A stray dog for Christmas

Without a safety net: JoAnne (not her real name) earns $12 per hour driving a shuttle for a major auto dealer. She also drives Uber and Lyft on the side and re-sells women’s undergarments online. That enterprise alone grossed $16,000 last year, but she has yet to file her 2015 IRS tax return. In her past are data entry and human resources jobs. JoAnne is reading a book, Let God Fight Your Battles, on the day we meet. She says she’s hit financial bottom at least four times in her life. She has zero dollars in savings.

“It’s really my own fault, because of the choices I’ve made,” she explains. They include marriages gone south, credit-card debt, and expensive vacations. “My mom bailed me out of my stupidity once, and friends did the same later. And, I had to file bankruptcy once. I also felt like I had to compete with my ex. He was a Disneyland dad. ‘Hey, kids,’” she says mimicking a man’s voice, “‘want a new TV?’ He’d buy it. Then, when they’d come home to me, they’d ask for an ice cream and I had to say, ‘No, we don’t have any money.’”

The 44-year-old single mother of three is Brooklyn-born. When times were better, she bought a house in Phoenix that she now rents to friends. She lives near Kearny Mesa with her brother, himself a single father of three. Later in the conversation, she will reveal the portent of a coming cash drought: her renter bounced a check and she is now behind on her mortgage and hoping to make a deal to clear things up with the bank. Her kids are 7, 18, and 22. Only the 7-year-old lives with her at present. The 18-year-old stays with his father in New York (to whom she pays child support) and the 22-year-old is married. “I’m a grandmother.” She smiles.

The Federal Reserve Board’s current tri-annual Survey of Consumer Finance (data collecting for the 2016 survey is in progress through the end of the year) provides a Dickensian view of middle-class American life. The data is at times startling: when asked, for example, how respondents would pay for a small emergency, nearly half of them (47 percent) said that they wouldn’t be able to put together even $400 without having to borrow from friends and family or selling off some of their stuff. Fifty seven percent of those questioned said they’d burned through all or most of their savings following the Great Recession of 2008.

Bankrate.com posted their own survey last year in which 62 percent of their respondents claimed to have less than $1000 in savings; 21 percent admitted to having no savings account whatsoever, the majority of that lonely club being members of Generation X, or, persons who are age 35 through 54. Talking about one’s financial health is another thing entirely, especially among the cash-flow-challenged.

Personal finance as a topic appears cloaked in layers of embarrassment; generally, it is not a topic of conversation even though finances are noted as being a major conflict among American couples.

“There is a loud silence in the room when we talk about our personal finances,” writes psychoanalyst Robi Ludwig in Today Money. It took months to locate San Diegans who were willing to speak candidly about their bank balances. Most of them preferred to use a pseudonym rather than their given names.

“It seems like it’s more expensive to live here in San Diego,” says JoAnne. “And what I get paid now is about what I got paid in New York working in a high school summer-youth program.” Then again, limited means have more or less been a way of life for JoAnne. “We grew up in the projects. We had nothing. I can remember my dad giving us a stray dog for a Christmas present.”

Twenty three percent interest

“Yes, I’ve got $500. $600?” Margo (not her real name) is 64. Her bright fingernail polish agrees with the flowing yellow-charcoal-and white print top she is wearing. Her hair shows gray, but her face presents little in the way of wear-and-tear. She exudes monumental calm.

The numbers: Margo says that between Social Security and her county pension, she’s good for $47K per year. She drives a new Nissan. She spends $800 a month on a one-bedroom near Federal and Euclid. She has a 19-inch television, an old computer, and an ancient stereo. Medicare will kick in later this year, after her 65th birthday. She says she spent herself into the red by putting her niece through college.

“I gave her $500 to $800 a month for three years, and I’m still recovering. No, I don’t demand that she pay that back.”

She says she would feel better with a $5000 cushion in her bank account. What will she cut out of her spending until financial equilibrium occurs? “Eating out. And then, maybe some of the personal things that I like.”

Margo retired from the county 11 years ago. “I was in the DA’s office as an investigator specialist. I started under Ed Miller. Then, Paul Pfingst came in, and then Bonnie [Dumanis]. I was there for 20 years. Prior to that, I was with the phone company for 10 years. I’ve always lived in San Diego. We lived in Frontier, which was a black section of La Jolla. This was during the 1940s and ’50s. Around Pearl Street, I think.”

How would she handle a cash emergency?

“We’ve got the predatory lenders,” is her answer.

Has she been to that trough? Yes.

“I paid 23 percent interest. It takes a plug out of your budget to pay that back. That’s what keeps people trapped. During that period, I did not have a good night’s sleep.”

Lisa Siefert: “There’s a lot of peer pressure that causes men to be embarrassed when they can’t afford something.”

Photo by Andy Boyd

She preaches minimalism

“For some reason, there’s a lot of peer pressure that causes men to be embarrassed when they can’t afford something. They tell themselves and everybody around them lies instead.” Lisa Siefert says she appreciates why men have a rougher go of talking about being broke. “That’s my generation of men, though.” She’s 41. “The younger generation? They have no trouble telling dates they want to go dutch.”

Siefert traded corporate life in Manhattan for Banker’s Hill and along the way she re-invented herself — as a writer of romance novels — after one of her best friends was killed in a train accident. When she got here, Siefert (who admits that her live-in boyfriend is also her financial cushion at present) needed some cash flow. “I started a fitness business.” Which morphed into debt-relief counseling. “I found out that most of the women who worked out with me also had money problems. How did I find that out? They’d have to discontinue workouts. They’d tell me they couldn’t afford to continue, or they’d make other excuses. So instead of talking fitness, we’d talk about money.”

Something of an aficionado on the subject of personal debt, Siefert says she learned the hard way. She first accrued, then cleared out $190,000 of student loans and credit card extravagances by selling off everything she owned, sleeping on the floor on a camping mat, taking in multiple roommates, and living on the ultra-cheap. She preaches the same minimalism to her clients.

“Why do you need ten shirts? It’s like over-eating. You do that because you’re afraid there might not be more.”

Illustration by <a href="http://markciocca.com">Mark Ciocca</a>

A quarter million in student debt

“Do I have $500? Yeah. I just got paid, so, yeah.” Robert is 33. He lives in City Heights. He works as a policy advocate for the mid-city neighborhoods of San Diego. “What you have on payday is what you got,” he says. Robert otherwise has no money saved. He lives in a one-bedroom apartment for which he pays $825 a month. He has a car but says his lifestyle is bare-bones by most middle-class standards.

“I’ve opted out of Wi-Fi and cable at the apartment to keep costs down.” He says he is paying down some credit-card debt he accrued while looking for a job after he finished law school. “I think the lower half of the middle class, we don’t have that family net to fall back on.” Eating out is his one main extravagance, and that generally is a condition of his long work hours. Robert says the big expense in his life right now, the one that keeps him from making any kind of savings, is his student loan. (He graduated from Cal Western School of Law.)

“Even though I finished in two years and had partial scholarships, the debt stands at $250,000. It’s like entering into the workplace carrying a mortgage. That’s the price I have to pay for not coming from money.” He says that his parents are in even worse financial condition than he is. Robert guesses that he will have the debt paid off in 20 years, when he is into his 50s.

“I passed the Bar, but I do not practice law. I chose social advocacy because this is the way I think I can have the biggest impact. I don’t think I will ever regret going to law school,” in spite of where it put him in terms of his debt-to-income ratio. “But barring me having a large jump in salary, I’m just gonna be on a treadmill.”

Is he embarrassed by his debt? “The answer to that is complicated. The way our society has trained us, the expectations society has for us…” he pauses for a moment, then says, “I’ve thought about that a lot.”

For example?

“Owning my student debt, meaning, feeling comfortable talking about it. It’s a big deal. You know? I’ve heard that student debt is something people consider when they decide who to date and who not to date. It’s like an albatross.”

Lynda West: “I got to drive the John Deere tractor mower. A lot of ideas came to me when I was cutting grass.”

Photo by Andy Boyd

She bet the house... and lost

Fifty and married to a retired ex-Marine, Lynda West quit her job as a judicial assistant and took out a second mortgage on their house. “I used that money to put on a family-friendly foodie festival. We pre-sold 1000 tickets. But we needed to sell another thousand tickets to make any money. Remember that day last year that we got all that rain?” She lost the entire amount she had borrowed. “We sold our house.”

The couple sold or gave away most of their furnishings, including their TV, when they moved. Now, they have filled their rental home with second-hand articles they found for free on Craigslist. “We go to a movie maybe once a month.” Otherwise, playing music in a band is their major form of entertainment.

For six months, the couple lived in a trailer on county park land and did maintenance and worked as hosts. “I got to drive the John Deere tractor mower. A lot of ideas came to me when I was cutting grass. I dictated an entire book. I also narrowed down my goals.”

One of the goals was starting what she calls a “master-minding accountability” program. She now has nine paying members in her group, which meets in her house in Chula Vista. West’s husband Scott, a part-time band leader, also has a couple of students who take guitar lessons from him. Otherwise, life for the couple is lean.

“We have some savings from the sale of the house.” And, yes, she can put $500 together. But that money is shrinking fast, she says, because it is what the couple is living on. She doesn’t appear to be worried, even though she comes alone to talk about the couple’s finances. “It freaks my husband out too much.”

Dave Wessels: “We want to look good and smell good, but some of us are jacked up financially.”

Photo by Andy Boyd

Jacked up

“Pride. Because you’re worried about what I think of you. Because you’re worried all about that.” Dave Wessels counts the reasons why most people don’t want to talk about it. “And Christians are just like anybody else in our culture. We want to look good and smell good, but some of us are jacked up financially. Our culture is driven by status. I know this, because I’ve been sitting across the table from Christians in financial trouble for over ten years.”

Wessels counsels debtors through a ten-week program called Rock Financial Life. An IT manager–turned–medical device salesman, Wessels, 59, says he’s now in his 12th year of teaching the course via the Rock Church in San Diego.

“I’ve taught it 60 times by now,” he says. He thinks he’s counseled close to 8000 people. “The Bible has more to say about money than you can imagine. And whether or not you believe, biblical principles work.”

He crumples a napkin, holds it at arm’s length, and lets it go. It bounces off the pavement. “It’s like gravity. It works whether you understand it or not, right? You either learn or you continue to fumble.”

We cut expenses by $700 an month

Charles (not his real name) arrives in a gleaming jet-black Honda CR-V. Fifty-nine, trim, tanned, with his gray hair trimmed crew-cut short, Charles and his wife live in Point Loma in a rented townhouse. Over iced tea, he recites the names of the breaks he surfs off Sunset Cliffs: “Luscomb’s, Subs, Needle’s, Garbage.” He’d been in the mortgage banking industry for 32 years. Then, he got laid off.

“Now, I drive Uber to make ends meet.”

He says his wife works part-time as an assistant teacher for San Diego Unified and for their church school. “I applied to the San Diego Padres and the Chargers. Any executive position,” he grins. He says the experience of being laid off opened his eyes to broadening his horizons. “Yes, it’s way different work, but if you’re broadening your horizons, why not do something fun?” I ask about his personal finances.

“We have several thousand dollars saved.” He won’t elaborate but says that after he lost his job, he and his wife signed up for a money-management class. “We learned good basic principles that helped us modify our monthly outgo. We cut expenses by $700 a month.” For example, he says the couple’s cell-phone bill and the cable television and internet bills amounted to $250 of that monthly total.

“We’re also paying off our credit cards and we’re putting some in the bank.” He won’t say how deep into credit-card debt they are but admits that the total is up there. “We’re also paying off our three kids’ college educations.” He says he is otherwise optimistic. “I’m gonna have something soon. I’ve had a couple of interviews. If I got a job that pays two thirds of what I earned before, we’d be able to survive and break even. That’s what I’m looking for.”

But, he admits, “We are about a year away from having issues.”