A young reader describes how secretive and unreliable her father has been when it comes to finances:
I’m only 23 and have yet to experience any financial disasters, but I wanted to share the child’s point of view on what’s described in Neal Gabler’s article. He mentions being lucky enough to avoid sabotaging his relationship with his daughters despite his financial fragility. For my family, this has not been the case.
We fit Gabler’s description of financial peril pretty much to a T. My father raised me as a single parent from age 4 to 9; my stepmother provided a second income for a few years but then left her job to raise my two stepbrothers. My dad put himself through night school to become an architect when I was very young. We moved to Florida for his work just before its housing bubble burst and he was left scrambling for a job to pay for a new four-bedroom house that we perhaps didn’t need as a family of three.
Throughout my high school years we bounced from rental house to rental house as the owners we rented from kept being foreclosed on, incurring huge moving costs for my family. I didn’t find out until I applied for college financial aid that my family was on food stamps.
Extended family members told me my dad was struggling to keep the lights on—and indeed, our electricity was shut off once when I was in high school. Yet in my senior year we lived in a three-story townhouse with an elevator. When I got my financial aid package to an Ivy League, I got the largest package they offered because my father was now supporting a family of five on an income of less than $60,000.
I worked for a newspaper the summer before I started college and never saw the money I earned because it went to a bank account my father controlled and he “never got around to” transferring it to my personal checking account. Every semester was a scramble to cover my (relatively small, for Columbia) tuition bill in time for me to register for classes the following semester.
My father eventually resorted to lying to me about his ability to reimburse me when I covered parts of the tuition bills myself (I worked all the way through college) and convinced me to take out a student loan in my final year that he said he would pay back, only to never mention it again once I graduated.
Whatever bitterness is detectable in my tone here comes not so much from having to pay for these things but being repeatedly lied to about the reality of the situation. No matter how many times I asked my father to be straight with me about his finances, he kept promising to visit me in New York and to help me pay for life expenses only to never fulfill these promises.
After wearing down my trust for years, my father put the final nail in the coffin when I had a medical scare. I received a diabetes diagnosis just as I separated from a domestic partner whose insurance I was sharing, and I called my father crying because I couldn’t afford good enough insurance through New York’s market to deal with what was sure to be a slew of new expenses. He told me to get whichever plan I needed to ensure coverage and he would split the cost with me.
But after I bought the plan, he reduced his offer to $100 a month (for a $360/month plan). Not even that contribution ever materialized. Thankfully, the diagnosis was erroneous, but I kept paying for that insurance until I got a job with a better plan, which took nearly a year.
The result of all this is that I am extremely thrifty, religious about saving despite my high living costs in New York, and pretty much totally unwilling to go to graduate school or pursue a creative career path in the manner Gables describes, because I have seen what debt does and want to avoid it at all costs. Knowing the chronic difficulties of accumulating wealth in the African-American community has made me even more cagey about spending.
Thank you for the article. I’ll be sharing with my dad. (I’ve already shared with my social network and encouraged them to come to me for budgeting advice. ;)
That’s what this reader did, in part, and she’s not ashamed of it:
I didn’t realize how lucky I am until I read Neal Gabler’s article, “The Secret Shame of Middle-Class Americans,” about the financial insecurity that apparently plagues most of them. At this moment I am a 46-year-old single woman who could indeed come up with $400 for an emergency, or even $2,000. But to reach this place of relative security, I broke all the rules and violated just about every norm of stereotypical middle-class life:
I never married and never blended finances with a romantic partner.
I never had kids.
I never bought a home; I’ve rented apartments for 25 years.
I never bought a new car; I buy cars directly from previous owners and pay in cash. (The most I’ve spent on a car is $4,800.)
I financed college and graduate school on my own with a combination of scholarships, savings, loans, part-time work and careful use of time-limited 0% APR credit cards. Although I’ve proven piss-poor at earning big salaries, I am absolutely stellar at paying off debt, so my credit rating is in the high 700s.
Even after a Master’s degree, I didn’t earn enough at my primary job to cover rent, bills, and educational debt, so I took on a second job in my 30s. And that job was escorting. I had sex for money over a period of seven years.
And I make no apologies. Per hour, it’s still the highest wage I’ve ever earned. Rarely has a job been so uncomplicated or a transaction so forthright. I have self-defense skills—a must if you’re doing something as potentially-dangerous as independent sex work—but I never had to use them. Nor did I feel demeaned by the work or by my clients; if anything, it felt like I was taking advantage of them. I was paid ridiculous sums to do something I already enjoyed. Frankly, my only regret was that I didn’t think of it sooner!
Today I feel a great deal of freedom and relatively little financial worry, but that’s largely because I’ve said “no” to the things we’re supposed to want—home ownership, children, marriage, shiny consumer goods—and said “yes” to things we’re supposed to avoid. So I can’t help but wonder: Who made the rules that say owning a home is better than renting, new cars are better than used, and an exorbitantly-priced private-school education is better than a public college degree? Who benefits from our continued belief in these rules? Clearly, it’s not us.
I’m in my late twenties. Growing up, I was much wealthier than most of my peers—both of my parents made about $100,000. They covered my out-of-state college tuition, let me stay at home while I took unpaid summer internships and, when I got a postgrad job, helped me pay my half of the rent for the city apartment I shared with a friend. All this to say, even though the deck seemed stacked in my favor, I’ve suffered through my fair share of financially impotent moments.
I was working as a contractor for a big tech company and shelling out $40 a month for birth control pills, since the contracting company only offered us a few horrible, high-deductible, high-premium plans and I wasn't eligible to stay on my parents’ policy. To save money, I stopped using birth control.
Weeks later, I started a new relationship and suffered a couple of pregnancy scares. Ironically, Plan B costs the same as a month of pills.
A year later, I was making $25,000 in a salaried position, and my new health plan almost completely covered IUD insertion. I made the leap and had the procedure done.
But little did I know, my company had just switched policies and my procedure had taken place on the one day of the year we were between policies and without coverage. I got a bill in the mail for $1,300. At the time, I was stretched thin between expensive rent, high public transit costs, and my broke boyfriend, who was in grad school halfway across the country and needed my help with groceries and student loan bills.
As I paid off the IUD procedure in small monthly increments—it took me almost a year—I suffered terrible side effects: weight gain, mood swings, cystic acne, depression. I had the IUD removed six months before I finished paying it off.
Even though my fiancé and I now make a combined $85,000 and are in the best financial shape in the history of our relationship, I haven’t used birth control—or visited a doctor—in years.
That’s how this reader begins her personal indictment of the infamous energy company:
Neal Gabler’s article will stick with me for a long time. I know the feeling of being down to your last $5 while carrying a full load of middle-class debt that was hard-earned.
In the spring of 2002, my husband and I were married for four years, had a modest new home, and had just adopted twin babies from Russia. We watched the nightly news in horror as the Enron scandal started to devour the company he had been with since college, Arthur Andersen. At the time, Lou Dobbs was the host and our hearts thudded as we watched, along with 20,000 other employees, the company go down in flames.
My husband worked in Pittsburgh on the business consulting side of Arthur Andersen. The responsible parties worked in Houston on the accounting side of the Enron project. No matter. The SEC went whole hog after everyone and everything.
We, like the author, borrowed from my husband’s 401k for a life event. In our case, the adoption (which we hadn’t anticipated, but we discovered we were diagnosed with infertility) cost the entire lot. We were both 34, so replenishing the 401k seemed absolutely plausible over time. My husband was on the cusp of making partner.
Then, literally in a span of weeks, he had to pay back the entire sum for the adoption ($25,000) and was unemployed.
I don’t think my husband ever emotionally recovered from the pain and humiliation and helplessness of having the rug pulled out from under our feet. I know we never really financially recovered either. We had to borrow money to pay off the money we owed and then use credit to piece together life until he started a new job.
Then, ironically, I got pregnant.
Years later, in 2008, his world crashed again because of the economy. We were underwater on our house and had to short sell it. Business consultants and hundreds of other professions have literally no job security. We have no unions, we have no pensions, we have no voice.
Oh and Arthur Andersen was exonerated from any wrongdoing in the Enron scandal years after it was put out of business.
The fact is, no matter how much you plan or try to do the right thing, there are disasters that will crush you financially—but you still open the door to your lovely house and drive your car and put on your suit and hope that the shame of your situation is never discovered.
As the Internet increasingly becomes TV and the written word continues to recede, it’s so gratifying to be able to feature long but captivating stories written by Atlantic readers. That’s especially the case for our next contributor (who prefers to stay anonymous because she’s involved in a legal dispute). Her story involves unsupportive and judgmental parents for whom she ultimately comes to the rescue, a heartbreaking tragedy with her husband, and the many sacrifices she made for her children in the face of hardships tied to the housing bubble, soaring student loans, and a dying newspaper industry, where she worked for years. And you can tell she was a professional writer by the quality of her prose:
I winced and almost stopped midway through reading Neal Gabler’s “The Secret Shame of Middle-Class Americans,” it was so painful. And so true: I just turned 60 and am looking forward to an impoverished retirement. I kick myself over and over again for a series of stupid mistakes that was essentially my life. I’m college educated and thought I was pretty smart—heck, I studied economics as an undergraduate—but obviously I wasn’t smart enough to avoid bankruptcy and near poverty.
Some things: I’m an Asian American woman who grew up in a blue-collar household. My father was an auto mechanic; Mom was a secretary who hooked a state job with benefits and good medical insurance, something my father didn’t have even as a union employee.
When I announced in high school that I wanted to go to college, they scoffed. Girls didn’t need an education, they said. They get married and their husbands support them while they stay home and raise the babies. (This was a common belief among traditional Asian families.) “I’ll show you!” I shouted.
After high school I attended community college for almost free, as we could back in the ‘70s in California. I then received a Cal Grant scholarship and transferred to a UC campus. It was a struggle: My parents were not supportive of my efforts, and I discovered there was a real disadvantage to not coming from a background where one’s parents were college graduates and who could guide one through the ropes of university life.
I went over the two years allowed me by the scholarship to get my bachelor’s degree, but I was extremely proud. I got out of school without owing a penny to anyone, unlike my three children. (More on that later.)
From there I went into journalism and got a job working as a reporter at a daily newspaper in the Midwest. I met my husband, got married, and very soon after had our first child. I quit my job to look after her, reasoning we’d save a fortune in child care. Then we had another child, and another.
Then we found out my husband had a slow-growing benign tumor on the brain stem. After thousands of dollars in expenses not covered by our HMO, living on disability and unemployment benefits, and very generous help from my husband’s coworkers and our church, he died, leaving me a young widow with three young children.
Social Security survivors’ benefits and other government aide programs kept us afloat and in our suburban home. (People who heap scorn on those who receive “welfare” have no idea that many of us are families who don’t do drugs while buying luxury cars and home theaters on the taxpayers’ nickel. Our children attend school right next to theirs and they would never see the difference, either in appearance or in school performance.)
I went back to work part time and we lived frugally but well enough. If we went on vacation, it was on camping trips at state parks and road trips to see nearby attractions. (We could drive to Mount Rushmore in a day-and-a-half and stay at nearby campgrounds for a modest daily fee.) I never remarried, partly because I did not want to lose widow’s Social Security benefits, partly because I’d seen too many friends' disastrous experiences with step-parenting.
That low-budget idyll ended when my oldest was accepted at a private college on the West Coast. They offered her a scholarship, but that didn’t cover living expenses, dorm fees, or textbooks. How could I deny my child such an opportunity to go to a well-regarded liberal arts school?
So we entered the hell that is college loans. I also made my first major error by draining my retirement savings to help her out, then took out PLUS loans for the remainder of the expenses. Then child #2 was also accepted to a private college on the West Coast. I took out more loans, and she and her sister got jobs to help pay for personal expenses.
When child #3 was accepted at a state college in the Northwest, I sold the house, figuring I didn’t need it anymore since the children were all taking off to start their own lives. Unfortunately, it was the beginning of the Great Recession and the crash of the real estate market. The house sold for less than half of its projected 2007 value, though I was lucky it was enough to pay off the remains of our mortgage.
Also unfortunate was that the money accrued from the sale made it look like I had more income than I actually had at hand. The state college said my son was eligible for less student aid that his sisters, so we ended up paying full ride for out-of-state tuition, dorm fees, and other expenses. To my son’s credit, he immediately got a job and paid for most of these himself, but he and I still had to borrow money for tuition, which seemed to rise 10% or more every year.
I know, I should have made my kids pay for their own education, right? But I was looking back on my own experiences in college with my less-than-generous parents, and I swore I wouldn't make my children go through that.
Speaking of which, I made my most recent and, in my opinion, most fatal mistake. While working two jobs to support myself and my children, I began getting pleas from my father to come back and help with my mother, who was evincing signs of dementia.
My relationship with my parents had been poor since college; I’d had little contact with them, especially since they thought I was an idiot for raising my children alone in a “strange” city. (Actually, raising my children in the Midwest was a great decision, since living expenses were relatively low and the public education was very good.)
After my daughters came out to visit their grandparents one Thanksgiving, they reported that “Gramma and Grampa” were living in horrible conditions and really did need help. I went out that Christmas and discovered my parents’ house was piled floor to ceiling with shopping bags filled with junk and unopened mail, and the kitchen and living room were infested with insects and mice. My mother, who’d always done the family bookkeeping, couldn’t even carry on a five-minute conversation, while my father, whose reading and math levels were barely at the sixth grade level, couldn’t tell the difference between the phone bill and junk mail from a mobile phone company.
So I sacrificed what little financial stability I had to look after my parents. I sold off everything, quit my job(s), and moved in with my parents. I used what little money I had saved to clean and repair my parents’ house. I made them both see their doctor for the first time in years, and tests found that Dad had colon cancer and required immediate surgery. (He’d been living in pain for months but had been too scared to see the doctor; I think he knew what was wrong, but he’s always had a phobia of hospitals.)
All this time, I’d been too busy to look for work locally. On the one time I applied for a position and was invited to interview, my mother became ill and had to be rushed to the ER, where they found out she had an infection that had become septic. The employer declined to reschedule the interview. Why would he, with a glut of unemployed people waiting in the wings?
After our mother died, my relations with my siblings—who had done very little to help out—quickly deteriorated. They hired a lawyer and had me thrown out of our father’s house. At that point I was broke, with nothing in savings, and unemployed. My children rallied and helped support me until I was able to find a job and housing. By then they were all college grads and then some—two had gone on to graduate school and are now successful professionals—so at least some of my decisions did pay off in the end.
Unfortunately, like a lot of women in their 50s who lost professional-level jobs in the recession, I was only able to find a part-time job that pays half of what I made in the Midwest. I shouldn’t even have to mention that the newspaper business, where I started out my career, is done for. Going back to it at this point would be like going back to installing landline telephones for a living.
(When I first moved back to California, I stopped by the offices of a city paper where a friend worked as a copy editor, and I was stunned to find the newsroom a quarter of what it used to be. The huge building was almost empty, and most of the people working there were IT technicians in charge of maintaining and updating the website. I wondered who would be doing investigative reporting or those in-depth features the McClatchy papers had been famous for. Online media is great for “breaking news,” but the best journalism requires weeks of research and fact checking. Investors have no patience for that; they want startups that will generate money quickly while running lean and light.)
I’m still making payments on the PLUS loans, which can’t be discharged by bankruptcy (I tried). I also can’t allow my children to assume payments of the loans; since I took them out in my name, I have to pay them.
When my 2007 Honda Civic with 105,000 miles on the odometer died two months ago, I did not have the $740 to fix it. Again, my children came to my rescue and gave me the money, but it’s mortifying to have to ask them for help again and again.
I had hoped at this point of my life I would be financially independent and looking forward to retirement. Now, I’m just praying my health holds up so I can work at least until I’m 70. After that, I have no idea what my future will look like.
I know this story is very long and don’t expect you to run it, but I felt compelled to share it. I’m sure a number of people will say I was stupid to pay for my children’s college educations and even more stupid to give up my job to help out my parents, who didn’t help me when I needed it. But as Neal Gabler pointed out, it wouldn’t be my life if I hadn’t done those things that made it, such as it is.
Our reader series on financial insecurity has really struck a chord, as your emails continue to stream in. This short dispatch from Amanda is devastating:
My mother died of breast cancer because she couldn’t afford a mammogram, and she was too ashamed to ask anyone in the family for help. By the time her cancer was discovered, it was stage 3 and had spread to her lungs and elsewhere. She had no insurance because she had been fired from her job after 19 years—less than one year before they would have owed her a pension. She couldn’t afford COBRA, and this was before the ACA.
Her medical care and Hospice were eventually paid by Medicaid. A free mammogram not only would have allowed her to see her grandchildren grow up, but it would have saved tens of thousands of taxpayer dollars.
This next reader was also hit with a medical crisis:
The biggest unexpected event happened when my husband had to stop working and go on social security disability due to a health issue. That was six years ago, and he is still unable to work more than a few hours per week. (He’s tried a few times.) Fortunately I have found a job that allows me to work from home, because I’m now a full-time caregiver, but my salary is half what I used to earn.
The cost of medical bills and prescription drugs is like a weight around our ankles. There is one drug that his doctor wants him to take, but at $800 a month it’s not ever going to happen. This is our lot in life for good. His condition is not curable, and unless a miracle treatment comes down the pike, he will continue on as he is now, or get worse.
Aside from the financial stress, it’s taken a toll on his spirit to not be able to provide for his family in the way he feels every man should.
We have stripped everything we possibly can in order to keep us afloat. The only “luxury” we have is that our teen son is in a private school for the gifted. Our local public schools are a nightmare, and we were fortunate enough to receive excellent scholarships that cover almost all of the tuition. For the rest, we took out loans. I don’t apologize for that. Education is top priority in this household. My son sacrifices in every other way due to our financial situation. We feel this is the one thing we can give him to get him started in the world.
I never imagined that I’d be in this situation, but life happens and we continue to try to roll with the punches.
Monica is also resilient in the face of tragedy:
Linda and Neal and others, you are not alone … far from it. I am 63, and I, too, am living from one paycheck to the next.
This century has not been good to me. In 2002, my husband died of cancer at 45, leaving his intellectually and physically disabled child with me. I was a public school administrator who, when my child’s medical conditions exploded beyond the control of medical science, took a five-month leave of absence to care for her.
When I did go back to work, it was not as the principal I had been. I, too, needed health leave: I was stressed beyond my ability to cope effectively with the demands of both my personal and professional lives. By 2008, my health had deteriorated to the point that I took an early retirement and consequently a much smaller pension than if I had stayed to 62.
Then the Great Recession hit, the value of my home plummeted by 50%, the job that was to begin in September 2008 vanished, and I couldn’t find regular work because of my age. I survived by having the pension check go to the mortgage and doing sporadic substitute teaching for utilities and groceries.
I did have a phenomenal stroke of luck when I was offered a fellowship to earn an advanced degree in special education in 2009. I don’t know how I would have survived without that opportunity. I began an entirely new career at the age of 59 and became nationally certified in my field at 62.
I was able to refinance the house at a very low rate (I was financed with a local credit union that worked diligently with and for me), created a rental property in the basement, and continue to have hens in my backyard and grow my own or to shop locally for fresh food.
I can’t afford to move (rents are high), and I can barely afford to stay, but here I am because I am surrounded by a wonderful, supportive community. They peeled me off the sidewalk when I fell down a set of concrete stairs breaking bones in both legs in 2015 and brought me meals until I was able to go back to my part-time work (no paid sick leave) two months later.
I love my tiny cottage, I am near my family, and my neighborhood supports one another, so I live a simple, almost comfortable life here. I will never see Europe, or travel the U.S., or do any of the activities that I aspired to for the third act of my life. The mortgage will be paid in full when I am 88. I still awaken in the night and wonder what will happen if there is an emergency.
This reader’s spouse also got hit with cancer:
As a teenager, I guess I was unusual in that I remember subscribing (in 1980) to a couple of periodicals on personal finance and reading them cover to cover every month. I’m not entirely sure why, I simply wanted to understand money. Those magazines were full of articles on 401Ks, IRAs, and planning for retirement and the like. I took that financial education to heart and applied it as I moved into the work force.
After I married, completed graduate school and began working as an engineer, I took on the responsibility to manage our family’s finances. My wife was content to live within the budget we had set that included saving a significant percentage of our income. I started using Quicken to track expenses, I created spreadsheets to fully understand and budget for the purchase of our first home. I set our asset allocations for our investments within our 401Ks. With each raise, I increased our 401K contribution until we reached the maximum allowable contribution every year and have reached that maximum for as long as I can remember. Annual bonuses from work were saved and invested.
We purchased a home significantly cheaper than the amount of a loan that the banks would have loaned to us. We have never in our 26 years of marriage carried a credit card balance and pay off the balance completely every month. We strove to set our budget so that my wife could quit working to raise children when they came along. It turns out she continued working part-time while we raised our children and so we have continued to aggressively save.
Life hasn’t always been perfect by any means. My wife was diagnosed with cancer in 2011 but is now in remission. Our high deductible health insurance paid the lions share of the chemotherapy drugs, but we had no problem paying the full deductible and max out of pocket expenses during her years of treatment.
I imagine that many people would see such an event as a catastrophic financial event, yet we had savings readily available to cover the costs without adding additional stress to her effort to get better. It was a life altering event, but it didn’t alter our financial life.
Now that I am nearing the end of my working career, I feel quite guilty being blessed as we have been and knowing that so many people in our country have followed quite a different financial path, as Mr. Gabler has done. I hope my email doesn’t sound egregiously prideful, but the lessons learned by our grandparents during the Great Depression were lost on the Baby Boomers. I hope that articles like Mr. Gabler’s are a lesson that the younger generations can learn from. I know that I have tried to teach my sons these principles ... only time will tell.
This reader, a self-described “Financial Independence Obsessive,” has an impressive track record—but she’s still deeply worried about money:
Hello! Thank you for this reader series. I should be a classic poster child for upward mobility. I grew up in a working class/poor family, with my parents mostly working retail. They divorced and my mother remarried, creating a large blended family of five children. I grew up acutely aware that my family didn’t make much money, which inspired a lot of anxiety about money and “passing” for middle class.
My family was never homeless, but we were under-housed; we were never hungry, but we relied on free school lunches, WIC, and food stamps. I started work cleaning motel rooms at 14 and saved half of every paycheck from my various part-time jobs until I graduated high school. Being a good student (I graduated valedictorian and earned some scholarship money), I thought that going to college would be an automatic ticket to financial security. Even with my savings, scholarships, and grants, I still accrued $40,000 in student loan debts.
I was fantastically lucky. Within a year I landed a job in my field, and I funneled about 2/3 of my take-home pay toward my loans. This was where the Mr. Money Mustache blog [previously noted here] helped a lot, as well as sharing expenses with my also-employed boyfriend who had similar financial goals. I was able to pay off my loans in about two years.
But ANY setback could have been disastrous, as I kept no emergency fund or savings while I was dumping all of my money into my loans. The specter of the debt was always there, but living like a poor college student or a working poor family wasn’t a change for me.
Now I’m student loan debt-free (I’ve never carried credit card debt), and last year I maxed out my 401(k), IRA, tithed 10%, and also saved about $10,000 in a Vanguard account at age 28. I’m certainly on track to retire before 40, barring disasters.
However, I never stop worrying about having enough money, and I also have immense guilt about my parents still being a few missed paychecks from being destitute. My parents are proud of my accomplishments, but also too proud to accept any substantial gifts from me.
When my partner and I shared that we were buying a house (with the full 20% down—we also put double payments toward the principle for the first year), my renter father was noticeably uncomfortable, and again I felt massive guilt. He hadn’t been able to afford a real bed until I turned 18 and he stopped paying child support, and that haunts me still.
I also have friends my age who weren’t as lucky as I was to land a well-paying job, so I feel anxiety about discussing any money matters at all with anyone. By all accounts I’m doing well, but I don’t think I’ll ever feel like it, or feel good about it unless I am able to give it away.
In contrast, reader Gwen started with a lot more student debt and still has a long way to go:
Thank you for your focus on money lately. Money is paralyzing, but I think opening up about it recently has helped me feel less panicky. I’m 27, paying off over $125k in student loan debt (all from undergrad), pay the same amount in rent as I do in student loans every month (about $800), have $0 in savings, and $2500 in credit card debt.
What hit me most a few months ago was that I’d been paying over $800 a month for over four years toward the student loans and had just gotten to the point where my balance is equal to the principal of the loans. I’ve paid down over half of my credit card debt in the last four months by spending as minimally as possible and not contributing to my 401k, but for now the student loan situation remains the same.
I’d love to get married (and have a wedding) or go to grad school, but I find myself delaying both and adjusting expectations because I have such crushing guilt every time I even think about spending more than $50 on something. I feel like I made the wrong choice about undergrad; I didn’t know I’d need to take on debt going into it, but once I did, I didn’t transfer or mitigate the situation because I didn’t understand the implications of student loan debt. And, like many others, I believed that when I graduated with whatever liberal arts major I chose, I’d be able to find a great job and pay off my debt easily.
I am so ashamed and guilty and resentful when I think about 18-year-old me signing away my paychecks from my 20s and 30s for four years at a private school in New York City and a psychology major.
We are a financially illiterate country, sold the idea that you deserve a house, a new car, to go to whatever college you want, and to take any vacation you want. As sad as it sounds, racking myself with guilt every time I spend money has helped me be more frugal.
Our latest reader contributor, Scott Shepard of Memphis, Tennessee, responds to the previous reader who once earned six figures as a newspaper editor but is now unemployed, cash poor, and living in her son’s converted garage. Here’s Scott:
Linda’s tale is very nearly the same as mine. After more than 25 years in the newspaper business, I was downsized in 2008. (The managing editor told me privately that I was the highest paid person in the editorial department, so canning me would save the most money.)
After months of fruitless searching for another job, I accepted an invitation from a friend and moved to Taiwan to be an English teacher. A grand adventure, but after more than six years I yearned to be home. (Most foreign English teachers are from South Africa, so as an American I always had more work than I could handle; everyone prefers an American or Canadian.)
If Linda is interested in being a foreign teacher, I’d be glad to give her some guidance. Otherwise, go through the help wanted ads and see what is most in demand, and train for a new occupation. I’ve enrolled at my local community college to learn PC Networking, a field in which I know I can find work.
I’ve been back from Taiwan for a year, doing whatever I can find, from food service to working in a warehouse. I took training to be a forklift driver, but I’m left-handed, and you really have to be right-handed to drive those things. I’ve picked up some freelance work, but not much. I started two businesses that both failed to take off.
When I started at my last newspaper in 1989, there were 13 reporters. Today, there are three. Those jobs are not coming back. The Internet has completely changed the publishing industry. Nobody wants to pay a writer when there are thousands of others who will do it for free—quality be damned.
And increasingly, the best pay for journalists on the web is writing sponsored content, the form of advertising meant to resemble editorial content (though it’s clearly labeled here at The Atlantic, in contrast to less scrupulous actors like the one Fallows highlighted last year). If you haven’t yet seen John Oliver’s detailed look at sponsored content back in 2014, you really should:
And Jacob Silverman recently wrote for The Baffler “Confessions of a sponsored content writer,” centered on his experiences writing for our site. Here Silverman gives some perspective on the economics of the media industry right now:
But my new Atlantic contact gave me the lowdown: the magazine was looking to expand its sponsored offerings, and it would pay obscenely well—up to $4 per word in some cases, a rate that can be found these days only at the glossiest of glossy mags. I had written a few pieces for The Atlantic’s website before, at the measly rate of $150 each.
It’s definitely tough out there, and not just for legacy newspapers like the ones Linda and Scott worked for. From Ken Doctor’s latest diagnosis in NiemanLab:
At BuzzFeed, a 32 percent miss in 2015 revenue and a halving of its 2016 revenue target, according to the Financial Times.
The list of cutbacks — at The Huffington Post, at Gawker, at Al Jazeera, at International Business Times, and at Salon among others — keeps growing. And each round poses new questions for a news business struggling to find a way forward in this millennium. After all, even if the old world of news faded (like its readers) into older age, at least we could point to the cohort of digital-native outlets with a bit of optimism.
I feared this day would come — the new digital news companies bumping into a wall.
If, like Linda and Scott, you’ve also hit a wall and want to share your experience, drop us an email.
Many law school grads can relate to Brandon’s predicament:
To me, nothing summed up my experience better than your colleague Gillian’s July 2015 article, “Millennials Who Are Thriving Financially Have One Thing in Common ... Rich Parents.” My luck, or lack thereof, went even further. Specifically, I began law school in 2006 when the legal market was still booming, but the wheels fell off in the middle of my second year. By then, even the most qualified of my peers at a top-50 law school struggled to secure any legal position.
I don’t blame my parents, pre-law advisors, or anyone for that. Sometimes, stuff happens. And even three years earlier, I would have been fine. But, now being required to use 25 percent of my monthly salary (after taxes) to pay back law school loans has made life increasingly difficult. Unlike my friends who either have no debt, who have financial support from parents, or both, I literally can’t afford to make a mistake or be the victim of bad luck.
I thankfully will be able to take advantage of a public service loan forgiveness program through the federal government and be finished with my loans after five more years (I’ve been part of it for five so far). But I can’t imagine having to spend 25 years paying back loans and then have to pay taxes on the amount forgiven.
It’s a tough path to be on, and it has definitely contributed to me not saving or starting a family. But like I said, there's no one really to blame for that. Stuff just happens.
Our next reader has a whopping $200,000 of law school debt. This line especially stood out: “I’ve been shamed by people at my current work, including my boss, because I’ve admitted to being poor when I look, and my family looks, rich.” Here’s his full story, involving protein powder and a pooch in pain:
I’m 28, white male, an attorney in New Jersey, graduated law school in 2013 and was unemployed / working for free until the beginning of 2015. I went to a great law school but focused on a career in immigration that I ended up being unable to get a job in due to a lack of Spanish proficiency, and it was really strange and stressful to have most of my classmates going into jobs that started over six figures while I had to move back into my parent’s basement and slowly destroy my savings while looking for work.
I ended up taking what would have been a dream job at an immigration nonprofit, but I wasn’t paid to do it. My parents supported me, but they insisted I live in a much more expensive apartment than I wanted to and then didn’t help as much as they said they would, so I ended up going into thousands of dollars in credit card debt to pay for rent and groceries. I’m ok now, but only because I got a good job at the end of 2014 and spent the past 15 months paying off cards, bills, and many other debts.
I’m lucky enough that I was able to rely on my parents to help me keep “working,” even if unpaid, because without that job I almost certainly would have ended up long term unemployed—but even that luck didn’t feel great. I ended up buying protein powder, flour, and peanut butter to make high calorie/protein cookies to last me when I ran out of money for food; I couldn’t pay for repairs for my car and put all the gas on a credit card; and I had to delay a surgery for my dog for a year which left her in a lot of pain and distress.
I was also depressed during much of this time, and my long-term girlfriend, whom I was planning on proposing to, dumped me, saying she couldn’t deal with it any more. I went to a therapist, who was very helpful with the depression but also ended up being out of network for my insurance, so I had to go into more debt to pay for the treatments.
I’m out of it now, but my food buying patterns were frankly broken for most of 2015 as a result, and I’ve been shamed by people at my current work, including my boss, because I’ve admitted to being poor when I look and my family looks rich. I’m almost out of my credit card debt and was able to pay for my dog’s surgery but I don’t know how long it’ll take for me to be normal about money and groceries/food/normal daily life things. I also have no expectations of ever being able to afford to buy a home—ever—and I’m lucky because I don’t want kids; I have no idea how I could ever financially plan for a child’s expenses.
I have over $200,000 of law school debt, which thankfully I'm on an income-based plan for and will be able to deal with, so the odd thing is it's my smaller debts/bills that have been the real issue for me. The best advice I have for people going through what I went through, or worse, is to try to keep organized and normal. Mental health is just as hard to deal with as physical health, and if I had recognized that and been more put together I think I wouldn’t have the lasting effects that I have now in my approach to daily life.
Your readers—and Neal Gabler—need to know about Debtors Anonymous. It’s a 12-step program for people whose lives have become unmanageable over issues of money. It helped me out of a near-suicidal depression several years ago when I was so flattened by debt that death seemed the only way out of the pain. It gave me a community in which I could speak honestly about my money issues, along with genuine tools for maintaining a “sobriety” on money issues and a Pressure Relief group with which I met to keep me focused.
Now, I write down every expense, balance my checkbook weekly, save at least 10% from every check (on a freelance income) and have a “prudent reserve” for emergencies. Five years ago, I would have been flattened by the emergency payments that Gabler cited. Now, I could meet either one, or both, with perhaps a grimace but with a check that would not bounce.
Yes, I still have debt, but it’s secured and manageable. DA is where anyone who wants to get sane about money can go to share and learn, without any judgment—only love, understanding and support. To find a meeting (and there are phone and online meetings for those outside of areas with local groups), go to: www.DebtorsAnonymous.org.
As is standard in this arena, I will not use my name but sign off as:
I just want to say that what Mr. Gabler wrote in his article on the 49 percent of Americans who cannot afford a $400 emergency was shocking, enlightening, and extremely brave. I was appalled to read such horrible slams directed at him the comment section and I think they just validate his point that many people are in complete denial that many people are, or could be, at risk for “financial impotence.” Thank you for the insightful article and I will continue to read everything Mr. Gabler writes.
I’m actually in the middle of reading his 500-page tome An Empire of Their Own: How the Jews Invented Hollywood, an award-winning work I can’t recommend enough. It tells the inspiring story of the handful of Jewish immigrants from Eastern Europe that built Hollywood in defiance of the exclusionary WASP establishment of New York City led by Thomas Edison and his monopolistic pals in the film industry. In a crazy coincidence, I started reading the book back in February, prompted by all the Oscar buzz and controversy over the Academy’s diversity, before I even heard that Gabler was writing an essay for us—his first, and hopefully not his last, for The Atlantic.
But back to our reader series, the following confessional from Linda Lee, an unemployed journalist, is just as brave as Gabler’s. And her agonizing story hits close to home for members of the media such as myself:
No matter how unhappy you are, never quit a job. I did, when I was being paid more than $100,000 a year as a newspaper editor, had a rent stabilized, one-bedroom apartment on the Upper West Side, and owned a small—400-square-foot small—cottage in Columbia County, near Hudson, on two acres of land, nearly paid off.
I felt unappreciated. I felt stymied. I was in a rut. I’d been there for 17 years. The newspaper was not letting me grow. And I wanted to do something of my own.
All this was in 2004. Remember 2004, those days of economic optimism? Someone in Miami offered me even more money, and a three-year contract, to start a new magazine. So I jumped from a stable company and a cheap apartment in New York to an unstable company, and the house of my dreams—with a 30-year conventional mortgage—in Miami, the Wild West of high expectations and deceptive values.
Times were good. I eventually gave up my rent-controlled apartment, because my Miami house was accruing value, and I figured I could always sell it and use the profit to go somewhere else. The mortgage crisis hit Miami starting in 2007, long before other places, because Miami real estate was so out of control. People “bought” three or four pre-construction condos—“bought” in the sense of making a down payment—and then flipped them on completion, making $100,000 on a ten percent, $30,000 investment. And then they did it again.
I told my literary agent in New York that I wanted to write a book called “Tiny Bubbles,” about the crashing real estate market in Miami, Phoenix, Las Vegas and Orange County, California. I’d seen the whole thing first hand, from cocktail parties flowing with champagne and gorgeous girls in strapless dresses to announce the start of sales on some new building that existed only in computer renderings. I’d seen the grand openings of million-dollar “sales centers,” tarted up by designers like Philippe Starck with high-end amenities, to show people exactly what their apartment would look like—except for that clause way down in the small type saying that the developer could substitute different appliances and materials of “similar” quality.
The sales centers were Potemkin villages, not even on or close to the building site. They offered a false front on three double-wide pre-fab structures, all arranged to offer grand living spaces, fake views of the water, rain-forest shower heads, stainless steel appliances, Italian cabinetry, marble floors and, my favorite amenity, the second kitchen, in the master suite, so buyers would not have to walk to the kitchen.
Then there were the gushing announcements of buildings being sold out, the press releases, the media coverage, the pretentious names—Apogee, Aria, Icon, the Mansions at Aqualina. My favorite excess: the hot air balloon that would take potential buyers up to the height of the condo they were considering, so they could see the view.
My agent told me that no one wanted to read a book like that, that it was depressing, and that, besides, real estate in New York was just fine. This was, remember, 2007.
By 2008, Miami real estate had crashed and burned. And so had my magazine, because my advertisers were those same luxury condos and the appliance companies and furniture stores that sold things to people who were going to buy luxury condos. I lost my house to a short-sale that disappeared every cent I had put into it, my cash down payment, my thousands of dollars of improvements. And I exhausted all of my other cushions, my 401K, half of my pension, taking early Social Security, just to survive and find a new job.
That was nine years ago. There were no jobs in Miami, but I also could not find a job in New York. Newspaper, you know. And I couldn’t afford to live in New York anyhow. Nor can I get a job in any of the places I’ve tried: Washington, DC, Leesburg, VA, several places in New Jersey, Hudson, NY, Minot, ND, Pleasantville, NY, Philadelphia or Emmaus, PA or Harrisburg, PA. I am overqualified, and over-age—even though I would happily work for someone younger. Or anyone.
Recently, I’ve been interviewed for a Civil Service job that would pay me $40,000 a year. At the interview I asked straight out if I would be disqualified either because I’d previously made more money or because of my age. I was told that in civil service positions, that does not matter. But it’s been six weeks since the interview, and I’m still waiting.
Meanwhile, I am in a moment of financial dread. My bank account is almost empty and I’m waiting for a wire transfer of $2,000 from Paris, for a revision of a guidebook I wrote about Miami. The money was supposed to arrive at the end of March. It’s now April 20, and no money, despite countless emails to Paris.
I have payments of $308, $225, $200 and $54 (for two credit cards, a car payment and car insurance) due in the next five days. I have enough food for myself, and enough dog food, but the cat is beginning to eye his feeder suspiciously. I can’t afford to drink. Right now I have $12, which I’m holding onto for an emergency.
This is not what I expected my life to be like: I am living in a converted garage of a house I share with my son and daughter-in-law, a two-room living space with a half bath and no kitchen.
Most of my friends say, “You’ll figure something out. You always do.” But I haven’t and this time it’s possible I won’t.
One of the worst periods of my life was when I first returned to the U.S. after living abroad for several years. During the two-year period that followed, I spent more time unemployed than employed. Even worse, after I found a job after seven months of looking, I was laid off after a few months because it was a poor fit.
Being so financially insecure was devastating. Even though I had the benefit of staying with my parents, I spiraled into depression. I cried constantly. I was in my 30s, college-educated, and had never spent more than a month without a job. I called suicide hotlines, only to have them turn me away because I wasn’t going to kill myself right then and there. Didn’t it matter that I thought about it all the time? That I was a useless person who didn’t deserve to live because I couldn’t find a job?
My parents were actually pretty great. My mom always told me and tells me now, “Your generation suffers.”
Eventually, I did find a permanent job again in 2013. At that time, my savings account was bleak, and I was living off my credit cards.
But ever since my employment stabilized, I’ve been obsessively saving. Personal finance is my hobby. Even in expensive San Francisco, I live very frugally, and I love it. I changed my 401K deduction so that I would max it out. I got my tax refund and threw it into my Roth IRA, because guess what?—I’m maxing that out too.
This year, I’m aiming for a grand total of $100K in my savings account. I’m $23K short right now, but I’m confident I can reach my goal.
But even with that big round number, I don’t feel safe. I’m scared that one day, I’ll find myself facing the demon of depression again because of financial insecurity. So I’m doing everything I can to keep the demon away while I can.
Speaking of extreme savings, this email from Brian Surratt is really helpful:
Neal Gabler’s article was a bracing spotlight on the problem of middle-class financial insecurity. His candid account of his own financial history was a brave and important act. I hope it serves as a catalyst to change the financial habits of Americans for the better.
His story presents an opportunity to highlight the exact opposite of financial illiteracy: the small but growing financial independence, or FI, movement. (The movement is also known as financial independence/retire early (FIRE) or early retirement extreme (ERE).) It’s best known proponent is Mr. Money Mustache, who has been widely profiled in magazines such as The New Yorker. The movement appears to be growing. For example, the Reddit FI forum has been steadily growing in popularity and there seem to be new FI bloggers every day.
The central tenet of FI is to strive for a very, very high savings rate, essentially saving between 30 and 70% of income. This both encourages household frugality while increasing savings to a point where it is no longer necessary to work as a paid employee well before traditional retirement age.
The FI culture has much to offer those who are financially insecure. First of all, the time to become financially literate is now. It is never too late. As Megan McArdle has pointed out, if you are an older worker with insufficient savings, FI is a great way to ensure you save something for retirement.
Second, even if you simply don’t have enough income to achieve a 50% savings rate, by adopting some of the principles of FI, you may achieve at least a reasonable (say, 20%) savings rate.
Third, the broad range of incomes of FI adherents shows it is possible for the majority of Americans to save some amount. After all, whatever one’s income level, other households are getting by on less. It will require a change in lifestyle, but the FI movement shows that it is possible.
Over the past year, for the first time in my life, I’ve been saving, and saving aggressively—35 percent of my paycheck. Fifty percent is an appealing goal, especially after reading Gabler’s piece the other night and now absorbing all the emails coming in from readers who fell on really hard times. Having a significant savings account for the first time in my life is an extreme boon psychologically. (Still paying off those undergraduate loans, though, 12 years out.) If you happen to be part of the Financial Independence movement and want to offer any specific advice or tips to our readers, drop us an email.
“James’s performance, I’m sure, is causing grief for an accountant somewhere.”
Ken Jennings rose to fame after an unprecedented run on Jeopardy 15 years ago: Over the course of 74 episodes, he won a total of roughly $2.5 million.
Recently, a contestant named James Holzhauer has been working toward Jennings’s record at an astonishing pace. After the Friday-evening broadcast of the quiz program, Holzhauer had won about $850,000 over just 12 episodes. If he keeps up that rate, he’ll reach $2.5 million in less than half the time it took Jennings to do so.
It’s much less scientific—and more prone to gratuitous procedures—than you may think.
In the early 2000s Terry Mitchell’s dentist retired. For a while, Mitchell, an electrician in his 50s, stopped seeking dental care altogether. But when one of his wisdom teeth began to ache, he started looking for someone new. An acquaintance recommended John Roger Lund, whose practice was a convenient 10-minute walk from Mitchell’s home, in San Jose, California. Lund’s practice was situated in a one-story building with clay roof tiles that housed several dental offices. The interior was a little dated, but not dingy. The waiting room was small and the decor minimal: some plants and photos, no fish. Lund was a good-looking middle-aged guy with arched eyebrows, round glasses, and graying hair that framed a youthful face. He was charming, chatty, and upbeat. At the time, Mitchell and Lund both owned Chevrolet Chevelles, and they bonded over their mutual love of classic cars.
A lot of software developers, according to an unprecedented new analysis.
Updated on April 19 at 1:28 p.m. ET.
There has never been a town like the one San Francisco is becoming, a place where a single industry composed almost entirely of rich people thoroughly dominates the local economy. Much of the money that’s been squished out of the rest of the world gets funneled by the internet pipes to this little sliver of land on the Pacific Ocean, jutting out into the glory of the bay. The city now sits atop a geyser of cash created from what the scholar Shoshana Zuboff calls “behavioral surplus”—the natural resource created from your behavior, which is to say your mind.
Better to run than to have your liver squeezed out.
The great white shark—a fast, powerful, 16-foot-long torpedo that’s armed to the teeth with teeth—has little to fear except fear itself. But also: killer whales.
For almost 15 years, Salvador Jorgensen from the Monterey Bay Aquarium has been studying great white sharks off the coast of California. He and his colleagues would lure the predators to their boats using bits of old carpet that they had cut in the shape of a seal. When the sharks approached, the team would shoot them with electronic tags that periodically emit ultrasonic signals. Underwater receivers, moored throughout Californian waters, detected these signals as the sharks swam by, allowing the team to track their whereabouts over time.
Gérard Araud says that Trump is right about trade. Kushner is “extremely smart” but has “no guts.” And John Bolton’s not so bad, actually.
Gérard Araud, the charmingly blunt French ambassador to the United States, is famous for two things: the lavish parties he hosts at his Kalorama mansion, and his willingness to say (and tweet) things that other ambassadors might not even think, much less state in public.
Araud ends his nearly five-year tenure in Washington today, and when I spoke with him last week, he was, even by his usual standards, direct to the point of discomfort. He told me his view of the U.S. (“The role of the United States as a policeman of the world, it’s over”) and Donald Trump (“brutal, a bit primitive, but in a sense he’s right” on free trade), and he shared his opinions of John Bolton (he’s a “real professional,” even though “he hates international organizations”) and Jared Kushner (“extremely smart, but he has no guts”).
It only took five minutes for Gavin Schmidt to out-speculate me.
Schmidt is the director of NASA’s Goddard Institute for Space Studies (a.k.a. GISS) a world-class climate-science facility. One day last year, I came to GISS with a far-out proposal. In my work as an astrophysicist, I’d begun researching global warming from an “astrobiological perspective.” That meant asking whether any industrial civilization that rises on any planet will, through their own activity, trigger their own version of a climate shift. I was visiting GISS that day hoping to gain some climate science insights and, perhaps, collaborators. That’s how I ended up in Gavin’s office.
Just as I was revving up my pitch, Gavin stopped me in my tracks.
What the life of Richard Holbrooke tells us about the decay of Pax Americana
What’s called the American century was really just a little more than half a century, and that was the span of Richard Holbrooke’s life. It began with the Second World War and the creative burst that followed—the United Nations, the Atlantic alliance, containment, the free world—and it went through dizzying lows and highs, until it expired the day before yesterday. The thing that brings on doom to great powers—is it simple hubris, or decadence and squander, a kind of inattention, loss of faith, or just the passage of years? At some point that thing set in, and so we are talking about an age gone by. It wasn’t a golden age—there was plenty of folly and wrong—but I already miss it. The best about us was inseparable from the worst. Our feeling that we could do anything gave us the Marshall Plan and Vietnam, the peace at Dayton and the endless Afghan War. Our confidence and energy, our reach and grasp, our excess and blindness—they were not so different from Holbrooke’s. He was our man. That’s the reason to tell you this story.
More and more Americans are reporting near-constant cannabis use, as legalization forges ahead.
The proliferation of retail boutiques in California did not really bother him, Evan told me, but the billboards did. Advertisements for delivery, advertisements promoting the substance for relaxation, for fun, for health. “Shop. It’s legal.” “Hello marijuana, goodbye hangover.” “It’s not a trigger,” he told me. “But it is in your face.”
When we spoke, he had been sober for a hard-fought seven weeks: seven weeks of sleepless nights, intermittent nausea, irritability, trouble focusing, and psychological turmoil. There were upsides, he said, in terms of reduced mental fog, a fatter wallet, and a growing sense of confidence that he could quit. “I don’t think it’s a ‘can’ as much as a ‘must,’” he said.
Why don’t the two holidays always coincide? It is, to some degree, the moon’s fault.
Let’s get some things straight.
Passover is a springtime Jewish festival celebrating the early Israelites’ exodus from Egypt and freedom from slavery. Jews observe it by hosting a ritual dinner, called a seder, and then by abstaining from eating all leavened bread for about a week. (Some of us abstain from someother stuff, too.) Instead, we eat matzo, a thin, unleavened cracker.
Easter is a springtime Christian holiday celebrating the resurrection of Jesus Christ and freedom from sin and death. It is preceded by a series of holidays commemorating Jesus’s path to the cross. One of these holidays is Maundy Thursday, which, aside from being a great name for a holiday, is a remembrance of the Last Supper, which was a seder. In the United States, many Christians observe Easter by attending a ritual meal between breakfast and lunch, called a brunch.
Behind the scenes at the celebrity rounds of the iconic game show
Behind the scenes at the celebrity rounds of the iconic game show
As the Jeopardy! crew pauses for a commercial break, Alex Trebek—the blisteringly intelligent host of the long-running syndicated game show—steps forward, as is his custom, to answer questions from the audience. Looking over the crowd, he leans over to address an adorable, bespectacled little girl, who asks the Jeopardy! host if he has any pets. Just one dog, he says: Willie. He pauses thoughtfully before explaining that he used to have another dog named Spammer—"but unfortunately, we have coyotes in southern California."
There's a collective gasp from the audience—did he really just say that?—and a series of nervous giggles. But Trebek, eternally unflappable, doesn't miss a beat. He walks back to the set, taking his place as the lights come up. The Applause sign blinks, and the unmistakable Jeopardy! theme music—one of the most iconic tunes in television history—signals the start of yet another game.