Personal Finance for the Forgotten

credit: freedigitalphotos by Winnond

credit: freedigitalphotos by Winnond

Tomorrow, after a divisive and contentious election, a new president will be sworn in. A thin-skinned, vengeful, inexperienced braggadocio and bully. That was just an undeniable assessment of the character of the man based solely on his conduct, actions, and words. This is not a political blog nor am I a very political person so I’m going to leave it at that.

Xenophobia and racism played a part in the outcome. Having an opponent who was strongly disliked with flaws of her own also played a role. Some just held their nose and voted for the least of two poor candidates. Others voted for a third-party candidate who had no chance of winning. However, there was a strong segment of the population who felt ignored by the political establishment, on both sides. Their economic concerns and values were not addressed and Mr. Trump was able to tap into that anger and turn it into a victory for himself. The forgotten man and woman are angry for being ignored, and rightfully so.

Sometimes I wonder if there is a segment of the population who feel like they are the forgotten when it comes to receiving personal finance information. In a Yahoo finance article listing various ways to spend less and save more, it offered the usual generic tips most personal finance bloggers often tout. One reader commented, “Each time I read about educational and personal finance tips here, I can’t avoid feeling that they were written by privileged folks with textbooks solutions to real life problems.” I’ve also read comments in similar articles where people seem to shake their head and say, “I already do this, but I am still struggling!”

The feeling that perhaps personal finance bloggers or gurus are perhaps out of touch with reality made me think of a Saturday Night Live skit where Kristen Wiig parodies Suze Orman. Josh Brolin plays Dick Dunkendirk, a caller to the Suze Orman show who is in dire economic straits. He tells Orman that he “took a sponge bath this morning in a TJ Maxx bathroom” and slept on “four opened pizza boxes lined with Pampers.” Orman responds by telling him to tap into his emergency savings account and to immediately put his money into a Roth IRA.

Helaine Olen, a journalist and writer, criticizes personal finance gurus for blaming financial victims for not getting ahead when it is a political and economic problem. She says that “there is this great myth out there that Americans went on a financial bender. The leading cause of bankruptcy is not buying lattes, it’s health care, followed by the usual fractured families, unemployment, sort of all of the plagues of the 21st century — economic plagues.” She continues by saying that it “depends on if you think this is a self-help problem or a political problem. I believe it is a political and economic problem.” She also says that those in the personal finance space are basically saying, “‘Yeah, the economy (is poor), but you’re in it on your own, and therefore you should be able to solve this on your own.’ Realistically, that’s just not true for most people.”

I think Mrs. Olen’s comments are troubling. She is correct that a lot of those financial struggles are a result of the economy and that a large part of it is a political problem. But by saying that personal finance advice is unrealistic and unhelpful is a disservice to her readers. Actually, not only is it a disservice, it is unproductive and perhaps dangerous. She is allowing the forgotten and ignored to abdicate responsibility and play the victim. Yes, for some of those struggling, they may be blameless and perhaps they may be unable to pull themselves out of poverty. But you can only control what you can control. Sure, it would be great if our politicians could offer a solution, but I’m not holding my breath on that happening. It is much more productive to try and find a solution on your own, rather than waiting for a savior. Nobody cares more about you and yourself. Your choices in life has a huge effect on your destiny. So rather than accept financial struggle as a foregone conclusion, take action to improve your lot in life. Even with all the issues we have in this country, I still think this is the land of opportunity.

If you are unemployed or underemployed, you’ve got to learn skills which will enable you to get a better paying job. If you live in a depressed area with no jobs, maybe you will have to move. I do not mean to make it seem like these solutions are easy. They are absolutely not easy. However, what choice do you have if you are stuck in that predicament. And while Mrs. Olen has done much more research and has more access to data than I do, my anecdotal experience is that while there are many struggling due to things beyond their control, many are also struggling because they lack financial literacy and live beyond their means. I see all too often that a family is living paycheck to paycheck, yet they have cable television, an expensive car, more house than they need, and the latest tech gadgets. However, I would also like to caution many who rush to judge others financial predicament without knowing the full story. Often times when I read an article about someone struggling financially and the comments will lay complete blame on that person for their actions. More empathy, compassion, and understanding can never hurt.

As I was writing about the forgotten people out there struggling financially, I read that Jay from Budgets are Sexy has created the Rockstar Community Fund where $20 gift cards are given out to better someone’s life. Another initiative is Debt Drop where $50 is given to someone struggling with debt to give them a little hope for the day and remind them that they are not alone. This initiative was inspired by Melanie Lockert of Dear Debt who was doing that on her own blog. Finally, a third initiative is a general fund, which has recently helped a fellow blogger who is struggling with health issues. Some may say that $20 or $50 is a drop in the bucket, but big things often have small beginnings!

I’d also like to mention that Brian from Debt Discipline has spoken at his local library about dealing with debt and about budgeting. He has also championed financial literacy education at his children’s high school.

I am inspired by my fellow bloggers who are taking action to address the needs of the forgotten. What else can we do? What else can those struggling financially do?

16 thoughts on “Personal Finance for the Forgotten

  1. Biglaw Investor

    I have a feeling that the analysis of the election and what it means will continue for at least the next four years. One thing I’ve decided to accept is that supporters of Donald Trump voted for him in spite of his obvious flaws (it’s not like he was trying to hide them) and so there can be no “surprises” over the next 4 years by his actions. I think that’s already bearing out in the transition, where scandals that would normally dominate a presidency are brushed off without thought.

    It reminds me of a story I heard from Marcia Clark, the O.J. Simpson prosecutor. She said that after the results of the trial many people came up to her to ridicule her about the glove. “You’re an idiot! Why did you make him try on the glove in court? He was wearing a latex glove. Of course it was going to be difficult to put on a glove over latex!”

    Her response? “Yes, of course I knew that. And so did you. And so did everyone watching. And so did the jury. They knew that and chose to ignore it.”

    Tying it back into personal finance advice, I think everyone knows the basics. Spend less than you earn. Save up some money. Those things are obvious. But there are deep societal problems (see J.D. Vance’s Hillbilly Elegy: A Memoir of a Family and Culture in Crises) inflamed by marketing that aren’t helping the situation. The end result is a lot of cognitive dissonance which is painful.

    On the one hand, you should be saving money, but on the other hand everyone seems to be enjoying the good life, which you can’t seem to do without falling behind. The irony is that this effects a lot of people on all income levels. Sure, it’s easier for the high earners to save money, but they’re running with a peer group that expects them to spend significantly more money too.

    I think we’re all still searching for the solution …

    Reply
    1. livingrichcheaply@gmail.com Post author

      Just read a review and synopsis of the book you mentioned and also a post from Vance. Sounds fascinating…will have to read it. He has an interesting perspective having grown up in rural US and then going to Yale Law School.

      Reply
  2. Brian @ Debt Discipline

    If we all work to improve the lives of others around us. We, in fact, create the change that an elected official has yet to accomplish. We need to keep that in perspective. We need to continue to work collectively helping one another, each doing a small part.

    If there is a good thing about being in debt or struggling financially, is that there are or have been a ton of other people who have been in similar situations and are willing to help.
    Brian @ Debt Discipline recently posted…How to Build and Maintain a Six-Month Emergency FundMy Profile

    Reply
    1. livingrichcheaply@gmail.com Post author

      Great point. Too often an elected officials priorities is still get more money to win another term in office. A lot more can be done if can collectively work together to get things done. It’s great that you are able to share your experience and can empathize with others who have faced similar financial situations.

      Reply
  3. Tonya@Budget and the Beach

    ” Nobody cares more about you and yourself.” Absolutely!!! I do think people have had a rough go of it. And I really do sympathize, and in some ways, have been there, but in the end it’s the individual who will pull themselves out of a situation. And there is a great pride in doing that as well. That being said, why not lend another human a helping hand. If it’s not money, then perhaps introducing someone for a job connection, or career advice, or teaching them a new skill. There is always something. What that individual chooses to do with that help though is up to them. I’ve seen people who are given help who do nothing with it and are ungrateful, as if they deserve it, and others who are so humbled and grateful, and use it as a stepping stone.
    Tonya@Budget and the Beach recently posted…An Interview With Myself About Financial IndependenceMy Profile

    Reply
    1. livingrichcheaply@gmail.com Post author

      You’re right, ultimately it’s up to that individual to pull themselves out of that situation. You can lead a horse to water but you can’t force it to drink.

      Reply
  4. Kristin

    I love that more personal finance writers are talking about this disconnect. There’s the “pull yourself up” side and the “personal finance is useless because people are screwed” side. Like most other issues, reality is somewhere in between. To me, the biggest obstacle with personal finance writing is a lack of empathy (I have to check myself on this a lot, so it’s my stuff, too). People assume that, because one method worked for them, the next person should be able to successfully apply that method, too, and if they can’t, they’re just making excuses. I mean, personal finance is just set of tools many people may be able to use to feel in control of their finances in some way. We can’t throw personal finance out the window, that’s silly, but especially now, I think it’s also important to remember them in the context of larger issues.
    Kristin recently posted…If You’re Experiencing Imposter Syndrome, This Is for YouMy Profile

    Reply
    1. livingrichcheaply@gmail.com Post author

      I struggle with that also. As a child of immigrant parents who came here from a third world country, I often think that if they can do it then why can’t those who have the privilege of being born in this country with its opportunities. However everyone is different and has their own unique story and struggles. What works for one may not work for another. As they say…personal finance is personal.

      Reply
  5. Tara

    I’m not a fan of “Bootstraps theory.” While yes, there are outliers that do make it out and do something with themselves, if you look at those outlier situations more closely, you can see there was something or someone that helped them, so they’re not truly a “bootstraps” success situation. Sonia Sotomayor is an example of someone who grew up in a predominantly poor, Latinx neighborhood in the Bronx, but she was lucky enough to have attended a very-low-cost Catholic parochial school, which gave her a much better primary education than kids in her neighborhood who attended the local public school (and now, most of those low-cost Catholic elementary schools in poor neighborhoods across the US have closed). And growing up with a caring mother, she was able to succeed, go on to ivy league universities, and become a Supreme Court Justice. That’s not to say that Sonia’s life could have turned out differently–it most certainly could have. And I’m sure her determined personality was a big part in why she was able to succeed so much in life.

    This is why I have problems with a lot in the PF world. It’s like if you didn’t know the importance of attending a low cost university and majoring in computer science, it’s YOUR FAULT for your current debt fiasco. But of course, your parents should have known to have raised you in a SUPER AWESOME public school district and it’s still your fault if they didn’t.

    Or when I see PF bloggers who talk about their now-very-valuable property holdings and how they bought them in spite of their low-ish salaries… it’s like yes.. you bought your house BEFORE your local neighborhood doubled/tripled/quadrupled in value. Real estate holdings in most major cities are out of reach of probably 90% of Americans, unless they are lucky enough to inherit (like the lucky ducks who inherit a $1.5 mil Brooklyn brownstone).

    And while I do feel that personal responsibility is important and spend-thrifts should not be given carte blanche to their irresponsible behavior, one must look at the whole picture to why a person is in the dire financial straits they find themselves in in the first place. And perhaps the lack of a social safety net is a major reason. If parents had access to affordable child care, if adults and children had access to quality, affordable health care, if cities and suburbs had quality, affordable public transit, if housing was affordable to all (including those unable to work), if people made actual livable wages, etc, then perhaps we wouldn’t be able to excuse continued spendthrift ways. But until those situations change, I too would argue that it is a political and economic problem.

    Reply
    1. livingrichcheaply@gmail.com Post author

      Thank you for your thoughtful comment. And while I don’t like it when people point to the “bootstraps theory” and say that since so and so was able to make it, then why can’t others. There are many factors involved and everyone’s circumstances are unique. It is true that you have to look at the entire picture but it can’t be denied that there are many who do not take personal responsibility and are spend-thrifts. Of course there are others who are struggling because of other issues that maybe beyond their control. I’m not saying that it is not a political or economic problem, it’s just that the solutions to that are beyond our control.

      Reply
  6. Laurie @thefrugalfarmer

    I’m a big fan of the bootstrap theory, having watched my mom do it and succeed, despite terribly trying circumstances. However, I know from personal experience that this can be incredibly difficult, this process of knowing where to start and getting your mind out of the way and taking steps to begin the bootstrap process. One day soon I’d really love to teach PF to that group of people. I’ve seen firsthand that it can be done! I’m currently looking for ways I can incorporate what I’ve learned into the ministries I’m involved with that help the less fortunate.
    Laurie @thefrugalfarmer recently posted…5 Financial Moves for Millennials to Make Before 30My Profile

    Reply
    1. livingrichcheaply@gmail.com Post author

      Like I commented in reply to Tara, I think people shouldn’t point to the success of a few who grew up in trying circumstances and argue that everyone can do it. However, I do agree with you that we do have much more opportunities that most people in other countries. That’s why we see many immigrants succeed because they take advantage of these opportunities that may not exist in the countries where they came from. That’s great to hear that you are planning to teaching PF using your personal experience.

      Reply
  7. Chris Salamone

    I think have a written down plan is important as it helps you stick through bad times and not get too crazy during the good times. Overall, as long as you’re in it for the long term that’s the key to investing success.

    Reply
  8. DC @ Young Adult Money

    I definitely think there are people who are “forgotten” who can’t relate to most personal finance blog posts and articles. One thing that frustrates me is the HUGE amount of posts out there about people who paid off X debt in X amount of time. It’s only applicable to people in similar financial situations. Some people – as you described earlier – ARE working like hell at two jobs and spending barely anything but still struggling. They aren’t going to be able to relate to posts written by – and for – families making $100k+.

    Not sure I have a point other than I think there is a big group that is forgotten.
    DC @ Young Adult Money recently posted…15 Skills That Will Help You Make More MoneyMy Profile

    Reply
    1. livingrichcheaply@gmail.com Post author

      Yea, the headlines of those articles are exciting but not often applicable to everyone. While you can still learn something from everyone’s story, it can be frustrating for some who are in worse off positions. Very true that it is much different when compared to families making over $100k plus.

      Reply

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