The Suburban Poor

When I thought about writing this post, it made me think about myself, about my compassion for other people. It's not that I don't think people need a little help once in a while, and I don't think we can anticipate every possible problem in our lives, but I've said it before and I'll say it again, you have to take responsibility for your own situation.

Newsweek has an aticle about the fact that the majority of the poor live in the suburbs not cities. The people they profile thought they were living the American dream but something went very wrong.

The first person profiled was making $14 an hour as a forklift operator at a steel mill. The mill closed three years ago and he lost his job. Three years? Noting the lack of services and infrstructure in the suburbs, the article points out that finding a new job can be difficult. No longer able to afford a car or insurance Brian Lavelle turned down a new job because it would be a three hour commute by bus.

Thinking about this from a personal finance point of view I have several questions that weren't addressed in the article. Did Mr. Lavelle have an emergency fund? Of course the standard recommendation of 3 to 6 months seems insignificant compared to the three years he's been out of work. Did he have a plan in place? In spite of having an income many many times that of Mr. Lavelle, I know exactly what I would cut and when if my situation changed? How quickly, if at all, did he make any changes? Many people will think the situation is temporary and will wait it out but I'd rather take the steps right away and be in a better situation if it turns out to be only temporary. As a matter of fact I've already written about my experience with this.

My other hunch regarding Mr. Lavelle is that maybe he wasn't quite ready to live the dream. Was he living on the edge? Although the Newsweek article says he was saving for retirement, it doesn't specify how? Was he relying on a pension? How much of a stretch was buying the house? Did he buy more house than he could easily afford?

I don't know the answer to any of these questions nor am I implying that Mr. Lavelle was reckless, but these are questions any financial advisor would ask. These are questions you should ask yourself. How secure is your job? How prepared are you for the unexpected? Are you living up to, right up to, your means or do you have a cushion? Do you have a plan, not an emergency fund but a plan, in case of emergency? (Check back for an article on that subject soon).

Lastly why would an unemployed person turn down a job? I know a three hour commute would be tough but if the job is good enough then maybe dealing with that commute for a short time before relocating is the best idea. The article is mute on whether Mr. Lavelle has worked at all, if he's taken any odd jobs or even a low wage job just to make ends meet. I hope he has.

Some things are beyond your control but you can do a lot with what is in your control. And for those of us who are, for now, doing well, there is a lot we can do to help those less fortunate then ourselves.

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