squeaking by…
Can someone please tell me why the Washington Post thought that this story ("Squeaking by on $300,000") deserved to be on the front page of Sunday's paper? It's not a terrible story, not like the Times' claim that pot bellies are hip, but I don't think it qualifies as serious news by any standard.
It's clear that almost everyone the reporter talked to was totally unwilling to be quoted for the record. That probably showed good judgment — it's hard to imagine any possible upside to being featured in this story. It made me wonder what Steins was hoping to get out of it, since she struck me from the article as being more or less sane and having some sense of perspective. She has to have known that she's going to get trashed by a significant share of the people who read the article.
Moreover, it's not at all clear to me that Steins is really all that affected by the recession. Ok, so her bonus is less. But if she's pulling $50,000 a year out of savings to make her budget balance, it sounds like she'd still have a hole of $30,000 to $40,000 even with her usual bonus. Her real problem is that she and her ex-husband bought a house that she just can't afford on her own, even with very generous alimony/child support. And she bought him out in 2006, close to the peak of the market. If the real estate market was better, maybe she'd downsize and get out of the hole. But it also sounds like she doesn't want to move her kids out of their school.
Fundamentally, I thought this article mostly illustrated the logic to the 60 percent solution. If your fixed expense are such a high fraction of your income, you can squeeze the little things to death — not buying a fancy cell phone for your kid, going longer between hair colorings — and it doesn't fundamentally change the big picture. Unless Steins has enough savings to keep pulling out $50k a year for the next decade, she needs to bite the bullet and go after the big things — the house, the nanny, the second car.
August 17th, 2009 at 9:23 pm
I thought she probably wanted her church group to think well of her for ventilating the problems. But, yeah, I’m with you: any day I’m not on the front page of the Post is a good day. dave.s.
August 17th, 2009 at 11:41 pm
OK, I’m starting to suspect that I’m the only one, but I liked the story. I think that she was courageous to talk about their money issues (though, I also agree with Elizabeth that she’s in denial about how the lifestyle can be sustained, unless she has a 2nd earner in the wings, a reliable trust fund, or the “and bonus” really means a nearly guaranteed extra 200K).
Many people seem to be complaining about the ways in which are money changes the “squeaking by on 300K” (a caveat — they seem like they are divorce, rather than economy related) change how she lives and her expectations for life are trivial or are unimportant. But, we could make the same complaint about the jobless woman who has lost her house and clothing, but has a condo with a view to bunk out in while she tries to wait out the recession. And, even when we’re talking about the family that’s having a hard time stretching their food to feed all their children, we can still remember the orphans in the Indian streets, warming themselves on fires of garbage and begging for food.
Deprivation has a psychological component, and it’s not wrong to talk about it. I’m not planning on sending any money to help out the family whose kids have to do without the iphone this year because money is tight. But, I can send sympathy for anyone who life has changed materially and unexpectedly.
August 18th, 2009 at 12:11 am
There was a similar story in the NY Times several months ago as I recall, though the couple wasn’t as wealthy. It seems to me a story like this is meant to say, “The rich are suffering, too.” I do think it’s good to see people being open about money, but maybe the 6-figure folks should understand more about the finances of the 40k folks.
August 18th, 2009 at 8:22 am
Is it not a problem for her employer that she’s advertising her salary in the Washington Post?
August 18th, 2009 at 11:33 am
Dear Elizabeth,
This is Suniya Luthar, Prof at Columbia’s Teachers College. I’m writing not about this particular blog but about one you’d written many moons ago about my survey http://www.MomsAsPeople (http://www.halfchangedworld.com/2006/12/surveys.html); forgive me but I’m not sure how else to contact you. I would very much like to update you on where this work has gone (a book in preparation, “Who Mothers Mommy”); would also love to share with your readers how the survey has changed over time given their very helpful feedback. I do hope to hear from you.
Warm regards,
Suniya
August 18th, 2009 at 1:57 pm
I think her income woes are more the result of the financial effects of divorce, not the recession. Many people who divorce just can’t keep the same lifestyle in two different houses.
August 18th, 2009 at 5:39 pm
If you can keep the same life style in two houses, you were living below your means in the first place. One of the big reasons we are in the trouble we are in today is that almost no one was doing that.
August 18th, 2009 at 6:54 pm
I guess I did feel sorry for her and am very glad not to be her (neglected plumbing issues–ewww). There’s no way she can afford that house. The property taxes alone must be eating her alive.
August 18th, 2009 at 10:07 pm
I too have read a number of articles in The New York Times about how the wealthy Manhattanites are suffering. I do have a little sympathy for any single parent struggling with the recession. One thing that was strikingly repetitive in some of the articles I have read was that many of the wives were either uneducated or long-term unemployed and a dual income was not an option as the banker husbands were out of salary. The first to go is always the nanny and the expensive beauty visits. The woe is me I am a “poor rich person” makes me think that people are still in the mythical mindset that they should not have to do without the luxuries. The lack of ability to sell a home is hitting everyone regardless of income level.
November 14th, 2009 at 7:45 am
So here’s the LA Times suggesting that the best we can hope for is a decline of the dollar relative to other currencies: http://www.latimes.com/business/la-fi-petruno14-2009nov14,0,342594.column
and that the other big possibility is nominal wages going way down. I see kids getting out of school now, from decent colleges, and finding a very tough time – and I am in DC, one of the least worst parts of the country. It’s all anecdotes, but I look at the Craigslist ‘housing wanted’ ads, and I see mid-career people wanting to be servants in the houses of others for a place to stay (‘help with the kids while I get on my feet’). So I expect more articles like this, about folks who thought they were securely in the middle and upper middle, and getting dislodged.