Suburban Poverty article

[prudence]

I wish the author gave more details of her financial situation prior/post job loss. In any case, it sounds like not a lot of financial planning was taking place in the household prior to their economic downturn, just lots of spending. I get the feeling she is still in a bit of denial.

http://parenting.blogs.nytimes.com/2015/01/13/suburban-poverty-hidden-on-tree-lined-streets/

[MillenialMustache]

Hmmm...if her house looks anything like those in the photos, she should start by selling it. She would have extra cash, plus lower utilities. I do not like articles like these.

[Gone Fishing]

Hardly an article, sounds more like the opening to some post-apocalyptic movie.  Let's see some numbers people!  I was going to chide the cookie purchase, but after a little thought, the cost per calorie is probably pretty low! 

[BPA]

Seems like they have enough to feed their family.  Being poor as a child made me appreciate what I have now in a way I don't think I could if I'd not been poor.  The kids don't have the latest gadgets and wear second-hand Aeropostale?  That may actually be a good thing.

[sheepstache]

If I'm understanding this right, they blew through their savings and retirement accounts in a year. So, they only had a year's worth of expenses saved, which should have been a warning to them that they were nearly living paycheck to paycheck.

Also, aside from being behind in utilities a couple times, I'm seeing a house, a closetful of coats, money for food, etc. I wish she or whichever editor chose her title had avoided the word "poverty."

[MrsPete]

Yeah, I can't work up too much sympathy.  I don't hear about medical problems or special-needs children in this article.  I hear about a family who chose to have a big family and buy a big house and to establish expensive habits -- all hinged on the idea that Dad's paycheck could never stop.  And if they're old enough to have teens finishing high school, it's hard to believe they had only a year's worth of expenses saved.  I also don't hear much resourcefulness:  I mean, if I couldn't afford to buy graduation pictures of my kids, I'd snap a few of my own instead of whining that I couldn't buy professional shots.   

[TexasStash]

Thought this article was interesting and relevant to the topic at hand. Pew survey says bottom 20% of americans have 9 days of liquid savings (checking/savings accounts), while top 20% only has 52 days of liquid savings on hand. Pretty remarkable.

http://www.rochesterhomepage.net/story/d/story/the-sorry-state-of-americas-household-finances/20603/pi7XFhnLhUyHEadIc6acfA

[RangerOne]

    Part of the reality of establishing a budget based on one income is what is likely the difficult of getting another job of similar pay if mine goes belly up.

    If there is a high likely hood that you can never get more work for the same pay if you lose your job then your back up plan better involve early retirement, or cutting your major costs. Housing being number one.

   Without a way to get back to your old income how can you realistically keep your home if you don't own it outright?

[NoraLenderbee]

Yes, it's hard when income goes away--I do sympathize with that. Having to cut back is hard. But buying fashionable clothes second hand is not POVERTY, for heaven's sake. I almost think this belongs on the Shame and Comedy forum.

[RangerOne]

Thought this article was interesting and relevant to the topic at hand. Pew survey says bottom 20% of americans have 9 days of liquid savings (checking/savings accounts), while top 20% only has 52 days of liquid savings on hand. Pretty remarkable.

http://www.rochesterhomepage.net/story/d/story/the-sorry-state-of-americas-household-finances/20603/pi7XFhnLhUyHEadIc6acfA

Even if they had a years worth of income saved that wouldn't have changed anything if he was forced to accept a much lower salary and they were still living on one income.

The reality he had to face is that their cost of living had to change to accommodate a lower salary. That should have involved a housing move. Definitely tough choices but as long as everyone is still healthy their in pretty good shape.

[GardenFun]

It was interesting that with 6 kids, she didn't have an earlier need to know where the money is going.  Not everyone has to meticulously record their receipts vs. shoving them in coat pockets, but it shows very little interest in saving it.  I can hardly think of an area of the US where raising 6 kids would not involve some level of budgeting. 

[bzzzt]

Time to bust out the world's smallest violin for this one. With my career in construction, it absolutely baffles me how people don't plan for job loss.

[Goldielocks]

Mmhmmm

I know I "gave up" buying school photos , school fundraisers - "giftwrap!" " pies" "cookies" " coupon books", and book fairs quite a few years ago, without dire financial straits -- those things are expensive!   I also shook my head wondering how other people could afford them.

Instead I donate a lump sum of cash once a year to the PAC, so they have my 100%, as they do buy good things / educational extras for the classrooms

[MrsK]

Why didn't the kid graduating buy his/her own pictures?  These people need some serious face punches. Lots of boohooing and feeling victimized and not a lot of common sense.  Everyone over 16 in that house should have a job and younger ones can babysit.  Mom is a good writer, but could also do something else to supplement the family income.  I can't even fathom how anyone could blow through their life savings in one year.  I have been laid off.  You retrench and go full austerity.  Cut the cell phones, cut the cable and the internet, sell the car, downsize the house, etc. 

Everyone on this forum is already doing these things and we don't consider ourselves poor. 

I read the comments posted after the article and it's a huge pity party.  WTF??

[MrsPete]

Thought this article was interesting and relevant to the topic at hand. Pew survey says bottom 20% of americans have 9 days of liquid savings (checking/savings accounts), while top 20% only has 52 days of liquid savings on hand. Pretty remarkable.

http://www.rochesterhomepage.net/story/d/story/the-sorry-state-of-americas-household-finances/20603/pi7XFhnLhUyHEadIc6acfA

The line that surprised me most was " almost half of all households saw either a drop or gain of more than one-quarter of income in a two-year period".  If HALF of all households experienced a LARGE change in income, you'd think people would be a little smarter -- would think, "Hey, this could easily happen again.  I'd better prepare myself, insulate myself a bit." 

It was interesting that with 6 kids,

I think it was 8 kids.  Of course, your point remains unchanged. 

I have been laid off.  You retrench and go full austerity.  Cut the cell phones, cut the cable and the internet, sell the car, downsize the house, etc. 

Everyone on this forum is already doing these things and we don't consider ourselves poor. 

My husband's company goes through layoffs every couple years.  The first time it happened, we worried:  We had a new mortgage, one child and plans for more; however, we were quick learners:  The second time layoffs were threatened, we realized that this was going to continue happening . . . and it made no sense to wring our hands and worry -- planning, though, that made sense. So he looked into exactly what kind of pay he would receive, and we made a list of things we'd cut out immediately and how we'd make do on my pay alone.  We developed a plan of attack and decided upon how long he'd hold out for a replacement for his good job . . . and at what point he'd start flipping burgers or waiting tables.  We wouldn't have thrived and saved, but we wouldn't have been living in poverty either.  We actually felt much better when we looked at the numbers and knew it'd be okay if he were laid off.

I'm thinking of a couple friends of mine whose husbands have been laid off.  Half of them sat back and cried, "Woe is me", while the other half went out there and beat the bushes and took anything they could to provide for their families.  I'm thinking of one friend whose formerly-professional husband started driving a cab and another who returned to his family's restaurant and cooked -- some degreed people think themselves "above that". 

And, yes, most of us here are living as she described -- voluntarily.  And that's why we're NOT poor. 

[MayDay]

Not that I'm sympathetic to the overall idiocy of these people!

But I do think, now that my kids are in school, that I feel a much much bigger barrier to moving. Changing school districts would be pretty much my last resort, and a lot of suburban towns have homogeneous house prices.

Obviously this family had loads of other places they could have cut if moving was a last resort.

[GardenFun]

MrsPete - I 100% agree.  Work slowdown cycles are present in nearly any industry.  My family worked construction so there was the ever-present January-March Midwest work slowdown.  You weren't surprised by it, you planned for it.  I can't think of a major company in our area who hasn't had some layoff every 5 years, more around the 3 year cycle you described.  That constant job security worry was also our motivation for paying off all debt. 

During childhood, I would occasionally be frustrated growing up in a family where income wasn't consistently stable.  Now I appreciate the skills it taught me, along with avoiding the harder lessons other people are learning much later in life. 

[Jack]

Thought this article was interesting and relevant to the topic at hand. Pew survey says bottom 20% of americans have 9 days of liquid savings (checking/savings accounts), while top 20% only has 52 days of liquid savings on hand. Pretty remarkable.

http://www.rochesterhomepage.net/story/d/story/the-sorry-state-of-americas-household-finances/20603/pi7XFhnLhUyHEadIc6acfA

There's lots of Mustachians who have relatively little "liquid savings," too -- see MMM's post on "springy debt."