People tend to feel more comfortable talking about their personal health problems than their finances, a friend once told me, and little did I realize this is not anecdotal information but holds true. This and many other facts are disclosed in a recent Atlantic magazine article The Secret Shame of Middle-Class Americans by Neal Gabler that has gone viral in financial and economic forums. It takes a courageous person to bear the muddy secrets of their financial woes. You would have never guessed that 47 percent of Americans would not have $400 readily available if needed to pay for any emergency according to survey. Ouch!
A gut wrenching yet sobering piece opened up a raw wound for many and generated plethora of opinionated comments from the public, similar stories shared by others, and even responses from financial experts. It’s no wonder that there is resentment portrayed at the polls and favor for anti-establishment in much of current politics. The antipathy may be stemming from economic condition of the middle class, and the public (friends and family alike) can be very judgmental (they have a right to their opinions) and scornful towards those who are perceived as financially irresponsible and contribute to the overall societal financial instability. This cover story created a wave that unleashed the kraken.
The author writes “I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. I know what it is like to have liens slapped on me and to have my bank account levied by creditors. I know what it is like to be down to my last $5 — literally — while I wait for a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs. I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn’t know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil.”
Reading this article consumed me with mixed emotions, a bit of sadness and madness at the same time. Read it for yourself, position your own thoughts on this topic, and realize the economic realities, financial insecurities, monetary challenges plaguing millions of middle-class Americans The New Normal of Financial Vulnerability in America and in 2015 The United States of Financial Insecurity.
Another recent article tells the tale of four men in different income brackets and provides a portal into their family’s financial lifestyles an opportunity to view others through their own lens: 4 Men with 4 Very Different Incomes Open Up About the Lives They Can Afford – They all are from unique social economical class, have great disparities in their incomes, have diverse professional skills and varied opportunities to make more money, different priorities in life, yet each of them has goals to achieve for their financial future, want to work well into retirement age, and yet found things they could afford to enjoy in life.
This brings the topic of personal finance tribulations to the forefront for discussion. The author refers to his financial vulnerabilities as an embarrassment much like a “financial impotence”, where people tendencies are to conceal their monetary struggles rather than confront the reality with resolution and assurance. Wow, the author describes it as a “source of shame, a daily humiliation—even a form of social suicide”. Analyst’s may attribute it to a the un-moderated spending behavior- “Keeping up with the Joneses”, over consumption versus lack of saving, credit-card debt/student loans/medical bills, stagnating job markets, unemployment statistics, housing market crash, income differentials, wealth inequality-whatever it may be, it is the new norm, financial distresses incognito. The author candidly writes “I don’t ask for or expect any sympathy. I am responsible for my quagmire—no one else. I didn’t get gulled into overextending myself by unscrupulous credit merchants. Basically, I screwed up, royally. I lived beyond my means, primarily because my means kept dwindling.”
Coming out of the closet and publicly talking about it brings light to the dreaded talks we all should be discussing. Let’s learn and grow from the hard financial lessons in the stories above and so many personal ones of our friends and families. Don’t be ill prepared for the complex world of financial management (compound interest, risk diversification, risk management, debt to income ratio, taxes, inflation, deprecation, liabilities, dividends, return on investments/equities etc.), keep up your pace on knowledge –be financially literate-make the right choices knowing the financial implications. Your financially well-being impacts your emotional and physical well-being.
Just like a healthy lifestyle through exercising-we all motivate ourselves to work out and go to the gym today, so we can have good health over long term in years ahead. Similarly for you financial health (much like deferred compensation) you need to have sound financial habits for long term financial well-being. Just do it regularly and consistently. Practice good financial management basics. Constantly and consistently work on your financial priorities with your family and start financial literacy early in life for everyone and especially for our next generation!
So, focus, evolve and grow. Let’s not lose the long term priorities with the distractions of today; make those hard choices. Work on our financial fitness-and fulfill those responsibilities -sound financial decisions will pay off. It doesn’t matter when you start as long as you start and stay on it consistently.
Photo Credit: Finance by Tax Credit CC by 2.0