Whoops.
He was right, after a fashion: industrial production, manufacturing, trade and sales have all recovered from their recession nadirs. The problem is that most of us aren’t sharp-featured Randian captains of industry and as such aren’t in charge of industrial production, manufacturing, trade and sales – the only way we normies get a benefit from these recoveries is if they create jobs. And they haven’t. Unemployment is, in fact still on the rise. Even for those Americans who are secure in their jobs, pay cuts are a distinct possibility and any hope of a raise will likely need to be deferred for almost a decade.
Still, things could be worse – and they have been. This might be the worst economic downturn since the Great Depression, but it’s still not actually the Great Depression. And anyway, isn’t part of the American character our ability to buckle down, slam our noses into the grindstone, grit our teeth, and shoulder through any adversity that rears its ugly head? Isn’t that what our parents, grandparents or great-grandparents (as the case may be) did during the 30’s? Surely we can do the same under somewhat easier circumstances, right?
Not without help, it turns out. Apparently most of us aren’t the same hard-nosed, leather-skinned, nail chewing paragons of the working class our forebears were, but that’s alright, because help is available in the form of Linda Rath, the Partnership’s Family Financial Counselor. I sat down with Linda recently and asked her a little about what she does with the Partnership.
My primary function is to work with families who are seeking services for the
first time ever in their adult lives. People who have always worked, always
managed to pay the bills, but now some crisis has hit. Because of the recession
they have been downsized or they’re still working at the same company but they
had to take a huge pay cut, or they’ve been living based on overtime and there
is no more overtime. So lots of situations are occurring out there where people
who are still employed are really underemployed and can no longer pay the bills.
It is Linda’s job to fix that last part, because it turns out that a lot of what people do while they’re working and in the weeks and months after they lose their job or take a hit in pay has a huge effect on how hard unemployment hits them. According to Linda, when most people find themselves suddenly unemployed or working for less money than before, they try as hard as they can to maintain the lifestyle they had before – which was just as unhealthy, as you will see below – through credit and high interest loans, assuming that something will come along to get them back where they were within a few weeks or months. I think you can guess how that usually turns out. Add to that, even when working decent paying jobs, financial responsibility is still pretty rare.
Half of all people in the United States actually spend more than they earn each
month – but they don’t really feel like they are in debt or stressed because
there’s always another paycheck coming, which is going to catch it up and
they’re going to be fine.
In addition to living paycheck to paycheck, around half of Americans also have very little to no savings, according to Linda. She says that it is absolutely vital to keep three to six months’ worth of reserve funds set aside at all times in case of an emergency or a bout of unemployment – something I should probably start doing. “It’s virtually impossible to go through your entire life without some period of unemployment,” Linda said.
This stuff should all be expected when it comes to financial troubles though, really. We hear about it in the news all the time. What you don’t hear about as much, and what surprised me, was when Linda told me that:
A number of the clients I’m dealing with have got children between the ages of
eighteen and twenty-two living at home with them contributing nothing to the
household, and they can’t afford to continue to support their children and
that’s part of what is an issue to them. They’re not going to school and they’re
not working.
I mentioned earlier that the reason we cope with economic downturn differently from our forebears is because we are essentially a different sort of people, but that’s not exactly true. We might have been raised with television and fast food, but deep down most of us are still just as proud and stubborn as the Americans of the 30’s – and that’s a problem in this case. One of the biggest obstacles for people seeking help with their money, even when homelessness is imminent, is shame. Once that first call is made, however, many of her clients set their teeth and get to work. “Half of the people I see need just one appointment. They need a wake-up call.”
I mentioned in my first post that part of what the Partnership does is to make sure that people don’t fall through the cracks in the first place, and I think this is an example. Just remember, if you lose your job or find yourself making much less than you did before, there are resources available. Linda told me that she loves her current work and that she wants even more people to call so she can help them. Why not give her a call if you think you could use some help or just your own wake-up call? It is free. The number is 423.421.1367.
MONEY LINKS
annualcreditreport.com - A credit reporting service that is actually free. This website provides, as mandated by the federal government, one free credit report per year.
fdic.gov - A good source for economic and financial news, but this site can also lead to a number of useful resources and tools.
moneychimp.com - A resource for people like me who honestly don't understand a lot about finances on the macro OR the micro scale. It also has a very handy debt calculator that can show you how to make the sorts of payments necessary to actually get out of debt.
No comments:
Post a Comment