Maxim Shemetov / Reuters

The financial woes of Neal Gabler, as he tells them in the May issue of The Atlantic, underscore one simple fact that should never be overlooked: Although money mistakes often arise from innumeracy or simple planning errors, they at least as frequently result from more intimate reasons of psychology and our personal histories.

How we manage our money is a surprisingly freighted matter, touching our relationships with those closest to us. Issues of control, trust, closeness, and boundaries lead us astray and hinder transparent planning. Money troubles also humiliate in a way few other things do. I see this among my students, who share Facebook passwords and old-boyfriend secrets with their partners, yet remain close to the vest regarding their Visa bills. I see that among my colleagues, who are embarrassed to frankly address their underwater mortgages or to get help with their underfunded or poorly invested 401(k)s.

The Nobel Prize-winning economists George Akerlof and Robert Shiller, in their entertaining book Phishing for Phools, note that pop psychologists were onto this long before the serious economists caught on. Akerlof and Shiller cite the example of financial guru Suze Orman. As one fan told them, “Suze Orman is not about the money. She’s about the people.”

Orman’s kitschy investment advice is dreadful when viewed through the lens of any sensible investment theory. Yet it is often helpful to millions of people. Why? Because it speaks to the reality of how many of us lead our financial lives. When she reminds people to stay out of debt and live below their means, she warns against the head trips and relationship traps that lead many into life-altering financial trouble. She might have saved Gabler much heartache with some timely advice.

Gabler calls himself financially impotent. The reader can sense what he means. An outwardly successful person, he faced a series of worsening family financial troubles. His increasing difficulties keeping up appearances led him into even deeper financial trouble.

To take the most obvious example, Gabler’s wife had once worked as a film executive. She left the paid workforce to raise her children. By the time she was ready to return, her old career was no longer an option. Gabler didn’t want her to lower her sights to take a more menial position, even though this was financially disastrous by any clear-eyed accounting:

[W]ith my antediluvian masculine pride at stake, I told her that I could provide for us without her help—another instance of hiding my financial impotence, even from my wife. I kept the books. I kept her in the dark.

Many couples experience similar difficulties.  Writing in the American Journal of Family Therapy, Joan Atwood notes that “couples would prefer to talk about sex or infidelities rather than how they handle family finances or how much money they earn.“ Financial challenges provide a common reason for people to pursue marriage and family therapy.  At the other end of the spectrum, a profitable segment of the financial services industry exists to help wealthy individuals navigate and discuss awkward financial practicalities with spouses, children, and other family members. There is even a Financial Therapy Association at the intersection of financial planning, mental health, and relationship therapy services.

Much of what Gabler experienced was worsened by the psychic turbulence of downward mobility. Downward mobility is especially hard. My own family experienced a financial crisis when my mother-in-law died suddenly and her son, who lives with an intellectual disability, needed to move in with us. My wife needed to leave the workforce to care for him. That foreclosed the possibility that we would become the dual-high-salary affluent couple we expected we would someday be. We experienced real challenges and some heartbreak. Yet we never needed to sell our home or remove our children from school. We never came down in the world in ways visible to others. That would have been yet harder.

For Gabler, the shame of that downward crash seems to have pushed him away from the counsel of others. Had he not tried to hide his desperation, he might have slowed his descent. He might have discussed the challenge more frankly with his wife. He might have sought help, made a reasonable plan. Over time these became worse than they needed to be. When a person struggles through his financial turmoil alone, isolation begets despair, and mistakes too.

Honest financial communication is especially necessary when one considers another reality reflected in Gabler’s story. Serious financial problems can’t be addressed by nibbling around the margins. You can stop going to Starbucks or taking nice vacations if you have a professional setback or a family member falls ill. You can’t stop paying your mortgage or your taxes. These big things (not to mention your children’s college tuition) matter much more than the small things you can easily control. Addressing the big things requires genuine life changes, with their accompanying tradeoffs, admissions, and disappointments. They bring important implications for everyone involved, and, as a result, require that everyone—certainly both spouses—be involved.

Gabler provides few hard numbers in his confessional. So I’m not precisely sure what happened. It’s clear that he over-extended himself in ways that now look foolish:  

I never wanted to keep up with the Joneses. But, like many Americans, I wanted my children to keep up with the Joneses’ children, because I knew how easily my girls could be marginalized in a society where nearly all the rewards go to a small, well-educated elite. (All right, I wanted them to be winners.)

This passage won’t win Gabler much sympathy. After all, he enjoys myriad blessings. He is a prominent writer who has won prestigious prizes. He has extensive TV credits, is the author of several respected books. The safety net provided by his parents’ wealth propelled his daughters to impeccably credentialed professional lives. He received help in the way of a loan modification. And perhaps his best luck of all: He is apparently healthy.

But even with all those blessings, he still made serious mistakes, which were compounded by bad luck. Indeed, I suspect that the gap between his social and financial status made such mistakes more likely. He over-invested in real estate, and then got stuck with two mortgages in the insanity of the New York co-op economy. He took a financial hit over a missed book deadline.

So now he counts his pennies. He hasn’t taken a vacation in 10 years. He eats out once every few months. He drives a 1997 Toyota. These lifestyle changes are unavoidable. They are nowhere near enough.

Gabler quotes reams of national economic statistics in an effort to explain his situation, noting that most Americans possess meager assets beyond the family home. Indeed the Federal Reserve’s 2013 Survey of Consumer Finance indicated that median financial assets held by American families are only about $21,000.

Gabler’s real problem is more specific than a stagnant national economy. Like the displaced steel worker, he had the bad luck to work in an industry that has contracted if not collapsed. The glossy media economy no longer generously supports non-superstar, respected senior figures such as himself.

So Gabler is making far less money than he would reasonably have predicted from the vantage point of 30 years ago, before the internet tore the heart out of the old media economy. Add a little age discrimination (widespread in both serious journalism and entertainment) against both Gablers in their respective realms, and you have a family financial disaster. Had Craigslist, Huffington Post, and the rest arrived 20 years later than they did, I bet Gabler would have been fine, despite his gambles and blunders.

By his own admission, Gabler is an atypical, rather unsympathetic protagonist in any story of American economic woe. I fear his essay will receive a cruel reception. Yet he is not alone. Millions of people get sick or are otherwise unlucky. They earn low wages. They screw up. They fall prey to larger economic forces. For any or all of these reasons, millions of us will approach our senior years as the Gablers are now doing—with meager financial resources. His choices may have been idiosyncratic and even foolish, but there is a common tale underneath it all. His errors and misfortunes underscore the necessity, the difficulty, and ultimately the fragility of prudent financial planning as a foundation of stable middle-class life.

Thank goodness for Social Security. Many of us, even famous writers, could never survive without it.

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