Hard choices

With the economy still recovering from the worst financial crisis in decades, many Americans are struggling to make ends meet. And times are especially tough for Americans with low-paying jobs – the working poor – who earn too much to qualify for many government benefits, but still not enough to be financially secure.

To gain insight into how families like these get by and learn what might be done to help them, Need to Know’s Stacey Tisdale traveled to Newark, New Jersey, where she met one family whose plight illustrates the situation millions of Americans face.

We asked this family to keep a detailed diary of their monthly income and expenses to show the difficult spending decisions they face each month. With little money nor financial savvy, the family incurs additional expenses simply because of their economic disadvantages. Our inspiration came from an innovative new research project called the US Financial Diaries, which is following 300 families for more than a year and tracking their cash flow with the goal of improving policy and financial products for this under-served population.

Near the end of our report, Juanita and Andre met with Greenpath, a nonprofit debt counseling organization. A counselor there discovered some unnecessary credit protection fees being charged to one of Juanita’s accounts, which was undermining her efforts to pay off some of her debt. The counselor also convinced Andre to open a bank account to avoid the check cashing fees he was paying each month.

This report is part of our ongoing series “Your Money and Your Life.”

 

Comments

  • Gustavo Corral

    The bottom line is that Juanita and Andre have a choice : they could give up their car ( and use public transportation ) and cable and get a slow internet connection and then have money left over for emergencies. The real issue is that they are living close to their income level instead of leaving room for problems. 
    So the real policy alternative is designing programs that incentivate them to save more during good times so they have something to draw on during emergencies. 
    Or the rest of us can continue to pay for the emergencies that are sure to come but that as a mature society we don’t want to see. 

  • Jvmadaraz1010

     Gustavo Absolutely Right, as a Latino myself in central Florida, I will be the first to admit my racial brethren Make the same continuing stubborn patterns month after month, I own a home on Disability 71 % Less income than they have I am 125 miles away from the nearest metro area I have a Digital Antenna for rural areas that gets 40 channels crystal clear form Miami!! They are in Newark 100 channels Over the Air??No Bill, and 50 % are Latino programming, I have internet but its blended with my phone,  I take a bicycle everywhere(Despite my disability) My Gym Membership is to Anytime Fitness(nationwide 24hr open a day)is $25 a month I shop at SaveAlot and Dollar tree  and stay away from Large Discount stores and High end Supermarkets and for cell they could take advantage  if the SafeLink Network, as for the Cats, that’s why there’s no furniture except for the dead the cat, on a folding chair?? And the sob story about the unemployment ending, had they adopted even 1/4 the measures, the cable, she would have had in one year $280×12=$3360 in (her)Juanitas pocket right now, but once again, La-renta! La-renta! is do, Manana manana, She should have  been looking at that Unemployment check as a balance dwindling down, The friend he gives $ 30 dollars to for medicine, what line of bunk that is, hes not eating lunch and worried about his health ?,starting eating lunch(made at home) Its the typical Latino story living exclusively beyond your means, If a choice between a car and a parking lot and living in the streets, well My Mortgage is paid, I always have said I rather starve with a roof over my head, then in the streets
    The truth of is they only had $10 amongst themselves when everyone was working , nothing really has changed,there living like bigshots then and now  Need to Know certainly picked the dumbest apple(s) in the bunch for this segment

  • Gigi

    It is unfair to all of the people out there that are living on half Juanita and Andre’s income each month that this is the family that you chose to spotlight for this project.  This seems to be a family that has all its priorities in the wrong place, a family that is mismanaging its money rather than a family with half (or less) their income and just cannot make ends meet for even the essentials/necessities.  Don’t get me wrong, I don’t believe that this family is ‘trying to get over’ or anything like that, because I truly believe that Juanita and Andre just don’t know a better way or haven’t stopped, sat down and truly thought about how better to manage their money.  This airtime should have been spent spotlighting the family that is living on minimum wage or one income of $10.00 per hour or that has a mortgage or rent of at least 50% to 75% of the family income, because there are millions of people out there living like that.  This family has a combined income of $35,000.00 per year, that is well above what many average families are living on in this economy.  This is how it goes when you are struggling:

    #1:  Mortgage or Rent
    #2:  Utilities and phone bill
    #3:  Car payment and car insurance (because in most places a car is a necessity)
    #4:  Groceries
    #5:  Gas and car maintenance

    So, let’s see:

    $2,915.00 minus $400.00/mo. Rent equals $2,515.00 minus $750.00 on car equals $1,765.00 left over to pay utilities and phone bill, buy gas and car maintenance and purchase groceries, and to divide the balance among their creditors.

    This family is guilty of grossly mismanaging their income, not of not having enough income.  This family should be guided to a financial counseling service while this project focuses on the millions of Americans that are struggling to live on far less income or one income and/or or do not even have a car and/or access to public transportation.

  • http://twitter.com/Darden313 Donald Earl Cole

    The issue of how those making less than thirty thousand dollars a year are managing during the Great Recession is of importance to all Americans and should be of concern to both political parties the disappearing stability and the middleclass which not allowing many to enter due to the economy, The Republicans refusal to pass the jobs bill. That was offer by the President rather during an austerity program to hurt the poor and middleclass even further.

  • Jonasdatum

     You missed something very critical. Many (most) cities in the United States Of America have very poor public transportation networks. Unless they live in NYC which is amongst the most extensive on Earth despite the cutbacks in recent years, there ‘best’ option is to keep the car.

  • wjhd

    Where are the comments that were here two days ago?  Are these comments deleted for some reason?

  • Matyas Sustik

     I commend the journalists for tackling this issue, but I have a few critical
    comments about the report. I want to emphasize first that I still give a B to
    this work, where C is the average in my grading with the usual drive by news
    (not found on PBS) is getting a D or F.

    It is necessary that a report should create new questions.  However, it is
    preferable to explore the background and facts around the naturally arising
    ones. Otherwise viewers will get frustrated and may perceive the report being
    distorted by hiding some facts and pushing an agenda.

    In this example, I have the feeling that for many viewers the report will
    immediately trigger questions regarding the amount of responsibility the
    featured family has in their financial situation.  There are comments and
    discussion regarding this, especially in the second half, but will all
    viewers get to that part?

    I think that viewers from the political right will feel that the report
    intends mainly to evoke empathy and not finding a solution.  A solution that
    probably entirely consists of making better decisions by the family
    portrayed. I do not agree with the “entirely” part of that assessment.

    In selecting the family portrayed the journalists could have picked one not
    headed by a single woman or explain that that is the most common case and
    explore the circumstances (divorce, husband lost in war, etc.).  The gut
    reaction from a right-wing viewer: “Where is the husband?” will reduce the
    chances of a successful dialogue. The mother does not have a high school
    diploma.  At least one of the sons has a smartphone and they spend $280 for
    the cable, internet, phone combined. There was no better family found to
    portray? One which demonstrates that they made the hard but right choices and
    they therefore unarguably deserve the help from society?

    When the mother is asked about the cable bill, she says that she needs the
    internet for job search. It would have been appropriate to mention that one
    can have just internet without cable and that libraries provide access too. A
    smartphone is a waste from their financial standpoint, a pay as you go
    no-contract talk only plan would be more appropriate.  We do not know whether
    they are locked in to a plan, but the long unemployment (it is mentioned it
    may run out) may indicate that they could have ditched the plan already. Note
    these are not the kind of questions that should be left unanswered. If the
    report has no time to cover these aspects, then pick a family that does not
    have these issues.

    We do not know the details of the car expenses, just that it is very high
    ($734).  This is quite frustrating for an educated viewer. They drive a Honda
    sedan which I assume has decent mileage and could not cost that much to
    purchase.  So we suspect that it was purchased new and the interest on it is
    frighteningly high. This ties in with the comment by the son who wants to be
    a special education teacher but has no concept about interest.  They pay
    check cashing fees… Is there no credit union they could join? The gym costs
    seem also excessive, I have a hard time believing that there was no cheaper
    alternative.  The cost details are not broken down where it matters (car,
    gym, phone/cable) but the $1.5 cost for coffee is featured. How did that make
    sense for the journalists?

    The background and answers to the above questions should have deserved some
    exposition.

    Of course the big question of the segment has been formulated and some
    discussion was included: Why do people make bad choices? This probably cannot
    be answered quickly and this should be the one we concentrate on. The other
    questions (trivial in comparison) that are brought up by the report are
    unfortunately getting in the way.