The Federal Reserve Board conducts a survey every year to “monitor the financial and economic status of American consumers.” One of the questions asked on this year’s survey was “how would you pay for a $400 emergency?” 47% of survey takers responded that the only way they could cover the expense would be to (1) borrow the money, or (2) sell something. It’s shocking to realize that nearly half of American adults are living so close to the financial edge.
I know how frightening that edge is because I lived it. When I started working for OSU Extension 22 years ago, I was a newly single parent with two middle school-aged children. My hourly pay rate was about $1 over that year’s minimum wage. I was happy to find a full-time job with health benefits, but was still only hanging on financially by my fingertips. I comforted myself by dreaming about some point in the future when I would earn more and be able to improve my financial situation.
I have always been a frugal person, but had to tighten my “money belt” a lot harder during that time frame. Even with my background in financial resource management it was a major struggle to keep my head above water. My kids got part time jobs delivering papers, and we bought many of their school clothes at thrift stores. I drove a car with over 150,000 miles on the odometer. I hit garage sales in the summer and we ate a lot of low-cost meals. My kids qualified for reduced-cost school lunches. I worked part-time jobs as a tutor and adjunct faculty (on top of my full time job).
We all like to picture ourselves with a bright, pretty future; one that may or may not be realistic. It took me over 15 years to get to the point where I did not have to worry that I was one paycheck away from living in a cardboard box. As I look back on that time in my life, I’m extremely grateful for the following blessings:
• The Earned Income Credit, which gave me a little security for emergencies every year,
• Scholarships that paid for 100% of my daughter’s college education and 75% of my Master’s Degree,
• Kids who were not greedy, demanding, or resentful about their economic status,
• Parents who instilled a work ethic in me at an early age, which kept me confident in my ability to take care of myself, and last (but not least),
• My constant faith that a higher power was watching over me and my family.
Bottom Line
Don’t assume you will always be economically stable. Don’t saddle your future self with overwhelming debt when times are good. Keep up educationally, so that your future has a wider array of choices and options. And be mindful that one out of every two adults in America is struggling financially.
The reasons why may range from poor financial decisions, to divorce, to job loss, or to health issues. Whatever the reason, those people are your family, friends, co-workers, and neighbors. How you support them during a financial emergency can make all the difference in how they resolve their situation.
