Tag Archives: poor

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?

Is This Still the Land of Opportunity?

Statue of Liberty 7

President Obama has called the wealth gap and social mobility the “defining challenge of our time.” He will no doubt be speaking about this in his State of the Union Address today. Pope Francis has also shined a spotlight on income inequality. Here in NYC, the newly elected mayor, Bill DeBlasio made income inequality and the “tale of two cities” the theme of his campaign which he won in a landslide.

A while back, I posted an infographic entitled Broke? It Might Not Be Your Fault, which lists statistics and facts showing how it is hard to move up to the next economic rung. One of the main things I love about America is that we have much more opportunities compared to many other places. However, a growing amount of people are pessimistic about achieving the American Dream. I am a big fan of the Horatio Alger stories, the “rags to riches” type stories where those living in impoverished conditions rise from humble beginnings to live a richer life through hard work, determination, courage, and honesty. Recently, Laurie from the Frugal Farmer posted Can You ‘Bootstrap’ Your Way Out of Poverty?, where she cites to a Yahoo Finance article which answers the question in a negative. However, Laurie goes on to recount an inspiring story of how her mother was able to overcome many obstacles to “bootstrap” her way out of poverty. Charles from Getting a Rich Life posted a story about living in government housing and growing up poor, but is now a millionaire before the age of 40.

Hearing these stories definitely inspires you. If someone with these obstacles can succeed, so can others right? Comparatively, the details of my life are quite inconsequential. I was born in NYC to a working-class immigrant Chinese family. Growing up, my family lived a frugal life, but we did not live in government housing nor did we have to rely on welfare. We lived in a multi-generational extended family house which included my family, my uncle, aunt, 2 cousins and my paternal grandparents. We never had cable television, which made me think we were poor and deprived. For the longest time, we didn’t have a remote control for our television. My sister and I would take turns sitting next to it to flip through the channels. Indeed, First World Problems! We didn’t have many luxuries, but we always had food on the table and a bed to sleep in. That’s all you can really ask for.

My parents always told us that a good education and a good work ethic would give us a better life. I received scholarships from some private universities within commuting distance from where we lived, but I really didn’t want to stay home so I chose to dorm at a state university. It might not have been the best decision, financially speaking, but I needed to do it for the independence and it did teach me responsibility. I went to a public state university and received income-based grants from the federal government and the state, but did take out student loans. My parents helped out with the difference. I worked part-time throughout high school and college, but all of that money was for my own personal expenses. After graduating from college, I moved back in with my parents and found a job paying about $32,000. I paid my parents $700 a month for “rent” which helped them out with the mortgage. I didn’t see myself staying in my career track, and decided to go to law school. I chose to go to law school part-time in the evenings, while continuing to work full-time so that I could support myself. My “rent” was however cut to $600 a month. With my degree, I found a job in government which provides great benefits and a good income. While I am no where near millionaire status, I am securely in the middle class.

Many bloggers brought up great points in the comments section of my post Broke? It Might Not Be Your Fault, regarding difficult obstacles some face. Those in rural areas may lack access to opportunities that may be available to others. Those who are raised in a toxic environment, whether it be because of drug abuse or physical abuse, may never see that there are opportunities available to them or encouraged to access those opportunities. Many also face circumstances, beyond their control, where they are unable to take advantage of opportunities that are presented. I did not tell my story to say that anyone can better their lot in life since I was able to do it. While I did not grow up with many privileges or advantages, I did have all the necessities provided for me and a family who encouraged me to improve myself. Surely, much can be done to strengthen the safety net for those struggling and to help them improve their lot in life. But stories of those from humble beginnings who advanced themselves through hard work shows that it is possible for many.

Do you think it’s possible to improve your lot in life? Is this still the land of opportunity?