The dirty little secret of people who are broke: They’re broke

When the Federal Reserve issued a report a month or so ago that nearly half of Americans couldn’t come up with $400 if they had to, we count ourselves among the people who questioned how that could be? We’re talking middle class Americans who should be able to put aside $10 a week for a year.

Neal Gabler, a pretty successful writer, admitted as much in an April article in The Atlantic when he copped to being broke most of the time. Why? Because he’s financially illiterate, he said.

He appeared on PBS NewsHour last evening. It’s his fault, he acknowledges. But maybe things could be better, he said, if we — especially men — were willing to talk about their financial struggles.

Brian the butcher is my friend. He’s a wonderful, easy guy to talk to.

And gradually, over time, we would start getting our financial situation, very, very rare, particularly among men. And I remember one day especially, this was one of those periods where I didn’t have the $400 — and, unfortunately, they come all too frequently.

And he said, I’m going to tell you something. He said, I am in the same situation. I have got this expense and that expense. If anybody tells you that they’re sailing through, they’re lying.

A lot of people aren’t going to feel sorry for Gabler, or a lot of people like him.

But here’s the thing: Gabler acknowledges that one reason for his predicament is that he “followed his bliss.” He became a writer.

It’s a question that grads and their parents face every year around this time. Should we try to make a living at what we love? Or should we just concentrate on making a living?

A musician on the PBS story on Gabler offers a common perspective.

I’ve struggled a LOT with this article since I first read it. As a musician, I have lived his life. But I always -knew- I was likely going to suffer in retirement for indulging my ‘bliss’. I took care of my kids, paid my taxes. Only -I- will ‘suffer’ for my career choice. I could argue that society ‘should’ value the arts more, but it doesn’t. Fine..

I don’t blame Mr. Gabler. I think he is simply laying out his situation. I don’t think he’s whining or asking for sympathy. I think he was surprised that so many people are in his state and he’s bringing it out in the open so we can discuss it.

It’s like Global Warming or immigration. People may not believe in it. Or think it’s somehow ‘wrong’, but it is what it is. And we -will- have to deal with it. There will be too many boomers in dire straits to just say, ‘screw em all for being irresponsible.’

I will say this…

My generation was taught… and taught our kids the whole Joseph Campbell deal: “Follow your bliss.” Well, Joe… wherever you are… YOU WERE WRONG. It doesn’t work. It only worked for your generation in that one brief post WWII golden age when society had the dough to indulge that, My dad (who always thought it was irresponsible) was correct. It’s irresponsible. Dad? I was wrong. 😀

Was he?

Another commenter suggests a societal culprit.

Unmentioned was the fact that our society is rigged against anyone who wants to pursue a career that results in periodic unemployment; unlike most European countries, we have virtually no safety net. Medical care is mostly still tied to a job instead of guaranteed as a minimum level of support for everyone. Instead of criticizing Mr. Gabler for his choice to become an author we ought to be examining the fact that we live in a society where any one of us could be unemployed tomorrow and facing difficult choices. Thinking that rugged individualism can result in security is an illusion. And health care in America is a disgrace: people with health insurance go bankrupt with embarrassing frequency. The whole point in buying health insurance is to put in a small amount of money into a pool so that you will have money to pay for your own care when you get sick. The biggest pool is everyone, so why don’t we get smart and either get universal health care or else regulate insurers so they don’t get hugely rich by collecting premiums and then refusing to pay for necessary care?

Mr. Gabler correctly points out that our society can’t decide whether it wants to be a society or not, and that the destruction of the middle class has left many among us with marginal means. Our unwillingness to address these problems will create many more and cause tremendous harm to our society. In my own lifetime we have gone from having families with one person in the workforce to both parents having to work and even then barely getting by. CEO’s in one year make enough money for several lifetimes while their employees barely get by. Unions have been destroyed along with the manufacturing sector, so it’s no longer possible for someone with a high school education to have a good job. On top of that, many people are contract employees, with no real tie to their employer, no benefits, no health insurance, and many of those are living just like Mr. Gabler. We need to pull together for the good of us all.

“Following passion comes at a price,” another commenter said.

The discussion reminds me of one I had in Ely several years ago when I was doing the NewsCut on campus series. At Vermilion Community College I met people who wanted to be outdoorspeople, bison farmers, ecologists, and wastewater treatment plant operators. That was their passion.

After my interviews, I met with the English Composition class. There, Carlie stood up and said she wanted to be an artist, but her family had convinced her there’s no money in it. So she had switched to the wilderness program at Vermilion. I have no idea if there’s good money in the wilderness nor whether Carlie has ever reconciled the two. In fact, I don’t know whatever happened to most of the people I met, so I choose to think that when their working days are over, they won’t regret the choice they made on how to spend the only life they’re going to have.

Related: The Middle Class Is Doing Okay: No Need for Gloom and Doom (National Review)

  • Al
  • PaulJ

    I wonder what percent of adults in the world can get $400. Now that the wall is down, all the kings horses and men won’t be able to make America great again.

  • MrE85

    I’m doing okay, but I know people who are in this situation.

  • jon

    I’d add two possibilities:
    1) Being poor is expensive. I don’t pay fees to bank, because I have enough money to not pay fees to bank. I know people who pay fees to bank, because they don’t have enough money. This is crazy, and it makes it hard to get ahead. I don’t pay late fees on my credit card, I don’t pay interest on my credit card, I can avoid paying those fees because I have the money to do it, I don’t need to wait until payday to pay my bills.
    It’s hard to get a head when being poor is so damn pricy.

    2) We’ve been encouraged to live beyond our means. They say in the article that “that nearly one-quarter of households making $100,000 to $150,000 a year claim not to be able to raise $2,000 in a month.” People who have money spend money, they’ve got recurring bills taking up $100-$150k a year…
    It really comes down to decreasing your cost of living (preferable without decreasing your standard of living) and increasing your income (preferable without increasing your cost of living).

    I am astounded at the amount of money people spend on things. Things like banks that I get free, and things like houses and boats that they can barely afford…

    As for following your passion, my father told me to find what you love, and then get a job to pay for it.

    My father loved working on cars in his youth… he became a mechanic, and he learned to hate turning wrenches, it broke his back, gave him carpel tunnel, and he hasn’t turned a wrench on purpose since he retired (except for those little plastic ones with the grandkids… he loves that stuff.)

    I’m pretty sure you posted in here once Bob “Teach your kids to love flying, and they’ll never have money for drugs.”
    Teach your kids to love something, anything, then tell them to get a job to pay for it.

    • Another option: Marry wisely, so you can do what you love.

      • Jack

        Part of marrying wisely is to make sure you don’t marry into a mountain of debt.

        Having living in both the first and third worlds, I can say that my colleagues in the third world (as well as myself) were so much more happier with the little that we had than the vast majority of those I know in the US.

        Somewhere we were all sold a bill of goods that having more makes one happier. That is so not the case. The happiest I’ve been is when I’ve been able to get out of debt. Having that savings cushion has kept the stress somewhat mitigated during times of unemployment and health issues (thankfully not happening at the same time).

        Do I make a ton of money? No. Do I do what I enjoy? Yes. I started out with really nothing but lived under my means (and still do). It’s given me freedom to do things I want to do like volunteer.

        Financial literacy is part of the solution but a major culture shift is really needed. We don’t all have to keep up with the Jones.

      • John

        my dad once told me “It’s as easy to fall in love with a poor girl as a rich one.”

  • Erik Petersen

    The peril is real for sure, but I don’t think it’s all bad these days

    The contemporary corporate or even tradesman career trajectory I think offers more prosperity and security than commentaries of that stripe acknowledge. In this state, median IT worker earnings are about $100k. Shoot, I earn more than $100k, and I see a lot of my peers earning over $100k… its like the democratization of $100k jobs, everyone’s doing it….

    And that money don’t go far really. You properly withhold for taxes, 401k, medical and you are down to something like $50k in paycheck deposits a year. That is not quite enough to run a middle class household and enjoy middle class prosperity, not at all, you have shortfalls in places, you scramble.

    Most of the time I am not liquid to the tune of $400, as my money is allocated. Am saving in 401k, but you can’t get at that. If I need $400, I do sell stuff at times. I think that gets a bad rap. You have some assets (which you may not need and will not ‘appreciate’), you trade for cash…. You make choices, you prioritize, it’s good.

    I do think ‘following your muse’ can be terrible advice. It’s OK if you’re single and in your twenties. You get past that and haven’t made it, do other work that may be boring and kinda unfulfilling but pays decent. That’s what adults do.

  • Anna

    We still need writers, musicians and artists whether they can save ten dollars a week for emergencies or not.

    Not every one of them will become in high demand like Prince or The Beatles, like JK Rowling or Neil Simon, like Andy Warhol or Picasso.

    However, they contribute invaluably to enrich the lives we live on this planet. They allow the rest of us to escape, if only for a short while from the responsible, well-paying jobs we hold down that pay the bills.

    Life would be awfully boring without fine arts and crafts to browse, a good book to lose yourself in in front of the fire during a winter blizzard and the stereo or radio blaring through the house during those monotonous chores we procrastinate about on a regular basis.

    More power to those who follow their bliss.

    We need you!

  • lindblomeagles

    What’s really difficult is avoiding your bliss, getting that job you think will pay the bills, only to find out THAT JOB is no longer needed by society, and you’re not skilled to do anything. My colleagues and I are at the store now. Most of us couldn’t really save up then either, when we thought the now invisible job was going to lead some place. Some of us begrudgingly accept the 20 years are lost and we’re powerless to change it. Others of us are trying to find the same SILK road you describe Bob, that road that will pay the bills and allow us to save something, ANYTHING, for tomorrow. I, on the other hand, can’t make up my mind, sure thing (or so they tell me) or my bliss (amounting to a lot of hard work, several unanswered questions, and a long slow road ahead). Those of you who made IT following your bliss, count yourself blessed. Those of you who made it paying the bills, thank your Heavenly Being. Those of you who are like me, educated, but still screwed, by both, good luck to you and please wish the same for me.

  • Gary F

    And many, not all, don’t prepare their own food for meals, drink plenty of soda, buy coffee at coffee shops, drink bottled water, have more than one tattoo or piercing, have professionally painted nails, have a payment to make on a large flat screen TV, boat, or motorcycle, take an elaborate vacation, have the newest cell phone with a large data package, etc.

    Some folks don’t and won’t have that kind of money, but I wonder how many people on the fringe could improve their future with some basic lifestyle choices?