This was maybe a little extreme, but something like it strikes me as the only logical reaction to a job loss in the middle of a recession. There's no telling how quickly you'll be able to find a job, so you want to err on the conservative side. I'm totally mystified by people like this:
After working for more than a decade in New York ad shops, Chuck Hipsher moved to Detroit in 2005. He took a position at the Campbell-Ewald agency, where he helped launch the Chevrolet Silverado campaign. Raised riding in the back of his grandfather's Chevy pickup in Iowa, Mr. Hipsher, 50, says he was "elated" at the opportunity.
He met his wife at the ad agency, and the two had a $40,000 wedding. Kelly Hipsher, 32, was laid off in October 2007 and found out she was pregnant in February 2008. A week later, Mr. Hipsher's pink slip followed. Two months after that, the out-of-work couple moved to Greenville, S.C., to be closer to family and get a fresh start. Together, they had received about $60,000 in severance. "Now we have $600 to our name," says Mr. Hipsher.
Although their rent was cheaper, Mr. Hipsher says the family continued to spend like before. They moved with three cars -- two BMWs and a Chevy Silverado. They continued to buy cases of $36-a-bottle wine. They spent $250 a month on a cleaning lady, and Mr. Hipsher dropped $50 a week on flowers for his wife. The couple still dined out regularly.
"We were stupid," he says. "You become accustomed to a certain lifestyle. When your world changes and things dictate that you change, you're pretty stubborn to give things up."
He sold the BMWs and voluntarily turned in his beloved Silverado to avoid the repo man. "It was heartbreaking," he says. He replaced the fancy wheels with a Chrysler minivan.
Before the layoffs, the Hipshers had no debt. Today, they owe about $70,000 -- including money borrowed from family members and $31,000 in credit-card debt. To hold off the collection companies that call daily, Mr. Hipsher says he is doing his best but is also considering filing for personal bankruptcy.
After a stint selling new and used BMWs on a lot in Greenville, Mr. Hipsher recently began consulting for free for a small marketing firm, "to stay busy."
In September, a Web solutions company hired him as a marketing director. Between salary and commission, he thought he could match half his old income. But so far, he says he's only received about $1,220. Tight for cash recently, he pawned his wife's $12,000 wedding ring for a $2,000 loan. He has until Dec. 28 to pay back the principal, plus $500 in interest -- or else he forfeits the ring.
Looking back, he kicks himself for failing to enforce financial discipline right after losing his job in Detroit. "That precious nest egg is gone," he says.
I get a panic attack just reading it. What psychological quirk makes you maintain three expensive cars, flowers, and fine wine when you're both out of work?
The same one that makes you feel like an outcast pauper because you can't afford new clothes for an entire year?!?!?!!?
More like 5. I suggest you go without any new clothes at all for five years, and report back on how stylish you feel.
Style-wise, I dress more or less the same as I did in high school. Granted, my clothes from that era are worn out, but the style remains.
Presumably, however, you replace them when they wear out.
Why would you need to wear clothes if you're not working?
Presumably, however, you replace them when they wear out.
The only clothing I have ever bought myself has been running shoes and hunting gear. The rest of my clothes just disappear when worn out or frayed and replacements appear.
I'm with Megan on this one. Not being able to replace clothes as they wear out does make you look rather bedraggled, which isn't good for job interviews. Apparently Megan and I lack the guardian-angel/enchanted-luggage/helicoptor-mother or whatever/whomever who magically disappears Rob Lyman's old clothes and makes the replacements appear.
Tracy: It does not surprise me that you lack a wife.
Rob, my lack of a wife does not surprise me either, for the complex reasons that I am a hetrosexual woman, I already have a husband whom I rather like and intend to keep and polygamy is illegal in my country.
Megan, you're hilarious. I wear worn out clothing all of the time. It doesn't make me feel anything. Most of my clothing is more than 5 years old. The idea that it mattered so much to you you felt a need to use it as an example of how devastating being gainfully employed for less than fabulous you were worth just shows that you were about keeping up appearances to a point to make you at least slightly neurotic. That's what these people did. It's just as irrational to spend away all your money as it is to be woefully insecure cause your jewelry don't jangle with all its new fangle.
See, I was pointing out that if you tried at all, you could perhaps clear up some of the "mystified" feeling about these two by relating their extreme need to fit in through conspicuous consumption with your slightly less extreme version of the same. It's called materialism and, trust me, you suffer from it in spades as well.
Some of us think that wearing clothing with drafts kinda defeats the whole purpose of clothing.
Or leaks, when dealing with shoes.
That would be a failure of pragmatism, not style. Kudos for arguing against points no one is making!
Nutella, you're not a woman. Women's clothing changes style much more rapidly than men's clothing, and is less durable, presumably because it changes style much more rapidly than men's clothing. I too have much clothing that is more than five years old, and I wear those things frequently. The difference is, five-year old clothing is not my newest piece of attire, and I am not limited to wearing only the things I happened to own five years ago, whether or not they are in good repair, in style, still my size, etc. You're suffering from a combination of gender bias and survivor bias. That is, it wasn't like you putting on that old favorite pair of jeans and the corduroy jacket you bought in college. It was like you putting on those acid washed high-waisters you bought in 1987, along with an oversized t-shirt that had a spaghetti sauce stain on it, and a plaid overshirt with a rip down one sleeve.
Again, I second Megan on this. Once in my home town we didn't have a summer, so I had to keep wearing my professional winter clothes to work as the shops had only stocked light summer stuff in a reasonable expectation of decent weather. By the end of that several of my tops had holes wearing through them - I can sew enough to replace buttons and fix a ripped seam but when the fabric itself is falling apart there's not much I can do.
Yes, Megan, I am not a woman. I do know woman who buy things at thrift stores, wear old things, or what have you. Keeping up appearances, while desirable, isn't NECESSARY and yet you write about it like it is.
The hilarious thing here is, of course, that I'm not criticizing your desire for new clothing. I'm merely pointing out the connection between your behavior and someone you find bewildering. Of course, I have mentioned before that empathy is not your strong suit. Apparently, neither is recognizing someone speaking about empathy. There really is a dark hole there, isn't there?
Meh. The losses that makes the pain of being broke are different for everyone, but people all feel them acutely and it seem that feeling so because you can't buy one of the basic items of "food, shelter, clothes" hardly seems odd to me.
Let see. Middle aged. In advertising. Moving to Detroit to work for a GM shop. What could go wrong?
What psychological quirk makes you maintain three expensive cars, flowers, and fine wine when you're both out of work?
If you felt you could get a new job easily you wouldn't feel the need to cut back. If you noticed the second gentlemen in the article had turned down two CFO jobs and one CEO jobs because they weren't exactly what he was looking for. If you're turning down three "C" level jobs in the worst recession since the Great Depression then you can understand how one could feel they didn't need to worry.
Agreed - there's going to be some people with a rational expectation of quickly finding a new job, who will not cut many expenses quickly. But when you were successful at advertising in New York, somewhat less so after moving to Detroit, and you've now moved to Greenville, SC?
I strongly sympathize with the instinct to cut your expenses by moving out of the big cities, but what made him think that there's going to be tons of advertising jobs in Greenville, SC? Especially during a recession, and during the gradual downward march of print and TV advertising?
Voluntarily moving to Detroit doesn't suggest good judgment.
That was my first thought on reading the first line.
Detroit has been destroyed by the Democrats. Here's some photos of it:
http://images.google.com/images?hl=en&source=hp&q=feral%20detroit&um=1&ie=UTF-8&sa=N&tab=wi
City Magazine did a write-up on "Feral Detroit" documenting how nature is taking over the once-shining city.
http://www.city-journal.org/2009/19_4_snd-feral-detroit.html
That was my first thought on reading the first line.
In light of this, I'd like to retract my statement.
after looking at the photos, compare other cities.
I was able to find one other city that had one feral house on the first page.
"We were stupid," he says
That pretty much sums it up.
Megan,
Imagine this. You get laid off from the Atlantic, as James Bennet once got drunk at a conference and tried to grab your boob they give you 9 months of severnce if you agree to sign a release of claims.
With that you can college $2000 a month in UI and 9 months of severance. You will be able to college that $2000 a month for a total of 99 weeks. If Peter was still working could you imagine maybe taking a trip somewhere warm or maybe buying some new outfits, some new kitchen gadgets?
Not me. Into the bank to sit there.
"I get a panic attack just reading it. What psychological quirk makes you maintain three expensive cars, flowers, and fine wine when you're both out of work?"
Answer: Lack of short term consequences for actions.
They're outliers. They're nuts. Don't dwell on this story;
Only .001% of the population has this much functional dissonance: smart enough to be professionals, but dumb in every other way.
This is what happens to Hipsher douches.
underrated
Tony,
Oh, it's a lot higher than .001%. The unemployment rate for college graduates is only 3.9% the reason you don't hear more about situations like this is 96.1% still have jobs. Of those 3.9%, plenty of them have screwed up pretty bad.
One suspects that a contributing factor was that Mr. Hipsher's wife is eighteen years younger than he is. Mr. Hipsher may not have wanted to see how attractive he was to his wife without the cleaning lady, the $36-a-bottle wine, the $50/week in flowers, the BMWs, etc. etc. etc.
Especially since he's bald and fat.
Good catch. But then again, she's 32, newly unemployed in a bad economy, and preggers. She might learn to adapt to more modest means and perceptions of reality rather fast, given the available options.
It sounds like they were both simply and completely blinkered as to what their new financial status really looked like, especially if he was turning down other good job opportunities merely because they weren't the exact thing he had been doing before.
One useful thing about spending a career in Silicon Valley startups is you get used to regarding each paycheck as if it's your last. So, if you choose this world, you keep a big savings account and have low regular expenses.
Our "spend items" are for cool vacations and other events. You can pass up Hawaii, Thailand, or Europe one year, but you can't easily get rid of a fancy "prestige" car and its overhead.
As for this guy: Detroit? WTF?
He's in advertising. There are probably quite a few advertising jobs in Detroit, for some reason.
OK - maybe so.
But if he was involved with the recent GM "Our Buick/Chevy is 0.01% better than the Lexus XYZ123 or Camry/Honda!" campaign, he deserves to be broke. A lesson I learned painfully is "we're like them, only better!" never works, but you'd think an adman would know better.
He moved FROM New York TO Detroit.
That means he couldn't cut it in New York and he decided in 2005 to move to a dead and dying city, its life snuffed out by unions and Democrats.
Fat, bald and stupid is no way to go through life, son.
That means he couldn't cut it in New York and he decided in 2005 to move to a dead and dying city, its life snuffed out by unions and Democrats.
Nice try, pal. Rick Wagonner and the rest of management takes as much, if not more, blame for GM's down fall. I love how everything is the fault of Democrats and unions. It sounds like you are one that never takes personal responsibility for anything. Always blaming others.
I assume by Detroit he meant the Detroit metro area which (at least until the current unpeasantness) was still quite vibrant and not at al a wasteland.
As for Detroit, it was not ruined by amorphous "Democrats": its ruin was largely the work on one man, Coleman "Mayor for Life" Young, who did his best in the late 70s and into the 90s to turn Detroit into a ghost town. Nothing partisan about it (especially since the state GOP kissed His Dishonor's rear as slavishly as the state Democrats). Young had that special flair normally only found in Third World kleptocrats of combining stupidity, incompetence and venality into one killer package, complete with the anti-Midas touch of turning everything he tocuhed into dung.(Note: former Michgander here, who watched Detroit rot from the outside as I was growing up)
Snuffed out by unions and Democrats?
I won't even go there. I'll just point out that when your job is to sell GM vehicles, and two of the three cars you own are made by a German manufacturer, you might want to pause for a moment and reflect on your career prospects.
"Rick Wagonner and the rest of management takes as much, if not more, blame for GM's down fall. I love how everything is the fault of Democrats and unions."
Are you suggesting that Wagonner is not a Democrat? How would you explain all the donations he and GM have made to Democrat candidates?
OpenSecrets.Org: "... the Obama administration forced the resignation of CEO Rick Wagoner, who has given $5,500 to federal candidates since 1997. President Obama received more money for his presidential race ($57,000) from the company's employees in the 2008 election cycle than any other member of Congress."
Detroit (the city) was destroyed by Democrats and unions and Democrat Rick Wagoner - who gave generously to elect his friend and fellow traveler Barack Obama. And now they want to destroy the rest of the country in a similar manner.
We should stop them by firing their asses.
Why panic, Megan? Surely, neither you nor your fiance are that stupid, and stupidity is the the psychological quirk we are discussing in this case.
The key to surviving these types of events is living cheap, cheap, cheap before you have to. Believe me, I know of that which I write.
To second what Foobarista said. The key isn't so much to live cheap as it is to keep your monthly nut as small as possible. If you want to budget money for fun that's fine - just don't have all your income tied up in high fixed expenses.
I recall one of my friends arguing back in 06 that you should buy the biggest nicest house you could possibly afford. You should do this because then you wouldn't need to go out for dinner or on vaction. My thought was it's easy to cut back on the dinning out or the vacations, not so easy to cut back on your mortgage, property taxes, etc.
You should do this [buy a big house] because then you wouldn't need to go out for dinner or on vacation.
That was an actual argument used by real estate agents in ad copy in the San Francisco Bay Area during the housing bubble.
The irony is big (>3K square feet) houses simply don't exist in the SF Bay Area, unless you live way, way out in the stix, or have a net worth in the mid 7 digits.
And that's after the tank.
But I'll keep my 1200 square foot place three miles from work, and happily go to Rome and Barcelona next year as I haven't noticed any Colosseums in my back yard recently.
Never, ever, max-out your housing dollar. Always buy less than you can afford. The cushion helps when there are increases in utilities, unexpected expenses, etc. If you don't have any of these, then the extra money should be used to pay down your mortgage more quickly.
I'm going to have a $215k house paid off in a little over 5 years, because we lived comfortably but frugally, and were putting 2/3 of my paycheck toward paying it off.
I'm not living in it now, but that makes the rent become extra income to pay down the $82k house I'm living in now (completely different housing markets).
If you could chose one of two roads, and you find out after that the road not taken had a horrific accident that would have involved you -- do you feel nothing at the thought you could have gone that way?
You should do this because then you wouldn't need to go out for dinner or on vaction.
Right, because the principal reason I eat out or go on vacation is because our house is too small.
Rob,
Didn't you say that if you had the money you'd have 200+ acres all to yourself?
Yes. More if I could afford it. But that's because I like hunting and hate people, not because I expect that a large property would miraculously cook and clean up for me.
There are some good hunting/ranching parcels in Eastern Montana where you can get land for $300/acre.
The bonus is it is hilly country with all sorts of cool sandstone formations.
When I was going through a rough patch with my wife a few years back, I consoled myself with the idea that if she left, I'd by 1k acres and learn how to ride and hunt like a pro.
Try this one on for size: 21,031 acres for about $125/acre, or $2,625,000. Beautiful scenery, wooded, what more could you ask for?
http://www.eaglestar.net/bxtn.html
I could ask for 2.6 million dollars.
@Rob,
$2.6m is a little steep, yes. $300k isn't necessarily a pittance, but it shouldn't be too difficult on a 30-year loan, especially if you have a decent down payment from selling your current house, or if you rent out your current house to help make payments on this land. You could probably have a comfortable cabin built on the land for an additional $30k. It's only about an hour from Billings.
Maybe he can get a job with a
mattress manufacturer; I hear
they are going to need a truly
amazing ad campaign to avoid
bankruptcy; Something about
LBOs coming home to roost. :)
My personal suspicion is that a good measure of the truth is captured in that fact that the guy is 50 and his wife is just 32. He's trying to rekindle his youth, living up to the aspirations of a young, hot wife. It's a bit like the NYTimes economics guy and his mortgage debacle instigated in no small part by having taken on a new wife.
I agree entirely. The lesson I keep learning from these stories is to never get married and if for some reason you do, for God's sake never do it again!
Kind of an odd lesson to be learning from the blog of a happily engaged person, perhaps.
More seriously, I think the lesson is that upper middle class men who depend on their paychecks can't afford trophy wives. Especially not as second wives. That's for people with true wealth. I think it's pretty tacky even for them, but they can certainly afford it.
There's been a lot of social class creep (creeps?) in the credit-driven boom of recent years. People with regular jobs in the low six figures have been trying to live like millionaires. Lower middle class people have tried to live like upper middle class people. And so on. This is just one more example.
Regular middle class men should have regular middle class wives, the kind who like to garden and grow their own flowers.
Setting aside the stuff about 'kinds of wives', this part is absolteu, iron-clad truth:
"There's been a lot of social class creep (creeps?) in the credit-driven boom of recent years. People with regular jobs in the low six figures have been trying to live like millionaires. Lower middle class people have tried to live like upper middle class people. And so on. This is just one more example."
This is true all across all aspects and levels of society, and its a major product of the Great Ad Campaign that goes by the name of 'popular culture'. People are buying houses they can't afford, driving cars they can't afford, holding weddings, birthday parties, and other celebrations they can't afford, with borrowed money, because they've been conditioned to believe that this is 'normal'.
It is an example of sticky wages. After all, if people weren't particular I could employ the entire country moving rocks around my yard for a fraction of a cent/hr.
They obviously have issues though. Moving to Wyoming from Silver Spring would save that one guy more than $60k/year if he intended to maintain the same standard of living. Once they hit rock bottom, they'll have to deal with reality, but nothing short of that is probably going to cut it.
"What psychological quirk makes you maintain three expensive cars, flowers, and fine wine when you're both out of work?" The same quirk that causes U.S. Congressmen to pass Cap and Trade and health care reform in a severe recession.
The rather shocking thing is that that is all, for the year, tanked.
Megan, this gave me an anxious feeling in my gut as well. I grew up with few luxuries, went through 2 bouts of unemployment in 4 years, and still have a feeling of anxiety despite living in a state that out performs the US in employment.
Did I mention that I'm a bit of a tight-wad (though I prefer the term 'frugal')?
If this recession is as bad as Biden thinks it might be, we may see a return to frugality yet.
Question:
In what form does a "frugal" man keep his money. I have two friends, both of them very frugal. One put $100k down on a 400k home, he's now 50k underwater. Another already had a home and put 100k down on a 300k rental/investment property in South Florida - he's down $50k as well.
I know people now who are buying gold at 1130/oz....
So again, you're frugal.... where do you put your money? Stocks which can crash, commodities that can implode, bonds and cash that can be inflated away? Maybe you keep it all in TIPS?
You're talking about investing money - which is different than living a frugal life.
A frugal man arranges his life around his income. A frugal man will spend 60% of his income on his day-to-day living requirements (rent or house payment, utliities and maintenance, car and gas, food, clothing and entertainment.
He saves the rest: 10% for emergencies, 10% for retirement, 10% to create a "fuck you fund" and 10% for whatever else might be required that he hasn't thought of.
That's how a frugal man lives. He doesn't depend on his investments and can withstand the down parts of the economic cycle that temporarily put his investments underwater. He doesn't care, because he never sells low. He doesn't have to.
Huh, so is it cash, real estate, CDs, TIPS, Stocks, munis, what? All in a coffee in the back yard.
Diversify. Have enough cash around so you don't have to sell stocks or real estate at the bottom of the market. The current crisis won't last forever.
Anyone who puts all his/her money in just one thing can make out like a bandit if that one thing takes off, but most years it won't. So mix it up.
As movertype said, frugality is spending less than you make. Frugal people CAN make poor investments. Doesn't negate their frugality, just makes them poor investors.
My guess is this has a lot to do with procrastination. He knew he had to get rid of the cars at some point. But maybe do it next week. And next week he'll stop buying expensive wine too; next week.
And it looks like he's still doing it. He's considering bankruptcy?! He needs to sit down tomorrow night and figure out if bankruptcy is right for him now. And if it isn't right for him now at what hard date can he no longer wait for something to turn around. And if bankruptcy is the right answer for now then begin the process the day after.
That way he can have declared bankruptcy and repaired his finances with enough time that he can figure something out for his retirement and maybe for his kid's college.
Start with the $40k wedding - that was the sign of everything else to come.
IT depends on where you are--in DC, a $50K wedding is quite middle-of-the-road. But too, at the time they both had jobs, and there was no recession. That's more foregiveable than the cases of wine after you were both laid off.
Should I ever get married it's Southwest to Vegas, and the Elvis Drive-Thru Chapel. I know a couple that did that. Another couple eloped to Florence Italy. If Mom and Dad (hers, not mine, as my Dad grew up during the Great Depression) want a fancy wedding, they can spend their retirement on it...
The DC is nuts.
Three step wedding planning guide.
1. Is my name Bill Gates?
2. Is my intended's name Bill Gates?
No? Then
3. There's no way we're blowing 40k on a wedding.
True, there's no plausible way to justify a $40,000 dollar wedding on less than six figures of annual reliable income. Even then it's pretty extreme.
But there again, this is one of the areas where the Great Ad Campaign has been especially successful, the Wedding Industry is one of the most successful enterprises in the game of selling Fantasy. The physical accoutrments they sell are just props for the Fantasy that's been implanted in the minds of countless people about what constitutes a 'romantic wedding'.
Forty grand weddings are not for people who's lives are dependnet on their paychecks.
Even in the expensive parts of the country, forty grand would cover a lot of expenses for a newly married couple. Or make a good start on a house in some parts of the country.
Sorry, Megan, but just because everyone is spending 50k doesn't make it not crazy. If your comparison set for "middle of the road" people in DC are couples with a combined income of $500,000/yr then ok (but of course you know even in DC 500k/yr is far above the real 'middle of the road' as opposed to 'people I know's middle of the road'). Or perhaps everyone in DC has wealthy parents who are footing the bill.
Putting more than 10% of your annual income towards a wedding is just insanity for anything like a middle-class couple. If you are rich, then maybe more -- sacrifice some other luxuries for a big wedding. If you're below middle class, even 10% of annual income might be a crazy choice given your other needs, like having cash for emergencies.
My own new spouse and I decided that since she'd have to quit a job and relocate, with no guarrantees on her new employement, that we'd put in just a couple of thousand beyond what parents would contribute. That meant a nice, small wedding (12k), but if it had meant just us and a couple of immediate family members with a judge in a park, and a round of cocktails at home afterwards, we'd have been fine with that. While we made that plan before the crisis hit, given what's actually happened with her job search we are SO glad to have done it that way. We'd be screwed if we'd gone big.
It is NOT worth trading a downpayment on a house for a wedding!
In GM dude's case, too, he was in Detroit, where I imagine it's a little cheaper to rent halls than DC or NYC...
Count me with the low-budget wedding crowd (a JP on a public beach followed by a table for 12 at a decent restaurant). I can understand teenagers viewing a wedding (or more properly, the reception, which is where the costs really are) as Their Big Day/Night, like prom on steroids. But grownups? It seems like the ever-lengthening list of must-haves is just a racket, like the big diamond, that none of us should have bought into.
Are you serious? What's the salary for middle-of-the-road DC?
It is insane to spend more than the median income of the wealthiest country on earth on a ceremony, unless your net worth is in seven figures.
As stated previously, it is my hope that experiences like this usher in a new age of frugality.
Right, well, let me explain. We're not spending $50K, because we're cheap. But having started off with an unrealistically low budget, here's the problem with DC: there are no beaches. There are no quiet public parks where you can stage a wedding that mightn't be rained out; you need a permit for the park, the security guards aren't shy about enforcing them, and there's a strict time limit, and noisy tourists letting their children run through your ceremony. Also, did I mention the rain? The covered spaces in the DC parks are strictly off limits.
No one in DC--at least no one I know--has a house big enough for even a small ceremony. Nor a back yard. Neither our place, nor anyone else's that I know, would accomodate even our families, much less any friends. The cost of living is very high here, and so saying "but I only spent $10K!" or 5k or whatever in Omaha or Cincinnati is not very useful. You spent $10K on a wedding type that literally doesn't exist here. Even the VFW halls come with hefty rental fees, and caterers start at $35 a head without alchohol or service. Reserving a church in the district often costs several thousand dollars, which is why we're not getting married in one. We don't have extended families who can cater even a tiny wedding. Etc.
Our options were, go to Vegas, or spend more than we initially wanted to. For various reasons, we didn't go to Vegas. We're having a cheap wedding by local standards. But cheap here costs a lot of money.
Now, we're not spending money we don't have--it's all cash flow, and we've got a decent emergency fund. If that were the choice, we'd go to a JP and skip the wedding. But believe me, in DC, $50,000 is not especially profligate. It means that you didn't buy a dress from David's Bridal, skip the DJ, forego videographers, buy your flowers from Costco, and so forth. But it doesn't mean you splashed out. The better hotels run about $200 a head for a reception, and the non-hotel venues are around $10-15,000 just to get in the building. Those weddings are in the $150,000 and up range.
I've heard similar -- worse, actually -- things about NYC, so I don't doubt what you've found. If it is that bad we'd certainly opt for the JP and go out to drinks with friends and parents option, but then again that's given our income.
I am intrigued by the price differences. From what you're saying it sounds like a 50,000 wedding in DC would cost you about $15,000 in Seattle or Portland, which are not low-cost wastelands (though to me, hiring a videographer _anywhere_ counts as "profligate"). A 3 or 4 to 1 cost ratio is much larger than the income gaps between those cities, and I think larger than the housing cost difference too. The lack of low-end competition probably hurts (you can easily and cheaply reserve a park site in Seattle or Portland for small ceremonies, for example).
To be a fair comparison, was that 50k for the District proper, or including suburbs? My 15k number assumed you didn't insist on a downtown Seattle venue, and so to be fair you'd want to compare to Fairfax County or such. Saving five grand on the venue would easily cover renting some minivans to move people out and back if needed.
I also wonder if union issues come into play. From the bit of wedding research I did I got the sense that wedding vendors anywhere in the Northeast, even in smaller and less desirable cities were significantly more expensive than in the Northwest. Higher labor costs due to unionized service workers? People in the NE are just willing to shell out more dough before going for the JP option?
It depends on how far out into the suburbs you head. Our friends in DC mostly don't have cars, and we have fairly time-consuming jobs, so while we could get a relatively sweet deal by driving 1.5 hours into Virginia or Maryland, that's not really a feasible option for us.
It sounds like the right way to phrase your situation is not that it is impossible for you to have a cheaper wedding, but that the value of your time is such that it's worth having an expensive and very convenient wedding over a cheaper and less convenient wedding. Not everyone would find it worth paying $10,000 (?) extra for that.
I don't get the "demanding jobs so we can't drive out of town and back" point though. Are you planning to get marrried over lunch and be at work most of that day?
Have you planned a wedding? As a female? You have to spend weeks traipsing around locations, often on weeknights, and then there are all sorts of vendors you have to meet with. If they're an hour and a half away, that's immensely time consuming, since you want to meet with at least two or three in each category. If you use vendors from closer to DC, they charge DC prices, and you don't save any money.
"What psychological quirk makes you maintain three expensive cars, flowers, and fine wine when you're both out of work?"
Denial is not a river in Eygpt.
--Stuart Smiley
Regarding the "as much house as you can afford" argument, I come from a family that did that. We didn't get vacations, and as kids we never had the kind of clothes or activities that let us keep up socially in the places where we lived. That was unpleasant.
Now I'm absolutely paranoid about getting stuck with too much house. Which is why I managed to avoid getting sucked in to the real estate boom and crash. I would rather use my money to do things than sink it all into a giant box to hold my stuff.
Blew through severence and still unemployed?
Seems to me that a demonstrable lack of good judgment could be the cause of both.
Read this and comments while eating breakfst at my desk this morning and got a stomach ache.
MC @ 8:58 is snobbish, sexist and I think exactly right - certainly describes me and my perceptions to a T. Same for movertyper at 8:20. reminds me that political preferences does not equal lifestyle choices.
My father, GRHS, always used to say "where do all these people get all this money?" as we watched so many around us living much higher than we did growing up back in the 50s and 60s. I took it as a sure sign of my loserdom when I found myself asking precisely the same question in the 90s and 00s. That may be true but some of the so-called winners were and are not much more than social parasites.
Hey, I'm a regular middle class woman myself. If I'm sexist, it's against the guys who make fools of themselves. My prejudice against female gold-diggers goes by another name.
People at all levels of wealth and hotness should find compatible partners. But relationships that are essentially an exchange of money for hotness tend to hit the rocks when either the money or the hotness goes away. Both men and women should be aware of that and plan accordingly.
Actually, I meant it as a compliment. I think that your biases are close to mine, so they must be right in every sense. And I admire the rather clinical manner in which you skewer pretensions.
I spent my childhood watching my mother's friends, and my friends' mothers, get dumped for younger women as their husbands became more successful. My father wasn't the type to do that, fortunately for our family, but I saw enough of it to vow it would never happen to me. And it hasn't.
Women aren't always guilt-free, of course. I also watched women with much older husbands run around on the side. I'm not actually Miss Marple, but I still think you see all sorts of human wickedness when you live in a village.
There are only so many ways to be an ass, and all of them have existed since the dawn of time. It isn't hard to spot them and comment on them.
The real lesson is how middle class wages have been stagnant ever since Raygun took over.
Did blighter steal your login?
BTW, everyone I know is super-fabulously hot and has had $1 million weddings. Anything less is for losers.
If there's one thing I learned from living through the 2001 recession, it's that I'd rather have missed out on a few vacations or dinners out that I didn't need to give up, then have to give up eating because I didn't cut expenses fast enough.
I think this sentence by Megan sums up the main reason why these bozos didn't have more sense: they had never learned their lesson before. People apparently tend to need first hand experience to grasp basic truths. A childhood of poverty is a pretty massive disadvantage for most persons -- but learning the essential reality of finances might be one advantage.
You would think that all or nearly all human beings -- at least those with enough basic intelligence to acquire reasonably lucrative white collar jobs -- would come equipped with the basic intuition to realize a radical cut in income necessitates a radical cut in expenses. I mean, it's basic math.
But I think many of us -- perhaps a majority -- don't grasp this reality until it's too late. Or until we learn a painful lesson. Our blog hostess apparently learned this lesson back in 2001. The ad executive couple didn't. Why people need a first hand experience to wise up to such situations is beyond me. Maybe evolutionary psychology would yield answers. But no doubt the ad exec thought he wouldn't ever be one of those people who fails to replicate his previous high-paying job, and that therefore maintaining his lifestyle was simply a matter of depleting his savings or borrowing for a very short time.
Only fools learn only from experience.
As Edmund Burke said "Experience is the school of mankind, and he will learn at no other."
By the way Megan, could we get a post on following Dave Ramsey's philosophy? I think that would produce a very useful comments section, with lots of ideas on how to live frugally.
No, actually, I cut expenses immediately. But I'm crazy that way.
The cases of wine are especially unforgiveable. We saw our family income cut in half (wife got a dream academic job in a smaller city where lawyers make about a third as much) a few years ago, and one of the first things we did is switch from $35 of booze a night (1.5 bottles of $20 wine and a couple of call-level cocktails) to about $6. One glass of $10/bottle wine with dinner, and then if you still need to drink, that's what the plastic jug of rotgut whiskey (ok, that's an exagerration -- it's mid-tier Seagrams for $15 for 1.5 liters) is for. I'm not sure we were spending $1000 a month on booze, but it was probably close to $700. Now we're at maybe $125, probably less.
Yes, we drink too much. But at least we're doing it cheaply now.
I don't know why everyone is so shocked by the story.
I find Mcardle's approach admirable.
But in my experience, most college educated workers who lose their job find lifestyle changes like cutting cable too much to take. So for better or worse, they borrow cash from a wealthy family member or go into some credit card debt.
I find Megan's concern trolling very admirable!
They're conditioned by both experience and the Great Ad Campaign to see the high-level lifestyle as 'basic and normal'. Thinks like cable TV, new cars, expensive entertainments and dining out a lot, etc, are seen as 'the basics'. Giving them up is not associated in popular culture with frugality or wisdom, but with shameful failure, and the pop culture assures them that everyone else has this stuff, so they have to keep up.
Good advice, IMHO, for people in their situation, is to turn off the TV. It has much more effect on how we think than is widelyr realized.
I also wonder about these articles because you'd have to think there are more sympathetic characters out there.
There has to be some guy in California or South Florida who thought he was being responsible by having an 8 month emergency fund and going with a 15 year mortgage back on 2006. He got laid off a year ago and now is in forclosure - all those extra mortgage payments have, of course, been flushed down the toilet as he has no equity.
I find the most interesting part of this story the people who thought there were being the model of prudence - putting their money in something safe like a home, prepaying the mortgage, etc. and now they've been wiped out.
What psychological quirk makes you maintain three expensive cars, flowers, and fine wine when you're both out of work?
Denial?
"'We were stupid,' he says. 'You become accustomed to a certain lifestyle. When your world changes and things dictate that you change, you're pretty stubborn to give things up.'"
The psychological quirk that lets people do this is basic human nature, the tendency to define 'normal' in terms of what we're used to, what we grew up with, and/or what our 'circle' does or appears to do. To define 'basics' up, and ever up, in response to the brilliantly successful ongoing mass ad campaign that is popular culture, as well.
The older I get the more I am able to perceive the way movies, TV, magazines, etc (not just the ads, but the whole content) together comprise a mass 'ad campaign' that redefines luxuries as necessities and even 'entitlements' and a 'normal lifestyle' as something radically out of synch with the realities of genuinely normal incomes and financial resources.
An no, they are not outliers. More's the pity in several senses. They're an extreme example, most people are not nearly that bad, but they are far from freakish exceptions. Both the reaction to sudden loss of income and the tendency to overspend income already coming in are aspects of this.
It's obvious in this case why this thinking is self-deluding and destructive, but the exact same thing turns up in other contexts were it is simply seens as 'normal'. For ex, it's a sad but true fact that most people really can't afford new cars at current prices. They buy them anyway, and don't question it.
Remember when car ads on TV gave the sticker price? That vanished years ago, and then they started just giving the monthly payment, which stayed more-or-less constant as the finance period got longer and longer, until now it's running up to 66 and 72 months!
These folks in the example are just this sort of thinking in an unusually pure, undiluted form.