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October 07, 2006

Going Broke on $100,000 A Year? Yes, It's Possible

I have to admit when I first read this review of Green with Envy, I was kinda looking forward to reading about this couple's financial pain. See, WASPy Republican Southerners, (i.e. GWB types) irritate me greatly. Other sorts do too, but these folks have such a huge chasm between what they profess to believe in and how they live their lives. But this example even made me feel badly for them.

“But no matter how much larger they lived," says the excerpt at MSN Money, "they could never catch up with their friends' more exciting lives. Other people always had more impressive cars, parties that were catered, expensive furniture made of rare woods they had never even heard of. Tammy started feeling anxious about their life. Was she dressing well enough? Shouldn't they move into a larger house? Why wasn't Dan more ambitious?

Dan started getting larger bonuses, but the amounts were unpredictable. Tammy, who had handled the finances since their wedding day, started making only minimum credit card payments, and the balances grew larger. Instead of reining in expenses when money was tight, she simply went to an ATM and transferred $1,000 from the home-equity credit line to the checking account. At the same time, the couple started projects like installing granite counters and hardwood floors, all designed to put their house on a par with everyone else's. My husband has a good job, Tammy told herself. We can afford it.

Then, one month, Tammy asked Dan to cash in some stock options to pay for basic monthly expenses. A few months later, she had to ask again. That's when Dan realized something was wrong. He knew that it had been a while since his regular paycheck had covered all their bills. But since Tammy handled the money, he didn't know the details. We should slow down, he told his wife. We can afford it, she insisted. You're about to get your bonus.

True, the annual bonus was coming. And it was huge. By far the largest bonus Dan had ever gotten, it totaled nearly $100,000-much more than his annual salary. With this windfall, they could pay off everything and start over with a clean slate.

But to quell his anxiety, Dan wanted to review the details. For the first time, he asked his wife to hand over their account statements. One night, he took them into the home office, along with their credit reports, which he'd obtained on the Internet. Going down the list, he noted the current balance for each card. Then he broke out the calculator. As a store manager, he was used to tallying up figures, but when he hit the Total key, he assumed he must have made an error.

Once again, he started down the list: American Express, MasterCard, Visa, another Visa, another MasterCard, Discover, Gap, Dillard's, Ann Taylor. Again he hit the Total key-and stared in disbelief. The first figure had been correct. He felt sick. Overwhelmed. Deceived-not just by his wife, but by himself. Now he knew the truth, and it was almost like discovering that his spouse was having an affair. She had never told him how far behind they were falling, and he had just looked the other way. On credit cards alone, the couple owed nearly $100,000.”

Yikes!

Now, I must admit to thinking that hypocrisy isn't as much of a sin as most people say it is. What hypocrisy really means is that one isn't able to do the "right thing", that is to say, to resist temptation or impulsiveness even when their moral compass tells that they're going in the wrong direction. People are just weak sometimes. Is a smoker who is ill from smoking being hypocritical when they advise you not to smoke? Surely they are, but it doesn't mean they aren't sincere though, does it?

What it does tell me is that for some people moral bankruptcy proceeds the financial kind. And so it goes...

Posted by Ali Massoud at October 7, 2006 04:06 PM

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Comments

Any man who allows a woman to control his money deserves to suffer. What a p-whipped sap.
Heck, she probably murdered a couple of his babies in her womb that she didn't tell him about, as well. She payed CASH for those transactions, I'm sure.

Posted by: Roger Young [TypeKey Profile Page] at October 8, 2006 10:43 AM

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