47% of adults claim they don't have $400 for an emergency?

[Chocolate Cake]

http://www.theatlantic.com/magazine/archive/2016/05/my-secret-shame/476415/


A bit long, but I found the author infuriating.


Basically, article is about 47% of adults claim they would have difficulty finding money to cover a $400 emergency.


The author asks “So who is at fault?”


Well, the author (who also has money struggles) sent his children to private elementary schools, even though he couldn’t afford it.


He then goes on to say that his daughters “earned the right” to go to the universities of their choice, even though they couldn’t afford it. Oh, those universities were Stanford and Emory Luckily, the grandparents helped with that. He admits that sending the girls to these elite colleges “meant that we had depleted not only our own small savings, but my parents’ as well.”


How disgusting to deplete your elderly parents’ savings because your daughters “earned the right” to go to the university of their choice.


But the most despicable thing in this article is the author has NO retirement savings, because he emptied his 401(k) to pay for his younger daughter’s wedding.


I say, for many of these 47% of adults that would have trouble finding $400, how about getting rid of your $600 cell phone?


But, of course, the author blames it on so many things other than personal choices.


I fear for our nation.

 

[S. C.]

I can understand it with people struggling and not making a living wage. But, what i find really sad is the people making a good wage and spending every dime. Some broke before the next payday.

 

[mom2rtk]

Well this should be fun.

 

[Chocolate Cake]

I can understand it with people struggling and not making a living wage. But, what i find really sad is the people making a good wage and spending every dime. Some broke before the next payday.

Exactly. And then writing about it and the shame that comes along with it....even though in his mind it isn't entirely his fault

It is 100% your fault. You should feel shame. You sent your children to schools you couldn't afford, you drained your retirement savings for a wedding. A WEDDING! A one day affair, as opposed to years of retirement. You and your wife should hide your faces for sure.

 

[JBeaty0507]

This is one of my biggest problems with people who are always claiming that the system has gotten them and why do good things happen to bad people. Here's the thing, to have money, you have to live within whatever money you make. You may think Dave Ramsey is crazy, but the man's cash system works....every time. I'm not saying that I'm debt free yet, I am not by any means, but I am saying that I got a full ride to a state school for college and so that's where I went. I also had a wedding for $6,000, because that's the money my parents had (and now I think I could have done it for $100 and taken the money and ran!! ). We try our best to live within our means, which means we have emergency money should we need it. You are correct, this is an infuriating article.

 

[tzolkin]

I honestly can't even finish the article because it's so infuriating to me.

It is 100% your fault. You should feel shame. You sent your children to schools you couldn't afford, you drained your savings for a wedding. A WEDDING!

My response to this was going to be "How much are his daughters going to appreciate their college choices and expensive weddings when they have to take care of their parents later on because they haven't saved enough for retirement" BUT then I started reading the article and right off the bat he mentioned that he already borrows money from his adult daughters when he doesn't have enough to make it to the next paycheck.

My oldest is about to start college and she is glad that we insisted she choose a school within our means. She understands that our priority is to save (she already started her own Roth IRA as soon as she got a part-time job) and she is grateful that we will not leave her responsible for us later on. My parents have been taking care of my grandparents for over 20 years so we have first-hand experience with how that plays out. I love my grandparents, but it was unbelievably selfish to retire early without saving anything because they always had to live in the nicest home, buy expensive items, etc. My parents are now unable to retire, visit their grandchildren, or vacation due mainly to the financial mistakes their parents made. My kids are glad that DH & I are doing all we can to ensure they aren't put in the same situation.

 

[kamik86]

Wow when I clicked that I was hoping they only counted it if you had in in the bank. This I could understand because if someone had credit card debt it would make sense to pay all the money towards high interest credit cards and if an emergency should come up and you had to put a bit more back on the card you wouldn't be any worse off then if you did it the other way.

My parents did allow me to go to the college I wanted to which did mean some loans on both our part that probably wasn't necessary I could have done it cheaper. However their loans have been fully paid off and I now make enough to easily pay my loans and have quite a few luxuries. Which I could easily scale back a bit if mom and Dad needed some more help. However so far they seem to be managing quite well in their retirement. Not lavish but enough where they can have some fun

 

[willowsnn3]

Earning the right to go to the college of your choice to me means that you worked very, very hard and got a scholarship....

 

[Goofy_Disney_Dad]

Well this should be fun.

It's almost like deja vu, chapter two.

 

[PollyannaMom]

I do think the author made mistakes, but I'm really not surprised so many people make the same ones. We do live in a society with a skewed perception of "normal", and it is hard to overcome the guilt of not giving your kids "the best".

(That said, plenty of people somehow manage to. I'm not saying we're all doomed, just that I'm really not completely shocked.)

 

[TiggerBouncy]

But, of course, the author blames it on so many things other than personal choices.

Actually, I didn't get that from the article. I agree with your premise about worrying about our society. and in not taking personal responsibility. However, in this case, it seems the author owns up. Quotes:

Take me. I plead guilty. I am a financial illiterate, or worse—an ignoramus. I don’t offer that as an excuse, just as a fact. I made choices without thinking through the financial implications
....

I don’t ask for or expect any sympathy. I am responsible for my quagmire—no one else. I didn’t get gulled into overextending myself by unscrupulous credit merchants. Basically, I screwed up, royally.

I don't see a lot of blame in there. Seems to me he admits it in very plain text. He talks about WHY he was ignorant, and I don't disagree that society - and parents - should take more responsibility in educating our children about debt and living within ones means and why Reagonomics doesn't work on a personal scale (or a governmental one either). So in short, I partly agree - the author has no one to blame but himself for his situation (which he admits), but when a society has increasingly complex options and offerings to help you plan your life, someone needs to help you understand those options - and we all need to be more mindful to teach our children about the pitfalls one can get into if they are not mindful and the resources (financial planners, accountants, etc) who can help us with those choices.

 

[L&Lfan]

I think one of the biggest problems is middle class people trying to live as if they were rich.

 

[Chocolate Cake]

Actually, I didn't get that from the article. I agree with your premise about worrying about our society. and in not taking personal responsibility. However, in this case, it seems the author owns up. Quotes:

Take me. I plead guilty. I am a financial illiterate, or worse—an ignoramus. I don’t offer that as an excuse, just as a fact. I made choices without thinking through the financial implications
....

I don’t ask for or expect any sympathy. I am responsible for my quagmire—no one else. I didn’t get gulled into overextending myself by unscrupulous credit merchants. Basically, I screwed up, royally.

I don't see a lot of blame in there. Seems to me he admits it in very plain text. He talks about WHY he was ignorant, and I don't disagree that society - and parents - should take more responsibility in educating our children about debt and living within ones means and why Reagonomics doesn't work on a personal scale (or a governmental one either). So in short, I partly agree - the author has no one to blame but himself for his situation (which he admits), but when a society has increasingly complex options and offerings to help you plan your life, someone needs to help you understand those options - and we all need to be more mindful to teach our children about the pitfalls one can get into if they are not mindful and the resources (financial planners, accountants, etc) who can help us with those choices.

He also talks about stagnate wages. And about "rough patches". There is nothing complex about not buying a luxury you can't afford. You don't clear out your 401K to throw a 4 hour party. You don't need a financial planner to tell you it is wrong to clear out grandma's savings account so your princess can go to Stanford.

He does the ol': "Yes I made bad choices, BUT...." and "Maybe we screwed up."

There is no "but". There is no "maybe".

And then, of course, the Victim Card.

"Many middle-class wage earners are victims of the economy, and, perhaps, of that great, glowing, irresistible American promise that has been drummed into our heads since birth: Just work hard and you can have it all."

And then goes on to talk about how he was sued (for not fulfilling a contract) and of course he should have been given an extension. Blah. Blah. Blah. Full of excuses.

He still is not seeing that he is 100% wrong.

 

[ICF]

It's sad, but not really surprising.

Too many people like to claim a lack of money....while drinking their $5 coffee every morning and talking on their new iPhone about their upcoming 10 day cruise. They then will whine about never being able to send their kid to college or retire because they just don't make enough money.

We live in a society where people think they have to have everything right now....and of course the newest and best of all these things too. Little thought is given to "tomorrow"....everything is about now.

 

[L&Lfan]

^^^^
So unlike the way most of our parents lived their lives.

 

[usnuzuloose]

I have an emergency fund. I try to put away as much as I can. We live on one income. I don't work and can't even collect disability as I have no doctor. We have not had a vacation in 4 years. And can't afford it. And I won't charge to do it either. I don't want payments. Some people can have a hard time for simple things.

 

[mummabear]

It has always been drilled into us that you need to have 3 months income (well costs) set aside.

 

[Chocolate Cake]

^^^^
So unlike the way most of our parents lived their lives.

So true!

It's sad, but not really surprising.

Too many people like to claim a lack of money....while drinking their $5 coffee every morning and talking on their new iPhone about their upcoming 10 day cruise. They then will whine about never being able to send their kid to college or retire because they just don't make enough money.

I often wonder about this. What has been the change in the past few decades? The 80's were a time of over indulgence, but NOTHING compares to what is going on today.

Why the need to spend and spend and spend on frivolous things? To the point where walking around a grocery store with a Starbucks coffee is the norm. Can't use coupons because you are clutching your $5 coffee, all the while complaining about high food prices. Nuts.

 

[Magpie]

I have friends who genuinely don't have 400 dollars for an emergency, due to circumstances beyond their control. One is a single father with health issues and a severely disabled daughter, as well as a young son, who struggles to keep a job. When a crisis happens, he has to turn to friends for help (fortunately, he has many friends!). I have another friend who lives on disability and has to share an apartment, in order to make ends meet. She really did try to do "everything right", but sometimes you don't get a fair break in life. We've given them both "gifts" or hired them to do stuff for us, on occasion. (Never lend money to family or friends, just give it.)

But, I also know people like the author of this article, who bankrupted themselves to live way beyond their means, and who then excused it all as being "for the kids". And I really don't think, especially as educated adults with the entire Internet at their fingertips and the means to look up any bit of "financial literacy" they need, there's any excuse for that. It's not doing your kids any favour, either.

We've tried to do better by our kids. There's a Canadian show called "Till Debt do us Part" that we watched a lot as a family. Lots of documentaries. We involved them in budgeting. We had them draw up plans for when they were choosing their universities (we saved for years to cover some of the cost, using RESPs, and they're covering the rest with loans and grants). One of the kids is on track to get through her undergrad debt-free, which is awesome since she's got her eye set on a doctorate. The other is currently trying to figure out if moving out is worth the debt he'll accrue.

They both know they must earn their own way. We aren't going to rescue them, if they end up in financial hot water (unless, as in the case of the friends I mentioned above, it's due to something beyond their control).

Debt's okay. In fact, it's even a good thing sometimes, if you want a decent credit rating. But before you get into it, you have to have a plan for paying it back!

 

[robinb]

Interesting article ... my DH's cousin's husband was quoted in it!

I thought this quote was interesting and it's something I was saying on the Student Loans thread:

“If you want to have financial security,” says Brad Klontz, “it is 100 percent on you.” One thing economists adduce to lessen this responsibility is that credit represents a sea change from the old economic system, when financial decisions were much more constrained, limiting the sort of trouble that people could get themselves into—a sea change for which most people were ill-prepared.

Back in the day you didn't get a loan (credit card, mortgage or student) unless the band thought you could pay it back. The "sea change" that Klontz is talking about is when creditors opened up their purse strings and handed out credit/loans like there was no tomorrow.

I have an emergency fund. I try to put away as much as I can. We live on one income. I don't work and can't even collect disability as I have no doctor. We have not had a vacation in 4 years. And can't afford it. And I won't charge to do it either. I don't want payments. Some people can have a hard time for simple things.

OT, but why don't you have a doctor if that's what's standing between you and disability?