@halcyondays:

This is not to say we should feel sorry for people or whatever, it's just to say that very few people are immune from debt:

Take a hypothetical lawyer in NYC at a top firm: They might have a $165,000 a year salary. But chances are high, they've got about $165,000 in educational debt from law school ($120,000) and undergrad ($45,000).

So, with renting an apartment in NYC and having to buy clothes for work, how long do you think that person will remain in debt?

Same thing with a doctor. Or any highly skilled profession where you make a lot of money. Except for those whose rich parents paid their way, most people who earn a lot of money have a lot of debt as well.

Even if they had rich parents paying for school or went on full rides, they're SUPPOSED to have a nice house or nice car or whatever, which perpetuates the debt cycle.

Debt is not something earning money automatically makes you immune from.

You're not doing it right then. I have a 20yo civic, and I could fit two car seats in just fine - a pumpkin seat, and a more standard full booster. Better, I could still get my third kid in the back seat and belted in as well!

Middle class these days seems to be anyone who has a job, and doesn't earn a million a year or more. I'm proud to be working class!

I would be able to live for over 12 years on Mr. Joegriner's combined $200,000 severance pay and $100,000 savings - since my take home pay is just under $2,000 per month.

I read the article. Boo dee freakin' hoo.

A $4 a day coffee habit is a bit expensive, but nothing compared to other extravagances. Consider it a reward for going on the Wi-Fi network and job searching or communicating with your leads...

lol @ severance for a not rich person.. most lower paying jobs DONT HAVE IT. unemployment on a $15/hr job wouldn't last 6 hours for a family his size, fuck 6 months.
people are saying he's a fucking idiot because he has a ton of money AND job offers. he's going to end up totally broke.
the end result is the same, but getting there is drastically different, so yeah, that guy is a fucking moron, and no, the responses wouldn't be the same because poor people are poor and rich people are rich.

well, he's looking to make your entire combined salary plus about $70k more. if his wife works (didn't read article, she may be working or dead or whatever), then that's just bonus money. if you had $70k extra, would you consider yourself wealthy or just middle class still i guess is the question. i consider you wealthy based upon what i make, and I live in one of the most if not the most expensive areas in the country. however, i suppose i would consider myself lower middle class.

@Rectilinear Propagation: Life imitates the Three Stooges?

@lmarconi: Why not? Consider the local cost of living. My wife an I make a combined $130k. But, living in the DC area, we drive a more than 10 year old Civic (we need a second car since it won't fit two carseats) and my train commute averages 2 hours each way just so that we can sock money away for retirement.

I would nail us squarely in the middle class.

@Eyebrows McGee (now with more baby!): Your point makes sense. Sort of. When I graduated from law school, I couldn't find permanent work, so I temped, thinking I could get experience that would land me at a small firm. Problem is, nobody considered the temp work "experience," so I got treated like a new graduate.

I had one temp place offer me work as a paralegal, but they made it clear that I would never be able to break into the attorney's ranks at that point. Speaking with other attorneys, that point was reaffirmed. So I passed.

Three years after graduation, I found a job as a program analyst at a government contractor. The work is tangentally related to law school, and I'm trying to find some legal work, but at this point, I have more or less given up.

So yeah, I understand why he might be hesitant to take something that will derail his foture career. But, we had my wife's salary and my temp earnings to keep us going. If she had lost her job, I would have taken the first thing I could find (I had already decided I would enlist). When push comes to shove, family comes before career. That's what he doesn't seem to realize.

@pecan 3.14159265: Why Morton's? Why not Ray's?

Although, would Morton's be too ostentatious for a Consumerist-DC-Lunch meetup?

Sorry, is this somehow different from people who weren't making a quarter million a year and got a large severance? Somehow it's better for the guy making near minimum wage with no savings? I guess I miss the point of all these rich-guy-sob-story articles.

The guy mentioned in the WSJ article is, IMHO, an idiot but I do feel sympathy for some young person who spent three years in law school, incurred a $100,000 debt, and now can't find a job. Not every one of these people were born with a silver spoon. Some of them earned it and it's hard when it's taken away and you still have a family to support and mortgage to pay. Yeah, it's all right to look a bit strangely at the guy who's spending his severance on steaks and private schools, but not everyone is in that position.

@SkuldChan:

My entire, large extended family (not counting school-aged kids) could easily retire on 80 million. The scale of it boggles the mind.

Look, I make pretty good money, but I would scrub toilets cheerfully (and thoroughly and efficiently) if thats what it takes to make a go of it. I would do that because I know that with my get up and go ,I won't be there for long. These people seem to have lost that desire to succeed.

The desire to work is what empowers us. Not what we make on the job.

@Mecharine: Exactly my point, the cost of even just moving is beyond the ability of lower income folks to find. Getting a spare $1000.00, not a lot of moving to a new town money at all, is impossible. Why else would folks stay at by the week motels paying those rates if not because geting a lump sum to go on to a better location just ain't gonna happen.

While a $100k/per year job for you may seem like small potatoes, their aren't alot of people out there that will ever see that much being made in a year. To pass it up because it doesn't give you the benefits you are seeking is just plain old fucking stupid. I don't wish ill will upon anyone in life but these people, especially the Family of four, is in for a huge wake up call and all I can say is it sucks to be you but I don't really care. Your stupidity put you in that place and you can only blame yourself.

I don't make a ton of money, but I do okay - and one thing I employ that everyone should do: THINK BEFORE YOU SPEND MONEY! If it's the sports car or the latte, think about if that money you're about to spend is really worth it. You never know when you might need it for a rainy day.

And when it's already raining, you should be even more frugal. If you're unemployed, maybe keeping 3 cars for two people is a bad idea. Clean your own house instead of hiring someone.

@pecan 3.14159265: And that would be part of the problem - someone who has no skills to adapt to a changing environment have no business making all that money. Probably why they got laid off in the first place.

@Eyebrows McGee (now with more baby!): A very good point. I was really blown by him turning down the 140k job due to no severance.

Lots of exploding heads in this thread...

Guy #1 - it probably is hard to pull kids out of private school but public schools in Silver Spring, Md. are generally very good. But no vacations, accept whatever reasonable job offer comes your way and the wife should go to work.

Gal #2 - it makes sense to spend on networking events within reason. It also makes sense to spend on personal care, again within reason, so that you present well at an interview. Otherwise, eating out and Starbucks should be out.

Couple #3 - you don't find out you are pregnant 4 months after being laid off, either you were trying to get pregnant (since you don't have a job it might be the right time to have a baby) and you got pregnant or you are careless or stupid. You don't keep three cars when you are both laid off, if anything you downsize to one car since it sounds like one of you is staying home with the new baby. Cases of wine, cleaning lady, who are these people, Mr. Sam and I are both employed as professionals and we've never employed a house cleaner - clean the house yourself, you should have pleanty of time to do so since neither of you don't have a job.

@Freedomforall: Yes, but there's also a thing called free will, and there's also a thing called a moving truck. You come from a crappy no-name dying town in which you're the poorest of the poor? Take what you can and get the hell out of there. Make a better life for yourself in any way you can.

@squinko: Did somebody say something about barbecue? Sign me up!

@pecan 3.14159265: Unromantic but so highly practical that I would still get joy out of it.

Not to be mean but [Ben this could be a new topic] there are folks in the under $20,000 income range in this country in the south and in small forgotten towns who have next to nothing in their lives and never will. This idea that "TV" type people are the "population" is bull. Go research the mine towns and burnt out rust belt areas a little bit and a shiver will go up your spine. Kids who never see a doctor much less a dentist, never get eye care, roll along from one crisis to the next always feeding some trashy truck or car to keep a way to even get to an overpriced grocery store. They are to put it hard and cold a lot of people in America that, in another time, could have passed for folks in a film about the former Soviet Union as far as poverty.

There are tons of people in this world who would look at the people griping on this site that they're "poor" and gladly switch places with them. "Rich" and "poor" are relative. All kinds of people at all levels make mistakes with their money.

While there is a certain amount of amusement in it, it's kind of like laughing at someone who trips. You laugh, then feel a little embarrassed, and then maybe try to help them up.

@MikeToole: I got a few months severance and I'm nowhere near the $200k salary mark.

@Cant_stop_the_rock: The more money you have, the more careful you have to be to manage it. If you're making $200,000 at a high level job, chances are, you're not working in a town of 10,000 people. You're working in a city or near a city, and you are probably a little older, and you probably have kids.

@Eyebrows McGee (now with more baby!): Now I want lemonade. :( In a way, recent graduates like me and Mr. Pi, and more recent graduates (like from 2009) are benefitting from having these rough patches. It sucks, and it'll make us all go prematurely grey, but at least if things were hard when we start off, when they get better, we'll remember what it was like before and hopefully that'll be a lesson we'll carry forward.

@bohemian:

My friend is a retired Bear Sterns executive (he's still young) who has his priorities straight and isn't trying to keep up with the Joneses. All his properties are paid for including the Manhattan penthouse, his child's education is already funded to whatever school he/she wants to go to, his child already has money set aside for a house anywhere in America that they decide to live and he's planning on downsizing soon to get away from all the material things he doesn't need.

Granted he may be one of the rare executives with his head squarely on his shoulders but they do exist.

There are some things that you might take a chance on, because cutting the expense would cost you money in the long run. Selling an expensive car makes sense if you're going to be out of work for a year; it doesn't make sense if you're going to be out of work for two months. Same with your house. The problem is you don't know how long you'll be out of work, so you don't know what makes sense to cut. But at very least you need to cut discretionary spending as much as possible, especially eating out.

@ZekeSulastin: I doubt that the story would be the same. I don't know about you, but I got laid off in both Bush recessions, and didn't get large severances for either. One of them was two weeks, the other four. I only ever hear about these lavish severance packages when wealthy executives are involved; regular Joes just get the boot and a few weeks so they can try to keep heads above water.

I agree that there is a lot of class warfare evident here, but I think the responses would probably be similar. People don't have much sympathy for others who make poor financial decisions. When the mortgage meltdown was beginning I don't think we saw much sympathy for the people who bought houses they couldn't afford (though there were people who put all of the blame on the mortgage brokers who got them the loans).

@soloudinhere: I would live a life of relative luxury if I made $16,000 a month. Actually, I'd pay off my car. That's so boring and unromantic, isn't it? Pay the bills, then go to Morton's!

As your income goes up, your expenses usually go up. Most people say they wouldn't raise their standard of living if they made twice as much, but you don't see many people making $200k living like hermits. Taxes alone eat up a huge chunk of that $200k. Even if you're able to bank $50k per year, it costs $400k+ to buy a small house in some areas of the country. Why spend 10 years renting when you can get a mortgage at a ridiculously low interest rate?

I do agree about the cars, though they sometimes have crazy low interest rates as well so it doesn't always make sense to pay cash.

There my limited sympathy just vanished.

Honestly, suck it up, take what you can get and stop being such a spoiled baby about it. That's certainly what the rest of us have to do.

But for someone with some savings, and a hefty severance, and a hefty salary (when he was working), life is obviously a little different.

For one, if he is confident that he will be back on top in 6 months, let him spend away. Who cares? In 6 months, when the severance pay is gone, he will file for unemployment and make more per week than many of us make per month. But he's been paying into unemployment "insurance" more than we have. So quit whining.

I bet you that by "out of money in 6 months" he means their immediate checking accounts, and not the kids' college funds, his own retirement funds, etc.

And those of you saying he's being too picky about a job, i think you should reconsider your POV. Benefits are worth a lot of money, and in the case of severance in a turbulent economy, a lot of mental security. My salary is typical for an entry level engineer, and my benefits are worth more, meaning I feel good about what I make. If I had no benefits, and made the same salary, my net worth per month would be less and I'd be pissy about it. severance is a benefit that this guys values greatly. he can be picky about it if he wants.

@ZekeSulastin: I can't defend blatant stupidity, but I can defend the misconceptions that are in this thread, apparently by people who haven't actually RTFA. These people are making $140,000 to $200,000, which is nowhere near the multi-millions made by the CEOs of banking organizations that a lot of commenters are getting angry about. The article is not about some mid-level exec at BofA who made $10 million last year. It's about upper middle class people who are making stupid decisions. I'd like for commenters to realize that WSJ wasn't talking to extremely rich people.

@lmarconi: Arguably, he's probably only waiting for $200,000 in salary, not multi-millions. It seems like a lot of commenters think this is the life of the fabulously wealthy - it's not. It's upper middle class, but it's not like these people can afford Bentleys.

@theblackdog_FeelingRandom: What I'm seeing is that this person most likely had a very set and straightforward path, and never deviated. Never getting the chance to deviate, and never wanting to deviate, he has no concept of what it's like to have to make things up as you go, to adapt and to just go with the flow and adapt yourself to your new situation. He just never figured out how to make things work. Everything always seemed to fit right into place, and now it doesn't, and he has no concept of how to make lemonade from lemons. He's always just had lemonade.

This is similar to how lottery winners (the poors) blow all of their money and have nothing to show for it in a short amount of time. Some people just don't have enough sense to handle personal finances and balk at the proposition of paying someone to do it for them.

He needs to learn that it is okay to cut back on spending and take a job for less money, fast.

*head explodes*

@mongoloid: You only make $16,666 yearly? The first person mentioned in the WSJ article made $200,000 a year. I'm not being nitpicky here, but your entire basis for your post was that this person makes more in a month than you make in a year. Unless you make $16,666 a year, obviously it isn't the case.

I don't think it's fair to say that all these people ran the economy into the ground. They're not all Merril Lynch CEOs. Some of them are in other high-paying fields that have nothing to do with the banking crisis.

However. You can try to find back-office work or temp work where you're out of public view and leave it off your resume. Some kinds of often-lower-paid work are generally "respectable" -- teaching or tutoring, even part-time, for example. Even if there's a real fear that temporary work will damage your job hunt, there is plenty of work he COULD be doing that WOULDN'T. He's obviously not interested.

And this: "After fruitless negotiations, he turned down the job. The reason: The position didn't include a guarantee of severance pay. Says Mr. Joegriner: "I just couldn't take the risk."" is just moronic.

Maybe a more interesting point is how handicapped in some parts of the real world executives (lawyers, doctors, etc.) can be ... a lot of these guys graduate into high-paying salaried jobs but have no idea how to do anything entrepreneurial or how to function OTHER than in a large-company setting. A lot of them have a fairly limited skill-set that applies only to middle-and-upper-management in large companies. A lot of them don't KNOW how to find a job or do temporary things, and a lot of them are paralyzed by the fear of the newness of it. Everyone finds strange waters difficult to navigate, and I've definitely seen some high-level professionals who completely froze up when laid off and took some time to get their shit together (though generally before unemployment ran out). Not only is being laid off psychologically difficult, they simply had no idea what to do next and had to actually figure out HOW to hunt for work and HOW to be unemployed, and there was a learning curve.

Blargh, I don't feel like I expressed that well but I give up, I'm at novel length already. :)

The problem is, they weren't saving much money in the first place, yet they borrowed anyway.

Yes, by all means, go out and socialize your savings away. You will be sane when you run out of your little savings stash and start living on the streets with those crazy homeless people. What a comfort!

Ha ha ha. This.

@HurtsSoGood: I don't know. I have a lot of sympathy for people of all income levels who find themselves faced with immense hardship.

But if you lose your job and still make the decision to keep up with the joneses rather than save it, I have a little less sympathy. It doesn't matter how much money you had before - I have little sympathy for stupidity.

I suppose now I'll have to say that "My nose bleeds for them."

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."

They are both out of work and they have a CLEANING LADY!? What is wrong with them? The unemployed can't deign to sweep their own floors? It aint like their unemployed butts are too busy.

There was the post about the woman who was on a talk show about her spending. Her children had serious medical needs but she couldn't or wouldn't stop shopping. If you think these comments are bad you should have read some of those.

Why not? Stupidity knows no economic or class differences.

Yes the CEO who steered Merill Lynch into the ground got 80 million + in severance for his trouble.

@Jerry Vandesic: IAWTC. The same rules of "save your money" and "don't spend more than you make" and "have a budget" apply if you're making $30k/year or $3 million/year.

A few days later, Mr. Joegriner received an offer and a contract. Despite the earlier enthusiasm, doubts began to surface. "What if we went all the way out there and they laid me off?" After fruitless negotiations, he turned down the job. The reason: The position didn't include a guarantee of severance pay. Says Mr. Joegriner: "I just couldn't take the risk."

@Coles_Law: WTF?!?!

I just...I can't...

*Head explodes*

Nope, sorry. I just can't have sympathy on people who spend more money in a month than I survive on all year long.

I can't remember what that one was about though...

It's kinda weird.

Stories about those poor, poor rich people piss me off like nothing else in the world.

Maybe they should make The House of Mirth & Grapes of Wrath required reading as soon as one becomes unemployed.

I have no faith left in the executive classes.

@craptastico: maybe they can take out some loans?

"Mr. Joegriner, 44 years old, has had several offers. He's turned each down in hopes of landing a position comparable to what he held before"

+

"By Mr. Joegriner's own calculations, the family will be out of money in six months if he doesn't find work."

=

*Head explodes*

@microcars: Thanks!

maybe we can start some kind of fund to help these guys out. it's unfair to expect them to be responsible for their own finances.

The only message behind the WSJ article is that people who keep spending wildly after they are laid off, even though they get signficant severance, are going to have a hard time when the severance ends. If you look at the people mentioned in the article, they had limited savings and didn't change their spending behaviours after getting laid off. That's a bad plan, regardless of how much money or severance you have.

WSJ on the other hand...

brilliant!

Hey Ben, where is the link?