Money Matters

Earlier this month, an article came out in The Atlantic called “The Secret Shame of Middle Class Americans.” The author, Neal Gabler, who is known for writing big biographies on people like Barbra Streisand and Walt Disney, decided for the first time to write about himself and about his secret, shameful struggle with money.  The article practically went viral because so many Americans could relate to working hard and yet still feel trapped by money.  In the article, Mr. Gabler cites a study showing that 47% of Americans who were interviewed confessed to not being able to come up with $400 quickly in an emergency.  He was shocked by that until he realized that he was, in fact, one of those people.

Mr. Gabler goes on to describe how in spite of his making a name for himself as a writer and a television personality, he made a series of bad financial decisions, such as cashing out his meager 401K  to pay for his daughter’s wedding, that have now left him and his wife broke, so broke that they had to borrow money from his adult children recently for heating oil. So many people responded to the article that The Atlantic set up a space for people to write their stories of financial devastation, in addition to the usual online space for comments.  Hundreds and hundreds of people responded, with stories of being left penniless from a divorce or a death in the family, or from bad financial decisions.

I do believe on a basic spiritual level that “there but for the grace of God go I.”  Many people are bankrupted by having an illness in the family, even with health insurance, which most civilized countries would never imagine letting their citizens endure.  For those people, we need a bigger safety net.  But what about the many Americans who don’t make a lot of money, but deserve an iPod or $30,000 car because they work hard?  We no longer think we need to have the cash to buy a car.  Many Americans finance cars for years and years; 7 years of financing is becoming more common.  We don’t want to say no to ourselves or to our kids.  I just heard of a family, for instance, whose son decided that college wasn’t for him, so the parents gave the 19 year-old son $200,000 that they had saved for college to do what he wanted.  He decided to go into day trading and lost the money practically overnight.

In Neal Gabler’s case, his wife made more money and had a more stable job, but decided to quit and stay home with their kids, even though they couldn’t afford it.  Both daughters went to private schools they couldn’t afford.  The parents gave the daughters what they wanted so that the girls could keep up with their friends in terms of status.  I have to say that I applaud Mr. Gabler’s candor, because it took a lot of courage to be so honest, and he obviously echoes what a lot of people are experiencing.  It’s easy to back yourself into a corner with easy credit and lots of societal pressure to keep up appearances.

And yet, to claim your world stage, it’s so important to be honest about what is going on in your financial life, to know what your net worth is (what you own minus what you owe), to identify any debt you have, and to come up with a written budget so that you can plan to pay off debt and save. One of the best financial advisors I know of is Dave Ramsey.  He has a free budgeting site called Every Dollar which is enormously helpful and very user- friendly.  Remember the antidote to shame (from finances or anything, for that matter) is recognizing the problem and then making a change.  Now is the time to deal with your money matters and to remember that money really does matter.