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Squeaking by on $300,000: Recession Fallout in Six Figures

houses-underwater

Imagine reading your Sunday newspaper, in my case, the Washington Post where the requisite financial stories abound discussing the recession and families scaling back etc and then screeching at this headline:

 

Squeaking by on $300,000:  Recession Fallout in Six Figures

 

Now, like many of you, the sarcasm dripped as I read through the article thinking to myself, how crazy this woman is for even stating that she was squeaking by on 300k.  

Here were the responses on Twitter:


JenBreedloveok seriously, squeaking by on 300K? give me a fracking break. stop complaining you still have your kids, your health and your job. get real.

 

broudyCue violins: “Squeaking by on $300K/year” http://bit.ly/ycxra (expand) This is nauseating on so many levels (via @peterdaou) Grrrrrr.

 

@Gingerlatte I can’t feel sorry for someone who lives so far beyond her means

 

@Gingerlatte That article was crazy…..She should downgrade their lifestyle… bigtime!

Let’s get to it, she either needs to scale back to keep her mouth shut, she sounds crazy.  I need not tell you that people are losing their homes, living in shelters and taking menial jobs in order to put food on the table and in some cases, that means the Dollar Menu from McDonald’s or the local dollar store.  But she has time to form her lips and state that she is struggling on 300k?

I’m sure you’re eager to know the stats but it’s important to know that she does not earn 300k, her salary is actually $150k plus a bonus and she also receives $75k in child support from her ex husband.  But this year her salary/bonus will be reduced by 10%.  Furthermore, as the article states, this began with her divorce, not the economy:  “Life in this $2.5 million house was built on the premise of two incomes, not the income of a divorced mother of three in a tanked economy.”

Her expenses?

“Her property taxes are $35,000 a year, the nanny is $40,000 and the gardener is $500 a month.  When she bought out her husband’s share of the house after their 2006 divorce, she assumed the costs of keeping it afloat — $8,000 to $10,000 a month. There’s a pool man, a gardener and someone to plow the snow from the quarter-mile-long driveway.”

 

The rationale for staying put?
“As tight as money is, she has decided that living in a 4,000-square-foot house on three acres is the practical thing to do.
“A), I couldn’t sell the house right now,” she says, citing the slow real estate market.

“B), this is where my kids go to school.
And C), it’s where my job is.”

Pick your jaws up off the floor and stay with me, this gets better.  Apparently the rich don’t talk much about this type of thing, you know it’s in bad taste to discuss money around these parts.  Meanwhile Ms Stein has a sewer problem that apparently stinks throughout the basement that she would rather ignore and keep her children in the same house, deny herself highlights and get her daughter…….wait for it—>a generic cellphone.  How about we reduce some expenses, do your own hair color and the daughter goes without a cellphone altogether?

I’d like to remind Ms Stein that while everyone is feeling the pinch, she has a concrete solution.  Sacrifice and spend less.  That’s it!  I understand that she can’t very well sell the house and come out on top in this economy, so I feel her on that one.  But the nanny?  Gardener? After school activities?  Cell phone?  Would all have to go!

I am in no way advocating taking away her children’s childhood’s by yanking all social activities but if they are engaged in 3-5 after school/recreational activities then I would cut that down to 1 or 2.  The private school would also have to go.  Parents often project onto their children their own feelings during hard times which is understandable.  They have to remember that children are resilient, in fact more so than adults and taking them out of the local private school which I’m sure costs many thousands per year would just mean another life adjustment for the children.  They would survive and learn to live with it for the time being.

Then I would fire the gardener and either find out how to do the work myself or barter the work in exchange for some kind of services that she can perhaps provide herself.

The nanny would either have to go or she would take a pay cut in exchange for health insurance, after all she gets FREE room and board in a very nice house, honey she would need to feel the pinch too.  If a pay cut isn’t possible then fire the nanny and ask one of her unemployed local friends to take over at a much reduced cost.  The nanny also has the nerve to talk about her personal recession starting in 1994?  Go back to school, retool yourself and get a job like the rest of us!

Ms Stein also has to think about the fact that her job and bonus are on the line.  She is the Vice President of Mastercard and given the way the credit card companies are hurting right now, she needs to get over this sense of entitlement and reduce her expenses which are largely related to keeping up with the Jones’-ITIS.  

Finally, consider this, her lifestyle right now and the struggle to keep afloat has everything to do with her 2006 divorce and at that point she should have downsized according to her SALARY and not her bonus and child support, none of which are guaranteed.  Hell her salary isnt but as long as she is in her position at Mastercard, she gets a check right?  Ex hubby can decide not to pay child support and the bonus could very well disappear.  So it would seem to me that this is of her own doing and wanting to keep up appearances after the divorce.  

Time to step into reality with the rest of the world Ms Stein.

  • http://guiafallout.blogspot.com/ Fallout 3

    hmm, very Interesting, thanks

  • http://www.acnetreatmentdigest.com Acne Scars Treatment Info

    Economic recession created huge unemployment rates around the world. I think the world economy is already on the road to recovery.

  • Cate

    Ginger: Thanks much for checking but don't worry about reposting as it would be out of order now.
    Moonstone: I've been debating with Ginger for the most part, not you, and I have reiterated only as I felt was necessary. You seem to feel a need to shout me down and reassert that your life is fine and dandy. Since I don't know you I will take your word for it on that point. You have certainly won that argument.

  • Moonstone

    Actually, I too had a longer post which also went 'unposted' — so I decided to just tell you that I think your point (whatever it is) has been made ad nauseum and, well, enough is enough. We are all a bit tired of your so called 'debate.'!!! I can take debate quite well, darling, but you seem to have a problem with anyone who disagrees with you. We think you should not post unless you have something new to say.

    • http://intensedebate.com/people/Gingerlatte Gingerlatte

      Ill check the spam folder to see if your posts are there.

  • Cate

    Moonstone: I thought you said "Nuf' said"? I'm not on a pedestal, I'm making a point. If you can't take debate don't post.

  • Moonstone

    Cate: Please get off your pedantic pedestal and go away. You think you have all the answers. My life is great, thank you.

  • Cate

    Well since the story was meant to highlight one part of the fallout from the recession, and in that story they spent some time noting elements of the nanny's life in addition to Ms. Steins' when I say "big picture" I mean part of the entire economic picture and worth discussing alongside Steins' would-be spending cutbacks. It has nothing to do with therapy or any individual's worth. Of course the nanny is just part of Steins' budget equation, so? What I was initially complaining about still stands: a total lack of sympathy for Steins and her overprices woes should not equate to a total lack of sympathy for the Nanny and inane suggestions that she "get a job" or more schooling when she has one already. Again, I am not suggesting Steins keep or not keep the nanny.

  • Ginger

    Why would they be considered part of the big picture? That's like asking AIG to consider the secretary's family when they can barely afford to pay their larger obligations, again this is about business and not the therapist's office. At the end of the day when stories like these are written, the center of the story is sharing it for one reason or another: to shed light on their plight and/or get help for whatever it is they are going through so that it helps them or someone else.

    The nanny is just PART of the equation, not the big picture. The children are part of the big picture. If Steins had to choose between her children and nanny, the former comes first.

    If you think that is harsh then I pray you never get the axe because you'll be in the therapist's office wondering why your boss didnt love you enough to keep you onboard when that simple isnt their job. You are their to serve a purpose and once you are done/no longer feasible to keep you then it's time to move on.

  • Cate

    The other half of my post went unposted so some of my point was lost. But basically, how Ms. Steins works out her financial woes is for her to figure out, and as she does have the means to fix it I frankly don't care. What annoyed me is that in trying to "fix" her problems by saying the obvious ("Cut back your spending!") the other human beings tangential to the story were considered beside the point instead of part of the big picture. The interesting thing here is that if The WaPo then did a story on the unemployed nanny, wouldn't you all just be spinning to fix her problems here in the comments? And Moonstone, I didn't add a litany of problems to my post as you did. (And no, not unemployed OR a lawyer).

  • Ginger

    How is she when she has a sewage problem and earns a great income as you say and cant afford to fix it? But instead chooses to give her daughter a cell phone? What am I missing?

    Also, truth be told, she really cant afford the nanny if it means that her job requires those hours, she will need to scale back as she is the primary care giver in this situation. Perhaps a time-share with her ex husband in lieu of a nanny would help but with a sewer problem looming and barely being able to cover her household expenses, IMHO she isnt in good financial shape. Especially if it means pulling for your investments which are supposed to be for retirement.

    • http://momswholunch.blogspot.com Ames

      My assessment was based on

      1) Stein has 99k to 120k remaining after her fixed expenses of mortgage, property tax, nanny, gardener.

      2) the author of the article diagnosed an expensive plumbing problem based on a smell and no where does it say Stein can't afford to fix it or that the author is a plumber qualified to diagnose.

      3) I'm not sure why you conclude that the investment account was for retirement funding? I'm more familiar with such accounts for wealth management, buying horses and such and not retirement.

      I also made assumptions from the facts of the article.

      75k of her income is not taxable- child support. She gets great sch a/b deductions on her mortgage interest and property tax. She likely deducts the entire $40k for her nanny. Since she is in management she likely has a pension that is set.

  • http://momswholunch.blogspot.com ames

    The nanny would be the last person I'd let go. If Stein is V.P. she likely works V.P. hours. Jobs that pay $150k plus bonuses are not 9 to 5 positions. The nanny provides a stability and the kids need that especially after a divorce.

    If her husband earns enough to pay 75k a year in support then she has made an extreme adaption from her married days. I didn't read the article as a complaint or a woe is me. She is explaining how she is scaling back. It seems like her finances were great. She was able to buy her husband out and she has 50k in a personal account to cover overages.

    I think she is an example of being prepared and being able to weather a storm.

  • Moonstone

    Cate: "I'm sorry that your life is so difficult, but that doesn't mean that everyone needs to live it with you, does it? And I'm glad you get to adjudicate whose problems are "real" and whose aren't–at least that's settled, huh?"

    Cate, my life is not difficult, but totally fantastic. I cook, clean, feed, and weed! I think you need to get off your little pedestal and realize that opinions are opinions. And you yourself are adjudicating more than anyone – maybe you are the unemployed attorney? Glad you think that you are the only one who is right. 'Nuf said.

  • Cate

    (Continued from above) There are many people who do feel secure in their positions with good reason and end up being a "domino" affected by a company making "hard decisions." You never really know what the future holds and I agree that "pick up the pieces and move on" is good advice, but not very kind.

    To sum up since you seem to have missed my point last time: 1) I am not addressing Ms. Steins' financial position–that's for her to figure out and as she does have the means to fix it I frankly don't care; and 2) you and the other posters who would summarily execute the nanny and the gardener should try standing in someone else's shoes.

  • Cate

    As I said in the post above "not suggesting that Ms. Steins' best option financially would be to keep her nanny or her gardener. I'm only pointing out … callous references to their being fired."

    If you don't care about her employees, that's your right, but at the moment they get a paycheck from this woman who is living beyond her means, and tossing off the opinion that they should simply be let go is callous. It wasn't clear to me that anyone had given that any thought, despite lip service to those out of work. From the original post:

    "I need not tell you that people are losing their homes, living in shelters and taking menial jobs in order to put food on the table… "

    I recognize that "we all have hard decisions to make" but we are not making them here, or for Ms. Steins personally, so I felt that the swipe at the nanny in the original post to "get a job like the rest of us!" was unnecessary and inaccurate, as in fact, she does have a job at the moment.

    • Ginger

      Business is business. I have a housekeeper/maid and someone that cuts my lawn but they cost no where near, not even close to what this woman pays for those services. However, if circumstances warranted, I would cut their services, sure with a second or third thought but if it had to be done then it must be done.

      I am not burdened by the impact simply because at the end of the day I have to make sure that my family stays afloat in this economy and worrying about the impact my decision has an another adult who voluntarily signed up for the job is not my concern. Again, I would miss the service and the people because I like them but at the end of the day business is business.

      You seem to be connected to the callousness of our recommendation, but again, when it involves money and the difference between paying close to $50k a year for a service that I cannot afford, please believe said workers would need to find alternate means of employment while I save a dollar or $50,000.

  • Cate

    Gingerlatte, right, and that's what I was doing–responding to an opinion, and expressing an opinion. Who is it that you think believes they are entitled to a job? It wasn't clear whose comments you were referring to.

    Also, I'm not suggesting that Ms. Steins' best option financially would be to keep her nanny or her gardener. I'm only pointing out that there are a whole lot of callous references to their being fired. The comments in the blog post and the comments so far indicate interest in the people that are already out of work but why wouldn't you be equally sympathetic to someone who still has a job and needs to keep it?

    Lastly, as I said earlier, school isn't the perfect answer to unemployment, it is only one. And people aren't always capable of seeing into the future as you are. Perhaps you could lend them your crystal ball?

    • Ginger

      Gladly. I foresee that if people stop depending on one stream of income them they will not have to worry when one dries up, they happily move on to the next best thing. Survival of the fittest.

  • Cate

    Moonstone: "Advice: Fire the "nanny," gardner et al, sell the house when you can, and get a real life way the hell out of Rye."
    Moonstone, how would you feel about firing the nanny if YOU were the nanny. I am not defending Ms. Steins' way of life, but I would like to point out that without people in that income bracket there would be gardneners, nannies and cooks out of work and possibly looking to re-career (as there already are on that bulletin board mentioned a few times in the article).
    I'm sorry that your life is so difficult, but that doesn't mean that everyone needs to live it with you, does it? And I'm glad you get to adjudicate whose problems are "real" and whose aren't–at least that's settled, huh?

  • Moonstone

    More from me, Ms. Stein. I'm a single mom with one 3 yr old and a decent income. But there is no father in the picture anymore and I do it all myself. I have no family within 1000 miles. My parents are in foreclosure, one brother has lost his job, and another brother's one year old daughter has cancer. That's REAL, Ms. Steins. She needs to get real. She is a disgrace to herself and your family and is not doing them any favors. Advice: Fire the "nanny," gardner et al, sell the house when you can, and get a real life way the hell out of Rye. Your ex hubby is movin' on with a new babe, and won't be sending 75k (?!!) for long. They will probably have their own kids which will knock your child support back into this atmosphere, God willing. The one thing I am sad for is your divorce. No one wants to have to go through that, but your are obviously smart enought to hang on to the crumbs of your aristocratic. life. Why not drop the crumbs and have a normal life, which, by the way, is a lot more fun?

  • Cate

    "The nanny also has the nerve to talk about her personal recession starting in 1994? Go back to school, retool yourself and get a job like the rest of us!"
    Um, not to defend the article, but the nanny does have a job. She figured out she could be a nanny and make plenty of money. I think the "personal recession" thing was just a way of talking about how she was laid off and the author was just making the language interesting. And by the way, school isn't the answer to everything. There are plenty of out-of-work lawyers right now, for instance.

  • Raj

    I think that I smell a reality TV show coming.

  • http://www.5andapossible.blogspot.com Rum Punch

    Thank you for this! I read this article whilst enjoying a recession Sunday dinner at my aunties' house and we all had a good laugh about it. We all agreed with you – expenses needed to be cut. And the nanny should be the first to go. But don't cry for me Argentina is how I felt about the whole sit'chation…

  • Guest

    Her last name is Steins.

  • http://www.dogatemyfinances.com dogatemyfinances

    I was cracking up reading this article. It almost sounds fake. Almost.

    It's the Mastercard way! You deserve it!

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