Middle Class poverty

[SoCalDem]

If everything you have of real value is your home-equity, you might be poorer than you think..

That equity is only "real" if you tap it. If you leave it alone, it's only valuable "on paper". It may allow you to borrow more (more debt?) or to get more credit cards (interest rates and terms are getting squirrely)..

If you sell the house and can get a good price, you have that equity in cash...BUT where are you going to live now? Buying in the same area will probably get you less house than you just sold or put you deeper into debt with the purchase of a more expensive house and NO equity this time around.

What if you use the rest of the equity to pay off those credit card bills and "get a fresh start"?.. Good luck to you.. Most people who do this, continue to amass debt, only this time around they have no equity left to pay it off, and their payments on their house have either started over at year #1 of a 30 year term, or they have bought into the "variable rate-low interest" myth. The boom in equity-paid credit card debt just turned unsecured debt into a 30 year secured commitment.

What happens when one of the homeowners (assuming a Mr & Mrs) loses a job or is downsized into a lesser position, paying less money?

or. what happens if you need to sell that house, and there are no buyers for the price you need?

How many months' take-home salary do you have banked and available? What happens to the company-offered health insurance if you lose the job? Can you afford COBRA payments if the main breadwinner is no longer employed?

The thread about dumpster diving sounds like a farfetched thing to most middle classers, but we are all in as much of a bubble as our dear pres is. Our bubble could burst at any time, and most of us are unprepared for what might happen.

We always assume that we could always find a better job or at least another job, but that's only because most of us have always done it before.. That was then...this is NOW. Things are different.

There was a time when positions for bank tellers would languish in the classifieds, and those were not actively sought out jobs. Fast food jobs were traditionally after-school or summer jobs for teenagers.. Retailers were ALWAYS looking for employees..

These days, even those menial jobs have many more applicants than necessary to fill the positions, and people will put up with a whole lot o' crap at bullshit jobs, because they fear unemployment so much.

Debt is strangling the middle class, and as far fetched as dumpser diving seems to most of us, take a look at your own finances and tell me that your family could weather 6-9 months of total unemployment..

Remember..your expenses continue, even if your paychecks do not.
Your debts are not forgiven if you suddenly cannot pay
Your car is not YOURS until you have made the last payment
Your kids will still want the $80 shoes, even if you are broke
Do you have family who could put up your family, pets and all your "stuff" while you get things together?

Where DO you put all your stuff if you lose your house?

Starting to feel a kinship with those dumpster-people?

I suspect that a lot of us are about 3 or 4 paychecks from being their co-divers:(

[boobooday]

1. Of course

And that keeps us at our desks, working away, fearful of taking a stand, seeing our coworkers as threats rather than allies, because we live on the edge, and have too much to lose.

And that's just the way they want it. It serves the corporate masters very well.

[TallahasseeGrannie]

2. I agree and I used to live hand to mouth

waiting for payday, bouncing a few checks to get by.

But about ten years ago I just got sick of it and became a saving freak. For a few years I wouldn't buy anything new. Goodwill only. My kids survived and so did I.

I am not trying to be insensitive. There are old folks eating catfood to pay for meds. But a whole LOT of us think we are entitled to every new piece of whatever that comes down the pike. It is how WalMart stays in business.

I think the most powerful things we as DU could do would be to stop consuming. Obviously there is a limit, but geez it would send a message so loud.

However, this is "wisdom" that comes with age. I would have laughed in your face when I was 35 if you had given me the same advice.

[SoCalDem]

3. Yep.. we started downsizing a while back..

When our grown kids said.."You know Mom, I have always liked....". I would say. Please take it NOW!

Where I once drooled over stuff like hutches & matching dining sets.. I gave our oldes our huge oak hutch..complete with antique china and assorted crystal etc.. I asked the other two sons first, and got a solemn promise for them all that if someday one of the youngers really wanted some of that stuff, it would be shared...for the moment (and probably forever) that stuff if gracing the dining room of our son's house, and i have a lot more space..

I am valuing empty space a lot more than "stuff"..

I rarely buy clothes..of course a lot iof that is vanity.. I don;t LOOK as good in clothes ( or out of them :puke:..) as I used to , so why waste money on some new stuff that looks about the same as stuff i already have?..

just sayin..

[TallahasseeGrannie]

8. You know when it hit me?

My mother used to love to buy antiques...just moderately priced things like cut glass, china, etc. And she treasured many of the little heirlooms she had inherited. Then my dad got dementia and after five years she couldn't take care of him and she went to live in a nursing home with him, although on a different floor. She gave all that stuff away. Just gave it away like it meant nothing.

And I realized it did mean nothing. Since then, I just haven't cared very much about stuff.

Plus I live in a house with four adults and two infants and stuff is the bane of our existence. We trip over stuff.

[SoCalDem]

10. In the final anaysis, most of our "stuff" will outlast us all

and it's just "stuff".. We save stuff that we just KNOW our kids will want "someday" and after we die, they laugh at all the JUNK we saved and have a giant garage sale :(.. I saw my sister do this when my beloved aunt died.. I boxed up a lot of things that had no monetary value and shipped them back to my home, but in the end, MY kids will probably throw it all out anyway..

We are tragically attached to our "stuff"..and when we are gone, most of it survives us and becomes a burden for those we leave behind.:(

[TallahasseeGrannie]

13. Indeed

I have a sister who is single but lives in a large house and she inherited my mom's affinity for stuff. She is a very bad alcoholic and while she has been sober two months, there were times this past year when I just knew I go to her house and find her dead in her bed. She had been hospitalized five times this year, etc.

And I would think about what to do in the end, as I am her only family. And with the amount of "stuff" I have, all I could think of was an estate sale, which I have always thought were the saddest things in the world. But that entire house and no place to put any of it.

We are a very affluent nation.

[Horse with no Name]

32. I guess I was lucky (?)

because stuff became immaterial to me before I hit age 30.
I used to HAVE to have a new car, a new couch, art, a new this and a new that.
However, after being in an abusive relationship, I remember the Doctor that I worked for told me he would personally put me in a new house, etc. just to get me out of my situation.
He was tired of seeing my black eyes and bruises.
I remember telling him I couldn't leave cause that was MY STUFF, not his.
Finally at some point down the road, it finally dawned on me what price I seemed to be willing to pay to have that STUFF, only then could I start understanding the real price that people are willing to pay to have their things.
Today, I love the Goodwill, I love the thrift stores. I love my $20 couch.
There really isn't that much that I love materially that I HAVE to have.
It truly is replaceable.
I could walk away and do just fine if I had to.

[TallahasseeGrannie]

44. That's just the way I feel

actually if I could walk away from it all I might even be happier.

[tsuki]

42. I have pulled my "good" dishes out of the cabinets and am using

them every day, same with the glassware and stainless. Son and daughter are set, and no grandchildren. What am I saving them for, yardsale or auction house?

A lot of thing are going to be gone soon. They can take what they want, the rest will be sorted and disposed of (except for my books...never my books.)

[DarkTirade]

41. Except for those of us who are living paycheck to paycheck...

and who have to be savings freaks just to make rent at the end of every month. :)
That reminds me, I need to stop by GoodWill, I haven't in a while.

[TallahasseeGrannie]

45. I hear you

and I've been there.

You know, there are lots of good sites (sorry, no links) about the "art" of living very frugally. They make it fun.

[KoKo]

4. Look at "Capitol One" credit card ads...for all one needs to know about

"Middle America." In many of their so called holiday ads they feature "PILLAGERS AT HALLOWEEN MUCKING UP the HOLIDAY...at Christmas they used SAME PILLAGERS MUCKING UP CHRISTMAS (Christian Holy Day) and "Lending Tree" who has an ad showing the "Suburban Debt Guy" who is mowing his lawn while he does a retrospective of his high priced Bar-Be-Que Grill, his Golf Membership, his new SUV, and his FANCY HOUSE and he complains.."I Dunno' HOW I'm going to pay for this!!!

His kids are probably in Private Schools or Voucher Schools and he probably eats out on his credit card five times a week and the AD really is going to the heart of "Upper Middle Class America" who is in HOCK TO BUSHIES Credit Card Companies to the Ying Yang...and yet..everything they belong to gives them a "Social Interaction" that many of us on DU can't even DREAM OF!

We...on DU being "Fringies!"

It's AMAZING ...isn't it. Ads "in your face" and still most Americans don't wake up and "smell the coffee." :shrug:

Blows our "latter 20th Century Minds Mentality"...doesn't it. :nuke:

[stevedeshazer]

5. You've just described my family

I'm looking for a job in this bold new economy and coming up empty.

My dog had to go to the emergency room last week.

Savings? Forget it, they're gone, along with my 401k.

My wife still has a union job. The radical right is slowly chopping away her pension.

Our house still has value, for now.

And did I mention we're also helping my elderly mom?

Time for another tax break for Corporate Amerika? Let's roll.

[Habibi]

6. We don't even have "paychecks" anymore

My husband and I both do contract work. We never know from one month to the next what our income will be. If things are busy at the company we contract with, we'll do okay. Not great, but we'll get by. My husband has a couple of other, minor "income streams" and I'm looking to develop the same. This is a far cry from the nice salaries we were both making 2-3 years ago as computer support drones. We own our cars, but they're both old and could go any time. We have a small house and a manageable (for now) mortgage. At this time, we have no credit card debt.

We are getting by, not getting ahead. For now, that's something to be grateful for. But you're right: one big financial crisis--an ongoing health situation that prevented one of us from working, or some other major problem--could put us in deep shit. Thank goodness we don't have kids.

[MountainLaurel]

7. Funny you should mention this

My husband and I were having a discussion tonight about the trends regarding formerly "good" white-collar jobs that now are almost only available on a part-time, or contract basis, such as Microsoft's legions of "independent contractors" and the use of adjunct professors who get paid $500 to teach one class. No health benefits, retirement plan, or knowing how long you'll be able to remain. Or, jobs that are increasingly using paraprofessionals to handle duties once covered by more highly experiences and educated workers, such as LPNs and physician assistants taking over the work of RNs and doctors, or paraprofessional staff in place of degreed librarians.

[DBoon]

11. or the "professional" jobs being outsourced to developing countries

like financial analysts, tax preparers, etc.

[MountainLaurel]

12. That too, certainly

As well as medical work such as reading x-rays to make a diagnosis.

[havocmom]

14. Medical transcription, mortgage processing

even tax return processing going overseas. Which means less people here making decent paycheck AND paying payroll taxes.

Gee, where's that gonna lead us?

Only jobs soon will require wearing olive drab and making the world save for corporate pirates. The really cool part of everybody having to volunteer to join the military: folks in the military don't have the same rights as civilians. bush and the neocons aren't nuts. They know EXACTLY what they want and they are getting it.

[Jamison]

48. Yes the job market is terrible.

Corporations are looking for the cheapest source of labor possible.

What can't be outsourced get "insourced" by immigrants. They figure "Why pay an American $45,000 a year to do a job that an immigrant will do for $8.00 an hour with no benefits?"

I've read recently where some corps are actually outsourcing from India and Mexico. Wonder why? As the standard of living has creeped up a bit in those countries, labor is just getting too expensive for them. People in places like Indonesia and Bangladesh will work cheaper.

[bridgit]

9. america under bush and the republicans = sometimes, even poverty...

with a view :thumbsdown:

[SmokingJacket]

15. I've dumpster-dived in my time.

People throw away good stuff. Really! I don't understand it, but I will take advantage of it if I need to.

Though I live, for the time being, a nice middle class life (one car, one house, $20 shoes for the kids, eat out one lunch a week) I feel pretty confident I could survive on less. I empathize painfully with the homeless, knowing it could have been me and might well be me in the future.

Could be any of us...

[SoCalDem]

17. We got our first lawn furniture from someone's junk

Just re-webbed it and it was good to go..and better quality than what was being sold in the stores.. and we have "rescued" many bicycles and some pretty good fruniture from the tarsh:)

[noamnety]

28. dumpster diving doesn't have the same stigma in other countries

When I lived in Germany, I was surprised to see they had trash days scheduled occasionally in my town. A few days a year, everyone put out all their stuff that they didn't want anymore just at the edge of the street. There were designated hours for it. Everyone in the town would go up and down the streets (with flashlights after it got dark), taking whatever they had a use for. It was a big social event, like Halloween here, except for grownups.

We got a very cool wooden sled there at trash day, 18 years ago. Just yesterday, I took my daughter to the airport to go back to college after winter break - she made us get the sled from the attic so they could use it on campus. (Their dining hall had to buy a bunch of sleds to keep kids from using the dinner trays, but the sleds they bought were cheap plastic ones.)

We have a little of that with freecycle sites now, but it would be great if efforts like that had more visibility, and were sponsored by local town councils.

[w8liftinglady]

36. lol..I still dumpster-dive

I can't stand to see "good stuff" thrown away.The local Goodwill loves me
:dilemma:

[SoCalDem]

40. I do "curb-rescue"

soome dumbass neighbors put a crib in great shape out for the trash.. Before the neighbor kids could get to it and trash it, I went and got it and gave it to a friend who is expecting a grandbaby. They cleaned it up a bunch and painted it ,a dn now they have a crib for when the baby visits:)

[catmother]

16. we're okay. wasn't always that way. but my husand has 36 years

with an international computer company. once he reached 30 years he was entitled to a pension, but it wouldn't have been enough back then. if he had to retire tomorrow (outsourcing) we could make it but would have to watch our pennies. even though the company would give him a "social security leveler" they would take it back with interest when he was old enough to collect. so we don't want to go that route. if he can hold out 4 more years till 62 we'll be okay. we paid cash for our cars. put a big downpayment on our dream house. the house is worth $700,000 -- i'm told it's worth a million but i believe that's an inflated price right now. we only owe $96,000. i've been making extra payments toward the principal. we use our credit cards like cash, pay the balance every month and get 1% cash back. we have a nice amount in the 401k and savings accounts. we also live under our means, never go out to dinner. we go out for a late lunch and get a meal for 1/2 the price would be for dinner. we don't go to movies. we have direct tv, hbo, sho and netflix. i don't work so i don't need a lot of clothes. he can dress "casual" for work.

now the bad news. we have a long term disability policy on him, but they won't insure me because of drugs that i take for chronic fatigue sydrome. so if i were to become disabled for a long period of time we would lose everything and that's very scary.

[SoCalDem]

18. The health insurance issue is what dooms us all in the end

My husband will be able to retire and get ss in a few years, but I will be uninsurable as well and "good luck to me"..I will have to somehow make it the extra 6 years until I am eligible for medicare..

[catmother]

19. i'm eligible for medicare now. i'm on social security disability

but medicare does not cover long term illnesses i.e., nursing homes, assisted living, etc.

i would feel so much better if we had universal health care. i think most of us would. my sister lives in canada and doesn't have to worry about getting ill.

you can probably get a policy unless you have a pre-existing condition. it's expensive though. my younger sister paid $300 a month with a $5,000 deductible.

[SoCalDem]

20. I should have applied way back when I was eligible, but I did not

and now I have not worked for so many years, I am no longer eligilbe through SS, so I will have to wait..

[catmother]

21. i think you can still apply. they just don't give it to you retroactively

for all the years -- but i think they go back a year and a half. that's the way it used to be. check it out -- you have nothing to lose.

[SoCalDem]

22. It's been way longer than that ..

I was not on the ball when I should have been.. clinical depression does that you you :(

[catmother]

26. okay, yeah. i think i remember it had to be a certain amount of

time since you stopped working. you know they would have given it to you easily. they love to give it on mental. i had to fight and get a lawyer because chronic fatigue didn't fit into their grid at the time. it's different now. my friend has chronic fatigue and depression. she also got a lawyer, but the judge told her right then and there that he was qualifying her and she had a choice whether to take it on the chronic fatigue or the mental. her lawyer advised her to go with the chronic fatigue because the mental would stay on her record.

the thing that pissed me off -- i had to fight so hard -- they turned me down 2x -- almost like saying you're a liar and 5 doctors are liars. i knew that if i wanted to pull the wool over their eyes i could certainly fake a mental condition and not have to have all the grief.

i hope things work out for you. i take prozac -- it's supposed to help with the energy level, but i think it helps me deal better with being ill -- although i do get depressed at times. i've been ill for 16 years. i don't wake up till 9:30-10 am. i'm usually asleep by 11 pm. so after doing a little work around the house it only leaves we a small window of time to go out and food shop before the stores get crowded or i hit traffic. i've become very claustrophobic (sp?) can't be around crowds. no social life because i never know how i'm going to feel till i get up in the morning. and by 6:00 at night i'm settled in. i can't really go out at night. i'm too tired and i just watch tv.

[bleedingheart]

23. we are still living in our "starter" home

found that with both of us working and the way the economy is going that moving to a larger home makes no sense...hell we aren't spending a whole lot of time in our current house with both of us working and with the kids activities.
I watch as many of my friends (mid-thirties) are turning over one house for another and going deeper into debt...and they wonder why tooth grinding is on the rise.

[lonestarnot]

47. Maybe should buy stock in teeth molds for grinding teeth.

[CrispyQ]

24. I am married to a very smart & practical man,

who doesn't have the affinity for stuff that most people do. He always says, "You can't always control what you make, but you can control what you spend." (With the exception of those unfortunate events -- generally health related.)

For a long time I was upset that we stayed in our little house & saved money instead of ramping up our lifestyle like all my friends have done. In '99 we paid off our house & he offered me the opportunity to take a year off. It turned out to be 2 years & it was the best time of my life! It was also the time I really kicked the stuff habit. Now, he is taking time off. He was laid off a week after boosh's re-selection & he's been off since, by choice. We live on my part time salary.

It is has been so freeing to not be hooked on consumption & keeping up with the mythical Jones'. Those years of envying my friends big houses, big cars, new furniture, their many vacations have changed. Now they tell me how fortunate I am to be able to afford to work part time & I can see the stress on their faces & in their daily lives. And I know some are barely hanging on & I wonder how much they like their big house & brand new car now.

Another thing that I think people should work toward is getting in the best shape they can. Get your weight under control & start a comprehensive exercise program -- aerobics, strength & stretching. Start eating whole foods, not processed crap full of chemicals, sugar & fat. If you can afford organics, buy them! If not, they have done studies that even eating more non-organic produce is beneficial. The older you get, the more urgent health care issues will be. Start now so you can enter your 'golden years' as healthy as possible!

[SoCalDem]

25. If your climate ir right, you can grow some of your own organics

When we had a big garden, it was wonderful to just go out an pick something up for dinner..literally..:)

[CrispyQ]

30. You are right on.

Growing our own food puts us in touch with nature & I beleive, those who do this will benefit in ways we cannot imagine at this point. It could very well be our survival will depend on what we grow in our backyards.

[bleedingheart]

27. you can see the stress in people's faces

and it extends to their kids as well...when mom and dad are worrying or fighting over money issues it isn't healthy for them either.

I am looking forward to the day we finally pay off our home..

[fed-up]

29. I will (hopefully) sell my house in the spring, pay off debt and downsize

to a smaller house for my son to live in cheaply while he goes to college in town. This will enable him to live without a car which he says he doesn't want anyway.

This will pay off all debt, but may require just a small mortgage if I can wait a few months or longer before I buy in the event that housing prices go down (after I sell mine). I will be moving in with my boyfriend and having a house in town will give me an emergency exit (roof) and investment if things don't work out.

I am just too worried that the economy will get even worse in the next three years and that I will continue working just to pay the bills. Bills have gone up over $400 a month in the past five years just for the basic necessities (Gas, utilities, insurance and food), while my income has dropped. I have neck problems and can't always be sure that I can work as much as I'd like, and I want to at least have "fun money" when I do work full-time.

I also wish that I had filed for disability 6 years ago, but being the independent person I am, thought that I could make a living if I could work my own hours as I was able. Dumb mistake!

I don't buy "new" and have been known to dumpster dive for stuff!

[SoCalDem]

31. Fingers crossed for you.. We plan to do a similar thing, but we have

to wait until 2009 (when my husband can get his full SS benefits).. Hopefully the CA market will not be total shit by then and we can net enough to buy a manufactured home on a patch of land somewhere else.. We already know that we will not be able to afford to live in CA.

With no house payment or rent to pay, we should be fine..but I still worry about the medical stuff..

[kineneb]

33. fell out of middle class, now "poor"

nothing like being over 50 and losing your tech job in a massive layoff...that was Hubby in 2002.

We used to be lower middle class, now we are living on his disability payments. Luxury is being able to eat out at modest local cafes. We splurge on dining because we are not sure how long he will live. He is on dialysis and has congestive heart failure. Saving for the future is not allowed by the system, because he needs Medicaid to pay for his medicines. (Not that we could save much on $13K/yr.)

So far I have not resorted to dumpster diving, but thrift stores are my first choice for what little shopping I do. We have family and friends that make sure we have food in the house as well. Once in a while I purchase something nice for the house, but I have been working on getting rid of lots of the extra stuff in our lives.

[The Sleeper]

34. there's stuff, and then there's STUFF

I 've got too much stuff, but I'm very lucky to have some STUFF. I've got a couple of vintage cars, and I'm a musician who has been lucky enough to acquire some fine old instruments over the years. None of these things cost very much at the time, although some have become valuable since then. These items are a part of history, and I'm lucky enough to be their custodian for awhile....

[Peggy Day]

35. That's so real, now I'm really depressed!

[SoCalDem]

37. Don't be depressed, Peggy,

just be ready :)...and welcome to DU, in case no one's officially done it :hi:

[Peggy Day]

39. no, I haven't been "officially " welcomed, but I love y'all

but that picture reminds me of me saving my brothers' life. He was sticking a fork into the socket, and I prevented him from completing the task.

[lonestarnot]

46. Well get a cheer on Peggy Day and welcome to DU!

:toast:

[earth mom]

38. Thanks for posting this! Recommended!

Dh and I are so there! Our house equity is the only thing of value we have. We've thought of trying to downsize (not that we're living large in a 100 year old fixer upper!), but as you pointed out there is really no where we could move to around here where we could buy something less expensive and at the same time be able to bank our equity. Since we have been a one income family so that I could take stay home and take care of our child, and due to the crappy job market out there, we have struggled for YEARS! We have lived paycheck to paycheck for what seems like forever and have NO savings. We did manage to pay off some bills with a refinance a few years back, but we are leary of borrowing more from our homes equity even though our house needs a new furnace and roof. Dh and I well know how very close to the edge we are!

The only upside right now is that Dh will be getting a good raise in a couple of months. As well, he will be transferring closer to home and in doing that will get about 10 to 20 hours of overtime a week at the new work location. We hope to get our new roof and furnace the old fashioned way-by saving.

Meanwhile, we're keeping our fingers crossed that we stay in good health.....

[area51]

43. "...weather 6-9 months of total unemployment."

More like being unemployed 2-5 years in this 2nd Great Depression economy.

For those of us who are single & lose their jobs, we are well & truly fucked.

[SoCalDem]

49. Actually, singles have a bit of an advantage in some ways

It's probably easier to tell yourself "no", than it would be to tell your child "no".. and you are fairly mobile , and could move somewhere in a hurry..

I am sorry for your tough times :hug: