So the other night I watched a documentary on abc called “My reality; the hidden America” or something along those lines. Diane sawyer went out and met with “middle class” Americans struggling to make ends meet. There were single parents working 4 jobs to put food on the table, a supercommuter going 4 hours one way to work, and low wage earners at fast food restaurants who were barely getting by, much less saving anything along the way. I understand in many ways I am lucky and this show helped me to understand the plight of many Americans who have it much tougher than me. However, at the same time, I don’t think a lot of these people are thinking through their situations. Let’s break down an example. A mother and husband with 2 kids are struggling to get by and the mom begins to reveal their finances. She makes $470 a week, with an $800 mortgage, $200 in utilities, $200 car payment, $100-200 in food, and some money for clothes/mcdonalds/etc leaving her with less than $50 at the end of the month, according to her. For clarification that’s about $1880 income and roughly $1400 in expenses. I’m not sure if taxes were factored into the 470 or not, but her salary alone should be covering the household expenses. Sure, not with much clearance, but it does the job. That’s without even addressing the fact that she is paying way too much for a car and likely has a cable bill eating $50 or more a month. They say they are barely getting by but never mention the dad’s job or salary. With the expenses covered shouldn’t he be able to save 100% of what he brings in? Maybe he’s unemployed. Fine. But can’t he pick up some part time work which would all be extra money to save? Certainly there’s more wiggle room than is being shared on camera. But let’s not forget this is TV, so nobody is going to watch if there isn’t any drama involved.
After commercial they cut to another mother in California who mentions she has a six figure job as a Biotechnology company manager. She then claims to be “struggling to get by” on a six figure salary. Here I had to call bullshit immediately. You can’t pay for the shit you need and have money left over on $100,000+????? Now, it was a quick comment amongst a group of other people so it went unquestioned. But I find it hard to believe she could not make a decent living for her family off that salary. Whether there was a father in the picture or not is uncertain but either way 100,000+ will cover 3-4 people per year in California with savings left over if you don’t blow it on useless crap. If you decide however that you NEED the newest Ford Pickup truck or a house that is 6000+ square feet, then yeah, you might struggle to get by. The thing is, people have a hard time realizing that they in fact don’t NEED any of that.
Let’s move on to the “supercommuter”. This was yet another situation that I felt sympathetic towards initially until the messy details came out. The man was a food service worker at Stanford and lived about 80 miles away with a wife and kids. Each day he’d leave his house at 3:30am and get back around 11pm. His commute consisted of biking to the train station which he took to get to a bus to get to the school. He said he had been doing that for 10 years. I realize that’s a struggle, but then I ask; what are his other options? I would be extremely skeptical that there is not a place to live within an hour of the university at the same cost of their current home. Or perhaps another job within an hour of his location that pays the same if not better. However, he continues to work hard and is able to save enough to put a down payment on a house. That’s awesome! A feel good moment for everyone, right? The new location? A couple blocks from where they were living before. 4 hours from his job. So he put down his life savings to be tied up in an asset that does absolutely nothing to change his situation. He says his next goal is to save for a car. Nice. A depreciating asset that is going to take up any money he saves on maintenance costs, gas, and insurance. There are much smarter choices to be made here.
Now, for a single guy with a well-paying job and no kids, I can’t truly say that “I get it”. Clearly I don’t. I’ve never been in those situations to experience that kind of struggle myself. But when you have to do things that suck like commuting 8 HOURS A DAY, then you need to stop feeling sorry for yourself and take action to change your situation. It might not be fun for your kids and wife to have to move but guess what? They’ll get over it. And if they don’t, show them how much money you’re now saving. Buy them a gift you can now afford. Maybe they’ll change their minds then.
Oh. And the couple with $75,000 in student loan debt? That’s a fucking trap everyone needs to watch out for. Sure, college is an investment in yourself and is a fantastic option for many people. There’s no disputing that, and if I had to do it all over again without any help I would have taken out loans to go to college. But the thing is, you need to pay off every penny of school you can up front without a loan and then erase that loan immediately after graduating by paying it off as quickly as possible. Debt flows through the world freely, now more than ever, but don’t think it will magically disappear. If you don’t think you can afford college that’s okay because it is not the only option. Again, it is a great option for some and a decent option for others but it is not the only way to get a job or make money. There are trade schools, fellowships/internships, specialized programs, Treehouse (which I recommend checking out), entrepreneurship and many other choices out there for you. You just have to be willing to get creative and think outside the box. If you put yourself in a situation where you owe money for something you can’t pay back, you’re screwed.