Need to Know: July 27, 2012: Living on the financial edge

This week's host Ray Suarez

In our ongoing series “Your Money, Your Life,” Need to Know takes an in-depth look at the difficult spending decisions facing the nation’s working poor.

This week’s episode profiles one Newark, N.J. family, who keeps a monthly financial diary detailing its expenditures, including the additional costs incurred by living in a poor neighborhood and by not using available banking services.

Anchor Ray Suarez interviews Rachel Schneider, Vice President at the Center for Financial Services Innovation and a lead investigator for the U.S. Financial Diaries Project.

The “American Voices” essay is by Mae Watson Grote, founder and executive director of the Financial Clinic, which services the working poor.

What’s on this week:

Hard choices

One family in Newark, N.J. keeps a monthly financial diary of expenditures, which demonstrates the difficult choices made each day by Americans living on the outskirts of the mainstream financial system.

Interview: Rachel Schneider

Rachel Schneider, Vice President at the Center for Financial Services Innovation and a lead investigator for the U.S. Financial Diaries Project.

American Voices: Mae Watson Grote

This week’s essay is by Mae Watson Grote, founder and executive director of the Financial Clinic, which services the working poor.

Watch more full episodes of Need to Know.

 

Comments

  • Anonymous

    1-Put the cat to sleep.
    2They live in Newark. Plenty of public transportation options available. LOSE THE CAR!!!!

  • http://www.facebook.com/frank.andolino.9 Frank Andolino

    More people will be living in poverty if Romney is elected, 

  • Raven

    Use a bike. Drop the TV cable and internet they are luxury items. Use the library for job searches.
    Walk.  Not taking medication will ensure a hospital visit. OR, get a combination phone internet package, its possible to drop that down to $45. Pay the credit cards before everything else, the interest rates will cost you more in the long run. Get a bank account and stop cashing checks at a check cashing service, get a direct deposit with online banking.  Seems like you have the right ideas, but are not cutting in the right places. Food is not a luxury item to go without. Pets are luxury items, find them new homes if possible. These steps will save you close to $400 a month. Get on it.
     

  • Jake

    These people disgust me. They have a much nicer car than me and have an extravegant cable TV package.  Can’t believe the taxes I pay are wasted on their unemployment benefits and food stamps.

  • M Goel

    You Americans are the most draconian non-Christians on this planet! I am shocked to read remarks like “put the cat down”, “walk”, “bike”, “sell the car”. This is the richest country on the planet. Even now, the richest country on this planet. Despite the financial crisis and emergence of the bourgeoning economies of the east, THE RICHEST COUNTRY ON THE PLANET! How can you possibly have such contempt for your fellow citizens and want them to do without something so fundamental as a car to get to work and back and a pet who is a member of the family that you wouldn’t want to part with? What is wrong with your country and your mode of thinking? I’ll fully concede that the car this family owns is too expensive but for a family of three to share one car is not too much to ask for. Unless, of course, you feel that asking the mega rich in the country to pay 39% from 36% in taxes is too much but asking a family making $2910 a month to give up the one thing that gives them mobility and serves a valuable function is fair. What a country!!

  • Anonymous

    These three adults are actually only earning $1640 a month from work between them. From the government comes a $1160 unemployment check, $115 in food stamps and an unmentioned amount in housing subsidies. Zillow puts the median rental price in Newark at $1200 a month and this household is paying $325, so that would be another $775 a month in in-kind value. That’s real income as another family not having the government paying any of their housing costs would have to earn that additional amount to pay for the roof over their head. Earning that much more would also probably make that family paying for their own housing also ineligible for any food stamps. That’s $890 in additional monthly, after tax, earned income needed, perhaps $12,000 a year in pretax income, just to be on equal income footing with this family.

  • Bob

    If they sell the car they will have no gas/insurance/tickets/repair bills. They’ll walk or bike more and take public transport. Lose the cable and they can eat 3 meals per day. Come on, this is hooey. Prioritize needs. Meds/food before cable/internet/car/gym.

  • http://www.facebook.com/people/Sally-Hart/100000509506138 Sally Hart

    They need help prioritizing. Miss car payments and the car gets repossessed.  Miss an insurance payment and the insurance gets cancelled.  Maybe he didn’t know that just like he didn’t know what the APR was and what it meant. High blood pressure will kill you without showing a symptom. Talk to your doctor about generic meds. Find a competitive tv-internet-phone package.  Or loose the fancy channels, get basic cable and dial up internet. Food and shelter are the basics everything else is gravy. Internet access is usually available at the library. I am glad the show got the son to set up a bank account so he saves the $42 check cashing fee. A jar of peanut butter and loaf of bread will make a sandwich to take to work.  They need consumer education as well as jobs.  

  • Mtirinnanzi

    Good advice from Sally–smart ways to spend money and not feel deprived.

  • Evangelistrachelrodgers

    America, please do not get sidetracked by the fact that these 2 human beings; emphasis, HUMAN BEINGS, who deserve to have some pleasures in this life, are working, and trying to work within an economic standard that is strangling not only them but, countless other americans due to the process of devaluing the average working man, and woman, and conserted effort to evolve the socially accepted, and prevailing custom of “modern slavery”. Identified by long working hours, far less pay, high cost, self payed healthcare, and rising cost of living expenses.
    Minimum wage is outrageously antiquated, and in desperate need of an overhaul, and adjustment to, at the least $15.00 per hour. Add in the stablization of the 40 hour work week over the course of 4-5 days for full time employees. Then maybe human beings will be able to afford more than keeping the cable companies in thriving business.

  • Evangelistrachelrodgers

    If I could click “like” twice, I would.

    Well said. Bravo!

  • Evangelistrachelrodgers

    More people will be burning in the lake of fire if that “beast” obama is re elected.(Revelation ch.13/Daniel 7:25 kjv)

  • Jq1969mets

    never gonna be able in long run to pay cc bills
    file for bankruptsy chapter 7 now and get fresh start

  • http://profile.yahoo.com/6O6XAZ5VOL2RERTUQPB5ZJHOAE DJ

    These people are doing the best they can.  What they need are better paying jobs–it’s as simple as that.

  • Anonymous

    I
    watched almost all of the show and my intelligence is insulted by PBS.
    PBS is that the BEST example you can find for working poor. My husband
    and I are both self employed, which is “working without a paycheck”. We
    make together about 18 grand a year. I have a business that requires me
    to have internet access to sell my art online… I have internet but not
    cable. You can get internet without having cable and it is much
    cheaper. You can go without lunch, I do it every day. Thousands of children die of starvation every day and two overweight fat cat American have the gall to whine about missing lunch and swallowing a packet of honey. Are you serious???

    I eat breakfast and
    dinner and there are plenty of food choices that are quick and cheap
    but if you go out and eat take out it costs too much. Sure that’s not affordable but that does not mean you are starving. Stop exaggerating and lying!

    What
    is up with this grown man that chooses not to  do anything to
    contribute? This whole story reeks of misrepresentation. There are many
    people that are truly POOR and still work like my husband and I. Stop
    choosing the worst examples to make a point. Cancel Cable, get an
    account with a credit union FREE, eat mostly if not all grains, legumes
    and vegetables which are cheaper than meat. We can run circles around
    these people and our income is half of theirs and we have four cats.

    I
    was able to cut out my high blood pressure medication two years ago
    after going vegan. I save 60 dollars a month not needing medications
    anymore all because I chose to make a nutritional change that made all
    the difference. My health is now great, and I save money too. Walking
    would do that whole family good. That is not cruel to say or uncaring,
    it is simply a fact, when you go on TV, whining about only having 40
    grand a year to get by. Give me a break! The problem with American
    society is Americans have no clue what poor and hungry REALLY is.

    MY
    heart goes out to poor people including myself because those of us who
    have less than 20 grand and still work, do not take food stamps or any
    government assistance, we truly struggle. But I know there are people
    who have  even less than we have. I drive an old car that is not mine
    but a get to drive it in exchange for running some errands for a friend
    who is older, I do that about once a week and the rest of the week the
    car is at my disposal. The inside is peeling, all the plastic is falling
    off so is the ceiling fabric, it’s ten years old but it drives. There
    is always something to do if you look for work. it’s not ideal but
    that’s my life story. American are whiners and the media is playing it
    up and playing people like suckers. Stop wanting to look rich when you
    don’t have the means. Stop trying to keep up with the Joneses.

    I
    learned to live in poverty growing up in Germany my family  was always
    poor. I don’t know what it is not to be poor. If my husband and I made
    40 grand a year we would be rich and probably at least save ⅓ it not
    half of it.

    That
    being said much can be done to help truly poor people, but this family
    is NOT one of them. To use them as an example hurts truly the poor
    because eventually people just stop listening
    when they get insulted with a story like this..  

    Stop spending on anything that is just a want and not a need.
    How
    in the world do my husband and I survive… we never go out to eat, we
    do not go to the movies, we buy cloth as goodwill maybe once every two
    years something new at wal mart, yet we are actually pretty happy
    people. maybe the fact that WE DO NOT have cable has something to do
    with it. Less propagande to watch, we work seven days a week as two self
    employed people hustling to get by. Oh we also do not have a landline
    phone we have internet phone which is much cheaper and there are many
    FREE voip choices out there.

    I know poor people that are actually HAPPY. Imagine that. You don’t need a shiny new four door car.

    These people don’t know what poor is neither does PBS putting this ridiculous example on the air!

  • None

    WOW! there living “HI OFF THE HOG”, by florida standards, how i wish i could live like that! nice new car!!!!!! my unenployment gone since last year, no car now, and florida is a LONG and HOT state for bicyling at 50 years old , and no mass transportation in fla, the buses take ALL DAY! NO JOKE!  no meds at all for my SUPER HI BLOOD PRESHURE,  no cable for 3 years now, buming intrnet, sleeping at my 80 year old mothers house, and i sill have it good compaired to others down here! 

  • http://pulse.yahoo.com/_CXOITMLTMCOTTFR377LMT4X4EU cleancut77

    Are these people supposed to be presented as sympathetic?

  • http://twitter.com/buddhabytes Buddha Bytes

    They are making horrible choices…$700 car payments, $250 in cable/internet/phone…I mean come on…give me a break.  They are NOT doing the best they can…they are creating their own reality. And a GYM membership!!!

  • http://profiles.yahoo.com/u/CVHFCY7YTNTZZ5NBXQDMMO3ASY Dr. Gonzo

    Dich the cats and the cable/phone. Buy a track phone or Voip. You can also get internet for $19.99. There is no point for them to pay bills (after 6 years they are cleared).

  • http://profiles.yahoo.com/u/CVHFCY7YTNTZZ5NBXQDMMO3ASY Dr. Gonzo

    Dich the cats and the cable/phone. Buy a track phone or Voip. You can also get internet for $19.99. There is no point for them to pay bills (after 6 years they are cleared).

  • AngryStrugglingMom

    Wow, this segment totally enraged & disgusted me!  And PBS, I’m so very, very disgusted with you for showcasing a family of 3 ADULTS who are fully capable of getting jobs and providing for themselves, instead of showcasing a family REALLY struggling with CHILDREN to raise!  Struggling?  This “family” isn’t struggling, I’ll tell you about stress and struggling.  I have a household of 3 – myself, my husband and our son – with only 1 income, mine – and 1 used car.  My husband lost his construction job and does NOT receive unemployment benefits, and we do NOT qualify for food stamps or housing assistance, nor does my son get gov’t health coverage - the only gov’t help I’ve gotten is 1 time help paying my utitlity bill, which I didn’t want to do but had no other choice.  Plus, I was involved in a horrible car accident that totalled my car and left me with severe injuries – I am awaiting spine surgery and am only able to work parti-time right now, so we are severely stressed and struggling!  I make approx. $1800 per month and pay $565 in rent, $300-$500 in utilities/gas/water, plus food, gas & maint. for our USED car, school & sport expenses for our 13 year old son, plus expenses for everyday needs like toilet paper and such.  I’m SICK sick sick of having to tell my son “NO” or “maybe when we have more money son”, it’s not far to him!!  I had to save for 3 months just to buy a used laptop and then got screwed, the darn thing crashed after using it once and now it doesn’t even work and we can’t afford to fix it or buy another one.  I just can’t believe these people — she quit a perfectly good job and is now complaining – I cleaned freaking toilets while looking for a better jobm at least it was some income!!!!!  I would tell these people to sell the NEW car and buy a used one, get rid of cable, quit wasting money on lottery tickets, and go to Walmart to cash your checks, they only charge $3……….just quit whining & complaining, there are a lot of people out here that have it way worse than you and most of your so-called “woes” you all brought on yourselves!  That’s part of the reason I don’t try for gov’t help, I know there are people out there who have it worse than we do and if we can’t do it or get it ourselves, we just DON”T!  And to all of you people who say that isn’t Christian-like, well let me tell you, God doesn’t promote a lazy mentality, he promotes a get off your butt and make something happen mentality!

  • http://profile.yahoo.com/6UX7EEI5DRABE7UUFSE6ADPK7Q William Hand

    I didn’t realize we qualify as “working poor.”  After paying for high-deductible medical insurance and pension contributions, we take home hundreds less than this household each month.  We have done without things that some might consider necessities: cable, vacations, nice wardrobes, costly entertainments, new cars, etc.  But we now have no debt and have been able to save for our retirement.  My fear is the government will penalize us (more than with low interest rates) for making these sacrifices.  
    I do feel compassion for this family.  They are in a hole and it is difficult to get out of, but they can do it.  They have initiative and access to the internet where they can learn anything!
    I would like to see where this family is in a year or two.

  • http://profile.yahoo.com/6UX7EEI5DRABE7UUFSE6ADPK7Q William Hand

    I didn’t realize we qualify as “working poor.”  After paying for high-deductible medical insurance and pension contributions, we take home hundreds less than this household each month.  We have done without things that some might consider necessities: cable, vacations, nice wardrobes, costly entertainments, new cars, etc.  But we now have no debt and have been able to save for our retirement.  My fear is the government will penalize us (more than with low interest rates) for making these sacrifices.  
    I do feel compassion for this family.  They are in a hole and it is difficult to get out of, but they can do it.  They have initiative and access to the internet where they can learn anything!
    I would like to see where this family is in a year or two.

  • http://profile.yahoo.com/6UX7EEI5DRABE7UUFSE6ADPK7Q William Hand

    I didn’t realize we qualify as “working poor.”  After paying for high-deductible medical insurance and pension contributions, we take home hundreds less than this household each month.  We have done without things that some might consider necessities: cable, vacations, nice wardrobes, costly entertainments, new cars, etc.  But we now have no debt and have been able to save for our retirement.  My fear is the government will penalize us (more than with low interest rates) for making these sacrifices.  
    I do feel compassion for this family.  They are in a hole and it is difficult to get out of, but they can do it.  They have initiative and access to the internet where they can learn anything!
    I would like to see where this family is in a year or two.

  • Anonymous

    When you don’t have a job, your job is, looking for a job. Where is grown adult son number 2 all day? Not looking or a job. I bet on that! But he does show up when food is served. Should be ashamed. Unless he contributes under that table. Wink Wink,,, PBS your story stinks!

  • Anonymous

    Oh and this additional expenses incurred because of living in a poor neighborhood. Yeah I guess if you drive a luxury car stuff will happen and not only in poor neighborhoods. Even my old car was damaged by thugs where I live. It’s a shame that you can’t have nice things without worrying that someone steal or damage them. But if you are “struggling” and are suppose to be “poor” how in the hell can you trow money away on some gated parking lot. In your segment I saw cars parked on the street, while your poor family goes to open up a gate to a secure lot. Just get rid of this thug magnet and drive something less inviting. Get back on your feet first.  By my accounting this family should have at lest an extra 500 dollars if they cut out the money wasters and that included the GYM Membership.

  • Reasonable Person

    Thank you for this enlightening show.

    I just had to add a comment to counter the many insane ones.

  • Private Private

    Instead of venting anger, I will just share my experience.

    I am 31, and live in an apartment with my fiance and 2 yr old son. I am a secdurity guard and my fiance works in a credit department.

    I make $9/hr full-time and my fiance makes $18/hr fulltime. I know what your thinking, “OMG $18/hr” but wait; she pays over $400 a month out of her paycheck for insurance for all three of us. My checks are $339.66 a wk and hers are $491.

    here is our month expenses

    Rent – $723 (one of the cheapest to be found near our jobs)
    Electric - about $130
    water – $30
    manditory renters insurance – $18
    Used car payment (we only have one car) – $398
    car insurance – 109
    Fiances student loans for art school that she was not able to complete – min payment of $66
    credit cards we opened back when I made $15/hr (I cannot find any tech jobs in my area) – $25 min payment. She has 3 and I have 2. we are trying to pay them off and close them. Not as easy as it sounds.
    Here is where the rubber meets the road: CHILD CARE: $186 a wk = $744 for 4 wks
    food (we have a baby so its moe than those who do not) – $400 a month
    internet – $41
    gas : $50/wk min: $200+/month
    Amazon credit – min of $25/mth ( yes I told my fiance not to open tha account, lol, it has been closed but not paid off)
    Clothing store credit – $25 min/month ( again she thought we were rich or something, account is cloed but not paid off)

    So we make about 3300 and spend about 2989. I know i know, but we have savings and blah blah. When you have a child it is not cheap. We now have to buy a new car seat, another $139 for this motnhs budgets. Also the breaks are starting to squeak on the car. THe tires are bald.

    The “extra” money finds open hands demanding it faster than we can even think about putting it in our bank.

    We do not have cable, we do not eat out, ever blue moon we rent a $1 movie, we do not travel. We just live the best we can. We consider ourselves VERY fortunate that we can atleast provide for our son. Slow over time we will finally get those credit accounts paid, and we might be able to start saving a bite. We are starting to focus all out “extra” money on picking one account and paying it off. The cards are already cut in half.

    The real highlight is that I qualify for governement aid to college and my community college tution and books are fully paid. So I work full-time and go to school full time and try to take advantage of any time I get with my son to have a presence in his life. We do not live in the best neighborhood, we do not drve a flashy car, ’07 toyota corolla, and we do not flash money at movies and parks and malls, but we get by ok.

    We just cannot save. Even when the credit cards are paid off we worry that our plans to save will be over come by the rising cost of providing for our son. Time will tell.

    Anyways, i I wish all thoise struggling the best of luck.

    AND YES YES YES YES YES RAISE THE MINIMUM WAGE TO $11+/HR. My grandfather once said, “everyone wants to be the Chief and noone wants to just be an indian anymore.” I will never forget his face when I replied, “That’s because the chiefs no longer share enough of the food and resources for the indians to sustain themselves. Everyone has to become a chief to survive, so you get what we have, a tribe of self appointed Cheifs.”

  • HCabusora

    What working poor families tell us is that living without any margin of error is exhausting.  Imagine how tiring it is to know that every month, everything has to break your way–even the smallest unexpected expense may sink the household budget. 

  • Carmen A0034

    Why did the host keep saying they did not qualify for governemnt assisatnce?  Clearly they do, Sec 8 housing and food stamps. 

  • http://twitter.com/rustylongwood Rusty Longwood

    So they’re paying more for their car than housing and food COMBINED? That’s $8808 every year! I just bought a Lexus for around half that- cash! If they sold the car and took public transport for a few months they could just buy a used car with HALF that much money and not need any fancy insurance. $3360/year for cable and internet? How about ditching the cable and going with just internet for $500. Those two small sacrifices could save them $10,000 a year and let them knock out their loans! They could also get enough money together to be able to open a bank account and ditch those check fees. Without doing anything else differently, they’d be holding on to at least $18,000 a year! They could easily retire in 15-20 years even without an improvement in income.

    Sure, it’s a bit tough getting by on $38k a year, but when having fancy cell phones, cable TV, a car, a cat, and expensively financed gizmos puts you “on the financial edge”, that’s not poverty, that’s bad decisions!

  • http://twitter.com/rustylongwood Rusty Longwood

    I shouldn’t have to pay more in taxes so that this family in an already subsidized home can have a car more expensive than I drive, watch cable TV when I don’t even have a TV and spend $180 a month on an overpriced gym and shoes. People should be expected to provide for themselves unless they’re too ill, disabled or old to work or suffer extreme misfortune. They shouldn’t get handouts to pay for luxuries and they shouldn’t get more from me just because my decision to forego the luxuries which put them in such a bad place put me in such a better one. Their financial misfortune is entirely a product of foreseeable poor decisions, and one that could be corrected in a very short-time frame with minimal lifestyle changes. I owe them nothing.