@Gatormama – nice post, but, see, the difference between you and Neal Gabler is taking responsibility and NOT taking responsibility for your choices. Your response to a big-gish check is to celebrate with Chinese food and pay utilities. I don’t see private schools or a place in the Hamptons on your list of expenses.
My closest friends are a couple of artists. Well, he’s an artist and she’s his manager and also makes some extra money by designing websites. But their income is shockingly low and, yes, irregular. They make it work by adjusting their lifestyle to their financial realities. Neal Gabler didn’t. He lived like an investment banker.
It’s really a lack of understanding how money works and learning to control it. And it really takes work. And guts.
I feel like a broken record (so I apologize) but Dave Ramsey’s “Total Money Makeover” is what this guy needs.
How to get out of debt, how to build an emergency fund (so a car repair won’t have you reaching for the credit card), which bills to pay first to stay afloat and then crawl your way out of debt. Faster the better so you can sleep at night sooner.
Dave Ramsey would probably say to this guy that he needs to go deliver some pizzas instead of complaining and learn to budget. Which is exactly what my daughter’s roommate did after reading the book (my D encouraged everybody to read)–got an extra job delivering pizza–extra 100 bucks a week made a huge difference. It dug her out of a hole. She now has her emergency fund (no longer one of those people without one in the article) PLUS she finally quit her job and found a better paying one to boot. She needed the kick in the pants that reading the book gave her. She will tell you how much better it is emotionally to be financially afloat. She just plain got tired of being broke
.
Another client friend has now payed off 17K of credit card bills within the past 18 months after learning to budget and save. Cut expenses. It’s not magic. It’s extra hours at work and self deprivation (maybe a lot depending on your circumstances) but the constant worry lines are now being replaced with self assurance and a smile. I sound like an infomercial I know but when you see drowning people take control of their money it really is inspiring.
I will say that paying for weddings is not on the list nor a new car nor a myriad of other things. But who cares? She certainly doesn’t. Not having people call you and hound you about bills is worth it all.
When one income is unreliable or nonexistent, one makes choices to adapt and live on ONE income. That was our reality for most of our marriage. We lived below our means on the one income and when we got more income, we celebrated a little and also socked away as much as we could for lean times. We didn’t upgrade our home or even let our S seriously consider an expensive full-pay private U–we just couldn’t afford it for him and D and magical thinking just doesn’t work very well. The mantra was what U could S attend that would provide significant merit award to make it at least somewhat affordable for the family and having a full-ride alternative safety as a backup.
I am glad my family didn’t raid their retirement savings to pay for my wedding. I would have been happy with a very small, modest celebration. It’s all about the event and celebrating with loved ones–in a park or at a more lavish setting is all the same to H and me.
People take risks. Sometimes the risks work out. Sometimes they don’t.
There are people who are in the upper middle class who end up in financial trouble. Maybe this is why some people are upset with the article. Because many of us can end up in trouble.
The economy has changed over the last few decades. It is harder to make it now. It is harder to stay up.
We had this financial crisis and if the federal reserve didn’t buy $3 trillion in securities, there would be a lot more people like the writer. The upper middle class lifestyle for many more would have gone up in smoke.
I don’t fault the writer that much. Blue collar workers have been getting crushed for a long time. Now it is white collar workers who have problems.
I look at my son’s pay. He has a pretty good white collar job. But, I think his pay is lower than somebody doing the same work 30 years ago. The cost of living has risen quite a bit over the last 30 years.
The 401k spent on the wedding is what made my eyes bug out. The article is supposed to be about how he gets it now – but he still doesn’t get it. He’s in the hole and still digging.
My issue for much of my life has been that I’m a congenital miser, and I use both words consciously. I was born this way. I was saving the cherry on my sundae when I was 2. During my adulthood, I had to consciously push myself to learn to lighten up a little and spend on experiences. I’ve worked hard to be able to spend on things like my honeymoon without anxiety – even though I can objectively afford it. I am far too aware that financial disaster could be around the corner; instead, I need reminders that we don’t know how much healthy time we have, and having amazing experiences with your loved ones may be a wise use of resources.
@hanna " I can objectively afford it" And there you have it. Just keep working on affordability and you will be able to look back on those experiences with joy rather than regret and dread. (or as the author puts it “shame”)
I’m very frugal for myself but try to be generous (within reason) with other people. That said, I think that some people don’t really understand how much deprivation is needed to survive financial hardship. Here’s my lifestyle: I live alone (because my husband withdrew from the marriage); I spend approximately $30 per week on food; I haven’t been out to a restaurant in 10 months; I own two serviceable pairs of pants and only a few more shirts and sweaters; I have two worn-down pairs of shoes; I rarely go to movies; I own a dumbphone instead of a smartphone; the list goes on. Several years ago, when things were worse, I had a tooth pulled instead of getting a root canal because the extraction cost $170 and the root canal would have cost at least $1,500. A few years after that, when another tooth died, I waited three months to have it fixed, until I could get dental insurance. I do have some retirement assets and savings and wouldn’t struggle to find $400 in an emergency. I doubt I’ll ever feel comfortable spending much money on myself because I’m terrified of becoming homeless.
Hanna- “-My issue for much of my life has been that I’m a congenital miser, and I use both words consciously. I was born this way. I was saving the cherry on my sundae when I was 2. During my adulthood, I had to consciously push myself to learn to lighten up a little and spend on experiences”
While lack of spending can be a problem, the flip side of the coin in spending too much is a problem that is harder to solve with more dire consequences. It’s a ton more fun to have people teach you to loosen up and enjoy life than it is to have credit hounds on your back and dial you back.
The problem is in my mind, not in the bank account. It’s like when you have a beautiful friend who is always worried that she’s eating too many carbs. She’s not going to get fat, and I’m not going to get poor, but in the back of our minds, we’re noticing how many croutons are on the salad.
@gouf78, no question that this is a better problem to have! But it is notable how some of these tendencies are ingrained in our personalities, and it’s tough to change.
Reading this article made me call my husband and tell him how grateful I’ve been for his socking money away. I grew up economically fragile and was close as a single mom. As a couple my husband and I are better off financially than all of my friends (which means there are no Jones’) although toward the bottom end of his friends.
We too have had lean times and my DH got rocked in the housing crisis around 2007 and ended up turning his keys back in. He is in sort of an on again/off again field. He was unemployed for a year, two years ago and we used almost every dollar in savings (in addition to my much lower wages) before the next job came in. He worked for almost another year and now just this month is unemployed again. But again we have savings enough to go another 9-10 months if needed. And a really good chunk of 401k. And other than a new (used) car loan no consumer debt–we had two cars over 160k miles and one finally quit. When he is working we can save 25% or more. And when he is unemployed we go thru a conscience frugality plan “if he is unemployed after 3/6/12 mo’s this is what we’ll do…” We are pretty open about our money situation with those around us to say “that isn’t in the finances right now.”
Yes, you keep thinking how far “ahead” you’d be if the hard times hadn’t hit but cross my heart I am happy to have enough to ride out the storms thus far. The real question mark for us is whether at his age he can keep pulling in high salaries when he works. You worry one day the jobs won’t be there. He laughs but I keep telling him he should become a postal worker–I am very risk adverse. I’d prefer a job at 60% of his current salary that was dependable and long lasting. At this point, having gone thru this more than once, so might he–and is open to looking for that. We are also lucky because I have a rental condo from when I was single that if times become really hard we can live in and live frugally on my salary alone–and that is something we have considered.
Part of me is really looking forward to retirement because b/t my pension and our SS and the 401K we should pull in as much or more than we spend now with three kids. Just have to last another 10 years.
@NJSue, I also agree it was brave of Neal Gabler to put himself out like this. Here’s hoping the article inspires a movie and he gets to replenish his 401K account. After a celebratory champagne party at his Hamptons place that is
It is striking that about 1/2 of Americans can’t easily come up with an extra $400, which gets lost in the personal anecdote. That’s pretty telling. It was even scarier to read that many would have to sell something to be able to come up with $2000, which is a bill that can easily occur with the aging cars we have in our household.
I remember when there was a federal shutdown and people were interviewed who said they didn’t know how they’d pay their bills if their paycheck was delayed. My S’s boss went around to all the employees he supervised, including S and asked them if they needed an emergency loan. S assured him that S had built himself an emergency fund and would be fine as long as Congress passed a budget and allowed payroll in the near future–in at least a few months (S had been recently hired out of college at the time, so his boss had been especially concerned). I was proud of S that he had saved up a good emergency fund and nest egg FIRST before spending on “wants.”
TV sitcoms create an unrealistic view of how comfortably people can live with one income in expensive cities. I really think the media contributes greatly to the problem, though wages haven’t increased much over the years while housing and other costs HAVE risen. What people pay for cable and cell phone service amazes me, especially people who have trouble paying other bills.
@rosered55 Even though I have recovered financially from the couple of years that we had no income, it tends to color my spending habits still. I can’t buy clothes unless they are on sale. I always pay myself first (in the bank),and even when I splurge on travel I use airbnb and FF miles. It’s a blessing and a curse. I’m doing well now but like I said in the previous post I will always feel like I’m living on the edge and that the possibility of loosing EVERYTHING is still there. I’m sure I would even be more frightened if I was doing it solo.
I was feeling mildly sorry for him - not being able to sell your co-op is one of those infuriating NY things. The whole economy of book advances is nutty - though I’m pretty sure there are ways to get around that. But once he refinances and throws away his credit cards. He goes back to making emotional choices. My kids deserve the best. He learned nothing!
I’ve been lucky that dh and I are both naturally pretty frugal. Our main splurge is to eat wildly expensive meals once every few years. We’ve always saved for retirement, and we have never had any debt besides the mortgage and occasional car loan (we buy them used, but when they were offering zero percent financing it seemed silly to empty the savings account.) We are lucky we have never had to live off my income. We are also lucky that an inheritance paid for the kids’ college tuitions. There have been times when the kids were young we didn’t have much in the checking or savings account, but there were still some investments that could have been tapped into.
I think one big problem is TV shows show us granite kitchens and all the latest gadgets, we think Yes to the Dress type weddings are the norm. I had friends whose wedding receptions was tea and cake or BBQ in their backyard and outfits they had sewn themselves. We had formica counters until last year.
We still have formica counters (but upgraded the formica) and haven’t done much to upgrade the house we bought decades ago other than installing hardwood flooring throughout, tho we are happy with it as it is. Yes, we COULD and CAN afford to upgrade but enjoy our house “as is.” When we graduated from law school, most of my classmates who got married had punch and cake receptions in a backyard. One had a catered meal at a church hall. It was about sharing the love and an exciting time in their lives.
Consumerism and media make people want what they think “everyone has.” We didn’t upgrade the sole TV we had until we realized it didn’t have feeds to allow a DVD or CD to be played on the screen, about 2 decades after we received it for our wedding! Our kids bought us an upgraded “smart TV” for Christmas one year because they really thought we should have one in the household. It does have a bigger screen but we were honestly perfectly satisfied with what we had.
Saving for retirement is HUGE for us and we have instilled it in S. He has done very well in saving for retirement–the max for his 401K at work, solo 401K and also his IRAs. We told him he can’t really count on pensions or SS for his future and we want him to be comfortable, and he does too.
