'Dismal' prospects: 1 in 2 Americans are now poor or low income

[ilovemk76]

And I think more folks are "going" back to that motto but remember we are talking about a mindset that we have willingly advocated and supported for 40 years.

How long did folks take to come around to 401K's? It wasn't an instant hit and even still many do not fully take advantage. for so long we were use to companies paying *****ons.

Nice typo!



401Ks - There are two types of companies, opt-in and opt-out. What they have found is that the employees never take the time to either opt-in or opt-out. It is more about not doing the paperwork rather than making a decision about retirement. This is one reason the Congress is considering a bill to make all 401Ks opt-out only.

 

[eliza61]

Nice typo!



401Ks - There are two types of companies, opt-in and opt-out. What they have found is that the employees never take the time to either opt-in or opt-out. It is more about not doing the paperwork rather than making a decision about retirement. This is one reason the Congress is considering a bill to make all 401Ks opt-out only.

 

[eliza61]

One reason why people do know how to live on a budget is because they don't have to.

The government supplies what the family needs. Period.

I keep bringing up my childhood for a reason. When you grow up in an era that did not include welfare, you HAVE to live on a budget. Otherwise you would starve. By around age 8, I understood that we had a set amount of money to buy groceries. If we spent it on anything else, we could not eat.

There has to be something in between how I grew up and how welfare is given so freely today.

But remember many people did not eat. Hence, the bread lines and starvation we seen during the depression.

And even today (or at least as of 2009) there are very good calculations and studies showing that at least 5 million children will go without "adequate" food. Now I don't know what "adequate" encompasses so I'm sure thats up to debate. But the idea that dissers love to spout that anyone can simply walk into a federal office and get food assistance is not correct and many who do get some assistance often falls very short of what is needed.

A study was done in Phillys 1st Congressional district last summer. This district is 2nd in the nation to residents living in hunger. Its a long article but pretty interesting. One interesting statement was this:

Because of tightened federal eligibility, the number of people on welfare has shrunk since 1996. One in 10 of the nearly 43 million Americans living below the poverty line - $22,050 for a family of four - received welfare cash benefits in 2009, according to federal data.


So while it may seem to folks here, that every other person is on welfare, thats not what statsitic show.

http://articles.philly.com/2010-10-10/news/24981017_1_census-data-house-districts-poorest-section

Now definitely these folks suffer from a whole host of problems, bad choices and decisions that don't help their situation and it goes deeper than just hunger.
I can't speak to how "easy" or "hard" it is. I would like to see some type of reform to make sure the "scammers" can't abuse the system and some type of reform so it doesn't become generational.

 

[Muushka]

Are you really in your 80's? I never would have guessed.

Lately I keep running into the misconception that "welfare" is a new thing. It isn't; the first Federal program was enacted in 1935 and there were numerous state and local programs in existance long before that; up until the 1940's getting government assistance was known as "being on the dole." If there was no welfare in your childhood, it was probably because your parents either did not qualify for some reason, or chose not to apply. My MIL is 81 years old, and her family collected welfare when she was a child (though if you were not family you would NEVER get that information out of her; she is deeply ashamed of it.)

The framework of the current state/federal funding structure was put into place in 1965. Welfare was actually much easier to get in the 70's and 80's than it is now. Stricter eligibility requirements and lifetime caps were put into place during the Clinton administration.

No, I am a in my 50's. The wonderful war on poverty that began in the mid-60's was something that came along at the tail end of our needs. Since I was around 11 at the time, I wasn't aware of what was available to very low income families. Trust me, we were low income. I don't know why, according to what you say, I guess some sort of welfare did exist when we needed it, but we did not receive any. Single dad with 3 children, we would have qualified.

Breadlines weren't around for my time, that was depression era. If we did not spend money on anything extra, we had (barely) enough to eat.

I don't see how anyone is going hungry today with all of the school lunch and now dinner programs.
When I worked with near-homeless families, often I would see children load up their plates and eat 1/4 of the food and then throw the rest out. Not all did that, but some did.


My point is not that I begrudge not being able to collect welfare from the state or gov. I count my blessings that my father did not receive it. I count my blessings that I know how to budget and manage money. And I am grateful that being brought up in that poverty made me know that it was not a lifestyle I wanted to continue.

 

[cats mom]

The people around you, that you see, that you interact with, are, more than likely, in your general socioeconomic group. Yes, there will be outliers and people who were in your same socioeconomic class but have suffered financial hardships recently. However, the 50% figure doesn't mean half the people you know, because the people you know are the ones you work with, your kids go to school and activities with, who shop where you do, who live in the same neighbourhood, etc.

If you widen the area, you'll find an area of people with a living standard far below yours and I guarantee they'd say that 50% of the people THEY know don't have kids who have their own new cars, coach bags, go out to dinner on a whim, etc.

Not to mention all the folks who may look and act like they have money to burn; but if you were able to get a good look at their true financial situation, you may very well find that they're actually hanging on by a thread, if that.

Budgeting is definitely a problem but not a surprising one to me. But why should they have been taught budgeting? Look at the conditions anyone growing up say after 1970's have lived in.
1) our entire economy is based on buying. Everyone from our elected officials (take your kids to disneyworld) to the banks have said spend, spend, spend. We learned the lesson well.
2) up until I think last year our savings rate was in the negative. When I was a little girl, banks gave you a toaster for opening up a savings account. since then we've done a 360 degree turn. Up until last year I think, many college campuses had credit card representatives handing out cc to college kids (with no jobs) like they were candy.
3) artificial exponential growth on housing markets caused us to lose our mind.
We thought the good times would keep rolling. Remember the old adage "housing markets will always go up".

So tell me why is anyone shocked that people have not learned to live on a budget? When has anyone been taught to live on a budget?

These are the "averages" so folks yes I know everyone here taught their kids about living within their means and no one here took out equity in their houses but I've come to the realization that the dis in no way resembles real life.

Prior to credit cards, home equity lines of credit, etc if you wanted to buy something, you needed to save money from your wage income until you could afford to pay cash for it. There was an absolute dependency upon wage income to provide a lifestyle; living beyond your means was not possible unless you had previously saved money, and it could not continue beyond the day you went broke. Times have certainly changed.

It's now possible for folks to live much better today than they can actually afford, and I swear many people believe personal ponzi scheme borrowing is a sophisticated method of financial management.

I was shocked when I took a close look at mortgage equity extraction figures from 1991 - 2007. Short synopsis: it hovered around 50 billion for years and spiked at just over $250 billion at the peak of the housing bubble.

IMO much of the apparant wealth and consumer spending of previous years was just an illusion.

 

[angierae]

I was shocked when I took a close look at mortgage equity extraction figures from 1991 - 2007. Short synopsis: it hovered around 50 billion for years and spiked at just over $250 billion at the peak of the housing bubble.

IMO much of the apparant wealth and consumer spending of previous years was just an illusion.

I was born in 1975, and I remember having a "second mortgage" being something you would be horribly ashamed of, and people would whisper about it behind your back. "The Jones' had to take out a second mortgage, how awful!"

And then suddenly they started calling them "Equity loans" or "lines of credit" and suddenly it was all "hey! there's cash in your house! Want it?" and suddenly it's rare to hear of someone paying off a mortgage.

(I knew of two people in my life who have ever stayed in a house long enough to pay it off - my mother and stepfather, and my MIL and her husband. Both of them bought their homes in the late 60's - my MIL sold hers in the mid 2000's and bought a condo for cash, and my dad is still living on the same property, although he built a new house there in the late 80's (and paid cash for most of it, doing most of the building himself.)

People now want things now now now - when I mention that I'm saving up cash for my Disney vacation, friends my age are falling all over me about how "proud" they are that I'm saving up for something rather than putting it on credit. A Disney trip is expensive enough without paying INTEREST on it!

 

[crashbb]

People now want things now now now - when I mention that I'm saving up cash for my Disney vacation, friends my age are falling all over me about how "proud" they are that I'm saving up for something rather than putting it on credit. A Disney trip is expensive enough without paying INTEREST on it!

And then there are those who want to file for bankruptcy but keep their DVC!

I'll admit that I do use credit cards to pay for my vacation (and most things). However, I have enough cash (well, money in my bank account) to cover it and pay the card off in full each month. Not all of us putting it on credit are paying interest.

 

[eliza61]

then throw the rest out. Not all did that, but some did.


My point is not that I begrudge not being able to collect welfare from the state or gov. I count my blessings that my father did not receive it. I count my blessings that I know how to budget and manage money. And I am grateful that being brought up in that poverty made me know that it was not a lifestyle I wanted to continue.

and it is a skill but unfortunately we have left those days. remember we've have 40 years of make believe growth and it was sort of like an addict on crack. We liked the easy money and the prosperity it brought.

Now I didn't grow up in poverty but I too had parents who taught us how to squeeze a dollar bill until it squealed. LOL. and we learned to prioritize.

One issue I'm constantly battling with my kids is this ridiculous habit they and their friends have of going to the mall for fun. We now associate shopping with recreation, so is it any wonder we can't "go without". Do people with multiple kids do "hand me downs" any more? Not the young moms I know?
even here we will get post of folks on the budget board who say they are trying to do disney cheaply but want to buy the kids a new wardrob for vacation. When I ask do the kids need new clothes, many times the answer is no but some how in America, going on vacation or starting a new school year = a new wardrobe?

The genie is out the bag and I truthfully don't see us going back to "frugality" until exhausting all other possibilities. Sort of like everyone giving up their computers and going back to typewriters. ain't gonna happen.

So now we've got this very, very large population that had the economy kept going might have been ok but since as cats mom pointed out their real wealth was an illusion, they have become a very large segment that needs assistance. Now we have no choice but to assist them.

 

[Colleen27]

I don't see how anyone is going hungry today with all of the school lunch and now dinner programs.
When I worked with near-homeless families, often I would see children load up their plates and eat 1/4 of the food and then throw the rest out. Not all did that, but some did.

That can actually be a reflection of hunger in kids - they load their plates intending to gorge while they can, without the mature self-awareness than an adult would exhibit in realizing that no matter how hungry they are there's a limit to how much they can pack away in a single meal.

 

[Muushka]

That can actually be a reflection of hunger in kids - they load their plates intending to gorge while they can, without the mature self-awareness than an adult would exhibit in realizing that no matter how hungry they are there's a limit to how much they can pack away in a single meal.

As someone who was hungry for a few times as a child, I see where you are going with this. I never threw out any food. I may have overate, but I never wasted it. It was too valuable.

 

[Muushka]

That can actually be a reflection of hunger in kids - they load their plates intending to gorge while they can, without the mature self-awareness than an adult would exhibit in realizing that no matter how hungry they are there's a limit to how much they can pack away in a single meal.

As someone who was hungry for a few times as a child, I see where you are going with this. I never threw out any food. I may have overate, but I never wasted it. It was too valuable.

Children today are fed in school nowadays, sometimes all 3 meals.

 

[beaucoup]

http://*******.com/8y9zgtv


Wondering how or if it is effecting Disney Vacations. In the fall I knew a lot of people planning trips, but not hearing as much lately. Of course everyone is busy with the holidays too.

Just so sad.

I find it really strange that if your title is correct, that 1 in every 2 Americans are now low income or poor, that a Walt Disney Vacation is the LAST thing that many people should be even worrying or even thinking about. Disney, really?

 

[angierae]

And then there are those who want to file for bankruptcy but keep their DVC!

I'll admit that I do use credit cards to pay for my vacation (and most things). However, I have enough cash (well, money in my bank account) to cover it and pay the card off in full each month. Not all of us putting it on credit are paying interest.

That's totally not what I was talking about, though. Booking a trip on a credit card and then paying it off is just easier a lot of times. I'm talking that most people I know my age (mid 30's) would just charge the card and pay it off whenever they could manage, and the fact that I'm not willing to do that shocks them.

 

[Muushka]

and it is a skill but unfortunately we have left those days. remember we've have 40 years of make believe growth and it was sort of like an addict on crack. We liked the easy money and the prosperity it brought.

Now I didn't grow up in poverty but I too had parents who taught us how to squeeze a dollar bill until it squealed. LOL. and we learned to prioritize.

One issue I'm constantly battling with my kids is this ridiculous habit they and their friends have of going to the mall for fun. We now associate shopping with recreation, so is it any wonder we can't "go without". Do people with multiple kids do "hand me downs" any more? Not the young moms I know?
even here we will get post of folks on the budget board who say they are trying to do disney cheaply but want to buy the kids a new wardrob for vacation. When I ask do the kids need new clothes, many times the answer is no but some how in America, going on vacation or starting a new school year = a new wardrobe?

The genie is out the bag and I truthfully don't see us going back to "frugality" until exhausting all other possibilities. Sort of like everyone giving up their computers and going back to typewriters. ain't gonna happen.

So now we've got this very, very large population that had the economy kept going might have been ok but since as cats mom pointed out their real wealth was an illusion, they have become a very large segment that needs assistance. Now we have no choice but to assist them.

The thing is that not everyone bought into the easy money. We do all right, but certainly are not wealthy. Nowhere near it.
Money has never been easy for me. We could easily have tapped into home equity, but thought it would be better to live within our means.
I guess that is part of the reason why I find it so difficult to understand
and even more difficult to fund it for people who waste so much.

It is a mess.

 

[MrsPete]

Yes, because you can go into Dollar General and buy a cellphone for $30. You can't maintain a landline for that. In addition, if your cell phone runs out of minutes you can still call 911. You have to have a phone number if you are doing temp work or labor work so your boss or the agency can call you. If you're trying to get handyman labor, people have to be able to call you. If you're applying for jobs, same deal.

Not too long ago having a cell phone was a luxury -- now it's become the standard. The "luxury" is having a cell phone AND a landline.

The bolded is really the issue. The people around you, that you see, that you interact with, are, more than likely, in your general socioeconomic group. Yes, there will be outliers and people who were in your same socioeconomic class but have suffered financial hardships recently. However, the 50% figure doesn't mean half the people you know, because the people you know are the ones you work with, your kids go to school and activities with, who shop where you do, who live in the same neighbourhood, etc.

If you widen the area, you'll find an area of people with a living standard far below yours and I guarantee they'd say that 50% of the people THEY know don't have kids who have their own new cars, coach bags, go out to dinner on a whim, etc.

I'd agree . . . if I didn't teach in a public school. This is an all-inclusive institution, and we serve families from all walks of life: Those who literally live in mansions and those who live in genuine poverty. One number I can state with confidence: No school in our county has 50% of the kids on free lunch.

Are you really in your 80's? I never would have guessed.

Lately I keep running into the misconception that "welfare" is a new thing. It isn't; the first Federal program was enacted in 1935 and there were numerous state and local programs in existance long before that; up until the 1940's getting government assistance was known as "being on the dole." If there was no welfare in your childhood, it was probably because your parents either did not qualify for some reason, or chose not to apply. My MIL is 81 years old, and her family collected welfare when she was a child (though if you were not family you would NEVER get that information out of her; she is deeply ashamed of it.)

The framework of the current state/federal funding structure was put into place in 1965. Welfare was actually much easier to get in the 70's and 80's than it is now. Stricter eligibility requirements and lifetime caps were put into place during the Clinton administration.

Yes and no. What we term "welare" today in general conversation is really a collection of programs. The first of these did start sometime around the 40s with Rosevelt . . . but "welfare" didn't really develop into what it is today until Johnson's War on Poverty, which happened in the 60s. That's when "welfare" became, for some families, a generational way of life. That's when some people stopped using it as a way to get back on their feet and saw it as a substitute for a job.

IMO much of the apparant wealth and consumer spending of previous years was just an illusion.

Oh, that's blatantly true. And that's why our economy cannot return to what it was 10-15 years ago: That wasn't a true reflection of our nation's real spending power. It was fueled by spending beyond our collective means.

I was born in 1975, and I remember having a "second mortgage" being something you would be horribly ashamed of, and people would whisper about it behind your back. "The Jones' had to take out a second mortgage, how awful!"

Yes, advertisers are very clever these days. They've created terms like "line of credit" and "home equity loan" that don't sound like what they really are: Second mortgages.

It's not only houses too. How many people would lease cars if the dealership said, "Rent this car"?

The genie is out the bag and I truthfully don't see us going back to "frugality" until exhausting all other possibilities. Sort of like everyone giving up their computers and going back to typewriters. ain't gonna happen.

I know a number of people who are very frugal. They may be small in number, but they are solidly grounded in old-fashioned ideals when it comes to money. But then, I still own a manual typewriter, so what do I know?

 

[cornflake]

I'd agree . . . if I didn't teach in a public school. This is an all-inclusive institution, and we serve families from all walks of life: Those who literally live in mansions and those who live in genuine poverty. One number I can state with confidence: No school in our county has 50% of the kids on free lunch.

Great. Except there are tons of schools across the nation in which there are near 100% of kids receiving free lunch. Because none in your county are kind of proves my point that it's not about the statistics being off, but about people not realizing that because they don't see people in these situations or see them in number doesn't mean they don't actually exist.

 

[crashbb]

That's totally not what I was talking about, though. Booking a trip on a credit card and then paying it off is just easier a lot of times. I'm talking that most people I know my age (mid 30's) would just charge the card and pay it off whenever they could manage, and the fact that I'm not willing to do that shocks them.

Okay. I wasn't sure - there are some people who seem to feel that any use of a credit card is evil and that everything should be paid with cash.

 

[Muushka]

Okay. I wasn't sure - there are some people who seem to feel that any use of a credit card is evil and that everything should be paid with cash.

Not me! I earn too much $$$ by using them! (and no, I don't pay any interest).

But if you pay high interest rates, yup, that's evil!

 

[kydisneyfans]

Not me! I earn too much $$$ by using them! (and no, I don't pay any interest).

But if you pay high interest rates, yup, that's evil!

Same here-got my $440 rebate check from Chase yesterday from 2nd half of the year spending, paid $1.99 a gallon for gas at Kroger from buying gift cards for points, and used the gift cards for Christmas shopping.

The evil in it all............

That being said, 45K goes a long way in my part of the world, but wouldn't pay my rent in the northeast. I hate these surveys.

 

[nunzia]

Great. Except there are tons of schools across the nation in which there are near 100% of kids receiving free lunch. Because none in your county are kind of proves my point that it's not about the statistics being off, but about people not realizing that because they don't see people in these situations or see them in number doesn't mean they don't actually exist.

I live in a poor state in a poor area of said poor state. At some schools in our town EVERYONE had had free breakfast and lunch regardless of income. Some type of program for low income areas..now, this was a year or so ago and money may not be available for that anymore. In the summer places are set up all over town for free lunches and brakfasts for anyone under 18 no questions asked. I do not want to see children suffer and go hungry, but when did it change that other people were responsible for providing meals, coats, school supplies, toys etc for your kids? I thought that was a parent's responsibility? As I've said before, yes there is true need, and equal amounts of selfishness and stupidity that leads to need and another equal part of laziness and scamming that is a way of life. I'm probably exposed to the scammers more than most and my daughter who is a labor and delivery nurse has the stories of the Moms constanly popping out kids from different baby daddies on the governemt dime( pregnancy medicaid, WIC, food stamps, housing and utility assistance, medicaid for the kids..on and on and every kid just ups the payments). She recently had a gal who was 24 just have her 5th kid..how about the government only help with the first 2 and if you choose to have more then you are actually responsible? How about after 2 they cover a tubal? I also have a son who is a cop and we don't even need to go there with what he sees. The other day a gal came in to get her assistance check for utilities, rent, whatever. She come in very nicely dressed, hair done, fingernails fancy, talking on a much better cell phone then I have. She is laughing and chattering away, gives me the card that states she can get her check, I give it to her, she flashes her ID, barely looks me in the eye and mouths "thanks" as she takes her freebie and off she goes still chatting on the phone. Wow..entitlement issues? Live in my world.