 unemployement
1640 salary
115 food stamps   

total income 2915 monthly.

major expenses listed are
405 rent
315 food
40 laundry
734 car expenses  !WTF  really?
658 student loans,credit debt and hospital bills

later they start listing other expenses
$165 parking        - paying to park a car they can't afford...
$42 cheque cashing fee  - anyone able to tell me what this is? 
$280 cable,phone/internet  ! holy crap
$181 gym, shoes, entertainment
$50 cat food/litter
$30 loan for medication
$1.50 coffee
$1.50 card
$2 lottery ticket

leaving them with $10 left over.

Now I'm skimming the video without sound  so I don't know how far his commute is but I'd seriously be thinking about cancelling that gym membership and biking/running to work after selling that car.  Bam instant $1179 saved.  Also dump the majority of that cable bill. it should be half that at least.  so lets put the savings at $1320/month.   Now go to a bank and get an account to put your cheques in.  maybe they'll get some service fees. $10 a month?  probably a lot less if they bank in person put their cheques in and take cash out.   so another $32 saved.  $1352 now payback that medication loan and start putting the extra against that lumped together credit/student loan/hospital bill.   

and there we go money problems fixed.    Most won't be willing to give up anything though....  They'll think cutting the lottery ticket and coffee was a big thing.

So basically, the unemployment benefit is being used to pay for a car and a cat. And otherwise you can scrape by a family of 3 with a minimum wage job.

MooreBonds

  • Stubble
  • **
  • Posts: 193
  • Age: 43
  • Location: St. Louis, MO
Re: PBS show on how impossible living on 38k/yr is
« Reply #18 on: July 28, 2012, 03:43:01 PM »
part way in they give a financial breakdown

1160 unemployement
1640 salary
115 food stamps   

total income 2915 monthly.

major expenses listed are
405 rent
315 food
40 laundry
734 car expenses  !WTF  really?
658 student loans,credit debt and hospital bills

later they start listing other expenses
$165 parking        - paying to park a car they can't afford...
$42 cheque cashing fee  - anyone able to tell me what this is? 
$280 cable,phone/internet  ! holy crap
$181 gym, shoes, entertainment
$50 cat food/litter
$30 loan for medication
$1.50 coffee
$1.50 card
$2 lottery ticket

leaving them with $10 left over.

From the PBS website:
Quote
   
Hard choices

One family in Newark, N.J. keeps a monthly financial diary of expenditures, which demonstrates the difficult choices made each day by Americans living on the outskirts of the mainstream financial system.

It's kind of like my question regarding people who are in the dating world, and consider their pet to be a 'non-negotiable' for whatever reasons. They don't care if their significant other is allergic to no end...that pet will be the last thing to go (including after the significant other) that they would ever give up.

But the sad thing is that when it comes to consumerism, you can substitute waaaaay too many things in our country for the pet above for people that don't even consider that they can live without something, whether it's a cat, cable, or whatever.

As others on the board have pointed out, it's not really a difficult situation that the family finds themselves in at all - people usually create their own 'difficulties' for themselves. And despite keeping their detailed spending logs, they still probably have the attitude of "Pffft - it's JUST a $3 fee to cash my check. That's not holding me down and keeping me poor." The truth of the matter is that they are correct - just a single $3 fee to cash a check is not what's making things difficult. It's the attitude of "_____ is just $2/$3/$6/$10", which will forever shackle them in the bottom quartile of financial net worth (and I'll bet that  the PBS correspondent won't bother pointing that out to them because PBS doesn't truly care about them).

So for those that watched the episode, what was PBS's conclusion/wrap-up? My guess is that rather than empowering the family to take ownership of their lives and showing them how they can become financially free, I'm thinking they spun it that they 'need their unemployment compensation for ____ more months - just look at how they aren't making ends meet '.

Jamesqf

  • Magnum Stache
  • ******
  • Posts: 4047
Re: PBS show on how impossible living on 38k/yr is
« Reply #19 on: July 28, 2012, 11:12:59 PM »
It's kind of like my question regarding people who are in the dating world, and consider their pet to be a 'non-negotiable' for whatever reasons. They don't care if their significant other is allergic to no end...that pet will be the last thing to go (including after the significant other) that they would ever give up.

Well, of course.  What sort of person abandons their friends for sex?  Not anyone I would want to have a relationship with, that's for sure.

gooki

  • Handlebar Stache
  • *****
  • Posts: 2393
  • Location: NZ
Re: PBS show on how impossible living on 38k/yr is
« Reply #20 on: July 29, 2012, 02:15:02 AM »
Thanks strider. Wow, just wow, I hope they get the financial help they desperately need.

I can't believe they can be so good with housing and food costs, and fuck everything else up.

Gerard

  • Handlebar Stache
  • *****
  • Posts: 1403
  • Location: eastern canada
Re: PBS show on how impossible living on 38k/yr is
« Reply #21 on: July 31, 2012, 01:08:26 PM »
It's kind of like my question regarding people who are in the dating world, and consider their pet to be a 'non-negotiable' for whatever reasons. They don't care if their significant other is allergic to no end...that pet will be the last thing to go (including after the significant other) that they would ever give up.
Well, of course.  What sort of person abandons their friends for sex?  Not anyone I would want to have a relationship with, that's for sure.
Animals are "friends" and partners are "sex"? Thank you for self-selecting! :-)

kisserofsinners

  • Bristles
  • ***
  • Posts: 381
  • Age: 40
  • Location: San Francisco
    • Monkey wants a house
Re: PBS show on how impossible living on 38k/yr is
« Reply #22 on: August 02, 2012, 05:20:38 PM »
Well now i feel grateful. Thanks for that...

When do we get Mustachain economics in public schools? **just kidding, i'm well aware of the powers at work preventing this...It still bums me right the eff out.

Uncephalized

  • Stubble
  • **
  • Posts: 136
  • Age: 32
  • Location: Phoenix, AZ
Re: PBS show on how impossible living on 38k/yr is
« Reply #23 on: August 03, 2012, 11:43:56 AM »
It's kind of like my question regarding people who are in the dating world, and consider their pet to be a 'non-negotiable' for whatever reasons. They don't care if their significant other is allergic to no end...that pet will be the last thing to go (including after the significant other) that they would ever give up.
Well, of course.  What sort of person abandons their friends for sex?  Not anyone I would want to have a relationship with, that's for sure.
Animals are "friends" and partners are "sex"? Thank you for self-selecting! :-)
Well... yeah. Until such time as the partner becomes a serious long-term partner, at which point he/she would presumably have already made friends with the pet, or the relationship would not have progressed as far.

My dog is certainly more important to my life than any woman I just went on a first date (or several) with. I'm not single/dating (married) but if I was, and a new girlfriend didn't want to get along with my dog, she'd be getting the boot, not my loyal and unwavering companion of 5+ years.

mindaugas

  • Bristles
  • ***
  • Posts: 367
  • Location: Littleton, CO
    • Mike Says Meh
Re: PBS show on how impossible living on 38k/yr is
« Reply #24 on: August 30, 2012, 01:01:34 PM »
Quote
MooreBonds: So for those that watched the episode, what was PBS's conclusion/wrap-up? My guess is that rather than empowering the family to take ownership of their lives and showing them how they can become financially free, I'm thinking they spun it that they 'need their unemployment compensation for ____ more months - just look at how they aren't making ends meet '.

They focus on the fees and high interest rates instead of focusing on not getting into debt at all. Their poor financial decision wasn't getting a high interest loan, it was getting a loan at all. Seriously, Rachel Schneider at the end advocated that if Juanita received more credit, she could focus on her future and rise up. At least the other lady mentioned cutting some expenses, but never did they recommend this to the family it was centered on. Do they really need that nice car?

Quote
MooreBonds: It's the attitude of "_____ is just $2/$3/$6/$10", which will forever shackle them in the bottom quartile of financial net worth (and I'll bet that  the PBS correspondent won't bother pointing that out to them because PBS doesn't truly care about them).

Indeed.

AJ

  • Pencil Stache
  • ****
  • Posts: 906
  • Age: 36
  • Location: Oregon
Re: PBS show on how impossible living on 38k/yr is
« Reply #25 on: August 30, 2012, 03:15:34 PM »
Umm...I'm eyeing that $280 media bill and the gym membership before I start aiming for the cat. How many cats do they have anyway? I have 3 and we don't spend anywhere near $50 a month on food and litter...

And I'm curious about the "loan" for medication...

Petruchio

  • 5 O'Clock Shadow
  • *
  • Posts: 41
Re: PBS show on how impossible living on 38k/yr is
« Reply #26 on: August 30, 2012, 04:04:34 PM »
While my first instinct was to harpoon this family for their foolish problems, I cannot help but feel pity for them. Seeing living on $38,000 a year as impossible is just sad. It's obviously not impossible; they just perceive that their unhappiness is tied to their income. We all know that this is untrue. After we have enough money to meet our basic needs, hedonistic adaption kicks in, and we are no happier for it.

Basically, I'm just grateful that my relationship with money differs so much from this family's relationship, and most other people. For me, money is a toll, not the source or scapegoat for my own happiness/unhappiness.

JJ

  • Stubble
  • **
  • Posts: 117
  • Location: On the road, Australia
    • A Philosopher and A Businessman
Re: PBS show on how impossible living on 38k/yr is
« Reply #27 on: August 30, 2012, 05:16:35 PM »
$50 say's they have cellphones.

Double or nothing that cell phone bill is higher per month than your bet.
Spot the guy from Vegas ;)

gooki

  • Handlebar Stache
  • *****
  • Posts: 2393
  • Location: NZ
Re: PBS show on how impossible living on 38k/yr is
« Reply #28 on: August 30, 2012, 10:29:12 PM »
It's sad to see they could be investing $1k a month for the future. Which although not heaps would put them in a good financial position in years to come.

StashinIt

  • Stubble
  • **
  • Posts: 138
  • Age: 36
  • Location: Fort Worth, TX
Re: PBS show on how impossible living on 38k/yr is
« Reply #29 on: August 31, 2012, 06:29:01 PM »
With that in mind, taxes are more than what disappears out of the paycheck.

Interesting read on the incentives of the U.S. tax code. Can you explain what happens in Figure 2 that causes the significant drop and subsequent convergence of the effective marginal tax rates?

menorman

  • Stubble
  • **
  • Posts: 178
  • Location: SoCal
    • Marven's Money Musings
Re: PBS show on how impossible living on 38k/yr is
« Reply #30 on: September 04, 2012, 02:32:40 PM »
With that in mind, taxes are more than what disappears out of the paycheck.

Interesting read on the incentives of the U.S. tax code. Can you explain what happens in Figure 2 that causes the significant drop and subsequent convergence of the effective marginal tax rates?

I don't know if I can explain it, only make an educated guess based on Figures 1a-c and the text of the report. It appears as if the value of subsidies and social programs becoming unavailable as income levels rise results in the individual having to spend significantly higher portions of their own income to make up the shortfall, possibly more than they're making extra. Therefore, it seems as if the two rates converge when most of the programs have phased out. The blue line is the effective tax rate if only some programs are enrolled in, the dashed red one is the effective tax rate if one enrolls in all of them. The following passage seems to explain it pretty decently:
Quote
But they tend to tend to discourage work at higher income levels, such as taking a second job in the family. This, of course, is what we might expect, since in a phase-in range the EITC increases rewards from work while providing no income to those who donít (in economic terms, the substitution effect is positive and there is no income effect). By the time one reaches the phase-out rate, income is higher as well as marginal tax rates, and other programs are also phasing out. Therefore, disincentives are fairly high at this level

BPA

  • Handlebar Stache
  • *****
  • Posts: 1191
Re: PBS show on how impossible living on 38k/yr is
« Reply #31 on: November 10, 2012, 04:08:55 PM »
It's kind of like my question regarding people who are in the dating world, and consider their pet to be a 'non-negotiable' for whatever reasons. They don't care if their significant other is allergic to no end...that pet will be the last thing to go (including after the significant other) that they would ever give up.
Well, of course.  What sort of person abandons their friends for sex?  Not anyone I would want to have a relationship with, that's for sure.
Animals are "friends" and partners are "sex"? Thank you for self-selecting! :-)
Well... yeah. Until such time as the partner becomes a serious long-term partner, at which point he/she would presumably have already made friends with the pet, or the relationship would not have progressed as far.

My dog is certainly more important to my life than any woman I just went on a first date (or several) with. I'm not single/dating (married) but if I was, and a new girlfriend didn't want to get along with my dog, she'd be getting the boot, not my loyal and unwavering companion of 5+ years.

Yep.  I'd choose my cat who has been an awesome companion for 12 years over anyone I'd gone on one date with too.  But then again, I'm not afraid to be single.  ;)  And I think that you'd have to rip me from his cold, dead paws.

<---Crazy Cat Lady  :P

offroad

  • 5 O'Clock Shadow
  • *
  • Posts: 88
Re: PBS show on how impossible living on 38k/yr is
« Reply #32 on: November 16, 2012, 10:02:11 AM »
BPA - understand the cat versus date sentiment on occasion.