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Mom goes from $70K salary to food bank
http://www.cnn.com/ 2008/ LIVING/ personal/ 03/ 27/ foodbank.family/ index.html?eref=rs...
Just weeks ago, Patricia Guerrero was making $70,000 a year. But then she was laid off. With bills piling up, this middle-class mom recently went to a food bank to feed her children. "I sat there and I cried. I was like, 'This is really where I'm at?'"
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Community
http://susiemadrak.com/2008/03/27/21/21/community-3/Community Mar 27th, 2008 at 9:21 pm by Susie If you have anything to spare, this is a really good time to give money to your local food bank: ALTADENA, California (CNN) - When she was laid off in February, Patricia Guerrero was making $70,000 a year.
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How Bad Is It? One Family's Slide from $70K to Handouts
http://sharonhr.blogspot.com/2008/03/how-bad-is-it-one-famil...How big is your emergency fund? My just-in-cast fund needs a major boost and this story from CNN has an extra message about the need for emergency funds and the importance of a diverse stream of income. The news story features one woman's drop from a
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Whining Our Way To Prosperity
http://right-thinking.com/index.php/weblog/comments/whining_...CNNs marquee story right now is about the awful plight of a woman who was making $70,000 a year, lost her job and is now going to a food bank. I dont mean to be a jerk here, but reading the details doesnt exactly fill me with sympathy. Shes in the
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More Middle Class Families Experiencing Hunger and Fear
http://www.everydaycitizen.com/2008/04/middle_class_increasi...When she was laid off in February, Patricia Guerrero was making $70,000 a year. Weeks later, with bills piling up and in need of food for her family, this middle-class mother did something she never thought she would do: She went to a food bank. "It brought tears to my eyes, and I sat there and I cried. I was like, 'This is really where I'm at?' " she told CNN. "I go 'no way;' [but] this is true. This is reality. This is the stuff you see on TV. It was hard. It was very hard."During the first quarter of 2008, visits to our Resource Center by individuals and families seeking assistance with food and living expenses increased by over 30% compared to the same time period this time last year. This is the news from Dallas, Texas. The increase is both amazing and a very real cause for concern. Growing numbers of working people are not doing very well. And, it appears that the numbers are growing. Take a look at the following report to read more about a spreading national trend... From $70K to food bank, one family's struggle By Thelma Gutierrez and Wayne Drash CNN ALTADENA, California (CNN) -- When she was laid off in February, Patricia Guerrero was making $70,000 a year. Weeks later, with bills piling up and in need of food for her family, this middle-class mother did something she never thought she would do: She went to a food bank. Patricia Guerrero was laid off in February. Desperate to make ends meet, she recently went to a food bank. Click to view previous image It was Good Friday, and a woman helping her offered to pay her utility bill. "It brought tears to my eyes, and I sat there and I cried. I was like, 'This is really where I'm at?' " she told CNN. "I go 'no way;' [but] this is true. This is reality. This is the stuff you see on TV. It was hard. It was very hard." Guerrero is estranged from her husband and raising her two young children. She's already burned through her savings to help make ends meet, and is drawing unemployment checks. She has had to take extreme measures to pay for her interest-only mortgage of $2,500 a month. In fact, her mother moved in with her to help pay the bills. Guerrero even applied for food stamps, but was denied. "I never used the system. I've been working since I was 15-and-a-half. I needed it now and it turned me down," she said. Stories like Guerrero's are becoming more common as middle-class Americans feel the pinch of an economic downturn, rising gas prices and a housing crunch, especially in a state like California that has been rocked by foreclosures. On Wednesday, a key government report on the battered housing market found new home sales fell to their lowest level in 13 years in February, suggesting the nation's housing market is still struggling. Americans also have been attending in large numbers foreclosure fairs where mortgage lenders, financial planners and counselors offer tips to hard-hit homeowners. "Our economy is struggling, and families in the 'Inland Empire' and across the nation are hurting," California Rep. Joe Baca said, referring to an area of Southern California in his district. "Our housing market is in a state of crisis due to rampant abuses of sub-prime lending, and unemployment is rising. At the same time, the cost of necessities such as gas, healthcare, and education continue to rise." Daryl Brock, the executive director of Second Harvest Food Bank in California's San Bernardino and Riverside counties, said his organization supplies food to more than 400 charities in metro Los Angeles, from homeless shelters to soup kitchens to an array of food banks. While the majority of people they help are working poor families, he said they have seen some major changes. In the last 12 to 18 months, Brock said, the agencies he supplies have begun seeing more middle-class families coming to their doors. "Our agencies have said there is an increasing number of people coming to them for help," Brock told CNN by phone. "Their impression was that these were not people they normally would have seen before. They seemed to be better dressed. They seemed to have better cars and yet they seemed to be in crisis mode." He added, "The only thing they can do is give us anecdotal evidence that they think it's because of the sub-prime mortgage meltdown and the housing crisis." A former loan processor, Guerrero knows all about that, although so far she has been able keep her house. She used her tax refund to help pay many of her bills for the first two months, but now that money's gone. She says she's now in a middle-class "no-man's-land." "It just happened so fast. It happened in a matter of -- what -- two months," she said. She's eager to get back to work and to hold onto her home until the market turns. But for this single mom, every day it becomes harder to hang on. "It's just depressing," she said. "For me, I just don't want to get out of bed, but I have to. That's my hardest thing. I have to." [from CNN.com, full article here] What's the word from your community?
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Middle Class Food Bank
http://wheresthefun.wordpress.com/2008/04/15/middle-class-fo...For some people, going out to eat and to the movies just isn’t in the picture any more. The job market is down and people are losing their jobs. The housing market is down as well, people can’t sell their houses. CNN told the story of a single mother who lost her $70,000 a year job in February. Patricia Guerrero has been doing everything possible to support her two children and pay the bills. She gets unemployment checks, but that isn’t enough. She found herself going to food bank, something she never thought she would do. She also applied for food stamps, but was turned down. “I never used the system. I’ve been working since I was 15-and-a-half. I needed it now and it turned me down,” Guerrero said. Daryl Brock, executive director of Second Harvest Food Banks in California said they’ve noticed a change in the type of people that come in. The poor economy is now taking on the middle class. Original Source: CNN
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Real-Life Example of Why You Need an Emergency Fund
http://www.freemoneyfinance.com/2008/04/real-life-examp.htmlToday the Money Blog Network members are doing a group writing project on emergency funds. As such, it seems perfect for me to highlight this CNN story a reader recently emailed to me. It tells of a woman who was making $70k per year, was fired, and within two months, she had to go to a food bank for assistance. The highlights: When she was laid off in February, Patricia Guerrero was making $70,000 a year. Weeks later, with bills piling up and in need of food for her family, this middle-class mother did something she never thought she would do: She went to a food bank. I'm saving commentary until later, but here are a few more facts that show why she's having financial trouble: Guerrero is estranged from her husband. We don't know the circumstances, but we do know that the breaking up of a marriage can be financially devastating. Altadena, California. Expensive place to live. Here's what Sperling's Best Places says about the city: Compared to the rest of the country, Altadena's cost of living is 44.99% higher than the U.S. average. The income per capita is $33,527, which includes all adults and children. The median household income is $70,673. Points to be made here: If she moves she could probably save a ton of money. She was earning a decent amount -- right in the mid-range of all households. She has had to take extreme measures to pay for her interest-only mortgage of $2,500 a month. Here we go now, some cold, hard facts. "Interest-only mortgage" screams "bought a house she can't really afford." She used her tax refund to help pay many of her bills for the first two months, but now that money's gone. First, she got a refund. Probably a good thing for her since she would have blown the money anyway, but for those who can control themselves, getting a tax refund isn't a good idea. Second, if she wouldn't have had the refund, she would have been in trouble well before two months were passed. Here's the comment the reader emailed me: This is a story that fails to get the pity out of me, but it’s a good hard lesson on why savings of at least 6 months should be accessible. My thoughts: 1. True. You MUST HAVE an emergency fund. Otherwise, you are left to chance if (when?) financial trouble like a job loss comes along. 2. People need to learn to spend less than they earn. Doing this gives an even bigger cushion when financial trouble hits. Seems like this lady was spending exactly what she earned (maybe more -- we don't know what her credit cards look like.) 3. Stories like this will become more and more common as people stretched financially lose their jobs, have mortgage rates re-set, and so on. All the more reason to have a good buffer between what you make and what you spend. 4. I feel sorry for anyone caught in this situation, but she didn't really do herself any favors in the way she managed her money prior to the job loss. Besides, as one reader recently commented here: I don't mean to be dogmatic, but I just wanted to offer some reminders: 3 billion people on the planet live under $2 a day (grinding poverty) including 1 billion living under $1 a day (verge of starvation) and every day 30,000 children die from starvation and preventable diseases There's poor and then there's poor. This lady may be down on her luck, but there are billions of people who would trade places with her in a heartbeat.
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From Food Bank to Financial Stability
http://unitedwaycapitalarea.blogspot.com/2008/04/from-food-b...You've probably read this article at CNN.com in which Patricia Guerrero relates her story of how she went from $70K to a food bank in a matter of months. Daryl Brock, the executive director of Second Harvest Food Bank in California's San Bernardino and Riverside counties, said they have seen some major changes. In the last 12 to 18 months, Brock said, the agencies he supplies have begun seeing more middle-class families coming to their doors. "Our agencies have said there is an increasing number of people coming to them for help," Brock told CNN by phone. "Their impression was that these were not people they normally would have seen before. They seemed to be better dressed. They seemed to have better cars and yet they seemed to be in crisis mode." As we start to hear more stories like this one from the downturn in the economy, we should keep in mind that a families in similar situations have an array of options in Central Texas that help them gain their financial footing--these options go beyond simply drawing unemployment and visiting the food bank. Take another look at our Theory of Change, where we outline key strategies that help individuals achieve financial stability.Take another look at our newly funded programs in the Financial Stability category.If you visit one of the sites of our new programs like Foundation Communities, or Capital IDEA and read some of their success stories, you'll discover something very much the opposite of the CNN.com story is happening--something like, "From Food Bank to Financial Stability."
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Food or Coach handbag?
http://financialgal.com/2008/04/02/food-or-coach-handbag/Food or Coach handbag? April 2nd, 2008 by financialgal The Frugal Duchess, another blog that I enjoy reading, recently posted CNN’s profile of a middle-class mother with two kids. In the CNN piece, Patricia Guerrero describes how she was forced to go to a local food bank for groceries after she lost her $70k a year job. A commenter on the Frugal Duchess blog noted that the video accompanying the CNN article showed Guerrero describing how she took off her Tiffany bracelet and ditched her Coach handbag in her car before entering the food bank. The CNN footage of Guerrero’s house showed luxury fixtures and appliances, including black granite counter tops, a flat plasma screen tv, a stainless steel refrigerator and hardwood floors. Guerrero also talked about how, at the food bank, the lady helping her offered to pay her utility bill. The commenter naturally wondered why Guerrero didn’t try to sell her luxury possessions before having someone at the food bank, who might be even poorer, pay her utility bill. The Frugal Duchess posted a follow-up on this comment and listed some items she would sell if in the same situation and things that she has already cut back on. I had read the same article on CNN.com and marveled at how quickly Guerrero’s life unraveled. Were her finances that bad that she would have to go a food bank one month after being laid off? After reading the Frugal Duchess blog, I went back to CNN.com and watched the video of the woman’s interview. Guerrero said that she had used her tax refund to pay bills for the last month and that with her unemployment check and rental income from her mother’s house, she can only afford to cover her $2,500/month mortgage. There is no other money to pay for food or utilities. Guerrero also complained that she applied for but was turned down for food stamps because she owned her house. However, what struck me about the interview was Guerrero’s obliviousness as to why she is in this situation. 1. She said that she didn’t take her Coach bag into the food bank. “[The handbag] isn’t worth anything because [I] don’t have a dime.” 2. Describing how she applied for but was rejected for food stamps: “I never used the system…I needed it now and it let me down.” 3. In response to the food bank employee’s offer to pay her utility bill: “This is really where I’m at?” I’m channeling a little Suze Orman here, but Guerrero needs to shake off the deer in the headlights attitude and take control of the situation. Guerrero may or may not have learned her lesson about lacking a rainy day fund or spending beyond her means, but what about what she can do now to feed her kids? Sell the Coach bag or Tiffany bracelet on Ebay or at the consignment store - they’ll certainly fetch more than a few bucks. Guerrero probably has many other nice outfits, handbags, and jewelry in her closet that she could sell. Get a job, any job, whether at the fast food joint, Home Depot, or the department store to make money to buy food. With the mortgage covered and her mother at home to take care of the kids, Guerrero should be able to make enough for groceries and utilities, even making minimum wage. Demand that her estranged husband contribute to the household expenses, including paying child support. If he refuses, go to the local government agency that handles child support cases and file a complaint against him. If the husband is working, his wages can be garnished. These are just some ideas off the top of my head; I’m sure there are others. It’s easy to fall into the trap of feeling sorry for oneself when bad luck strikes, but the bottom line is that Guerrero, just like the millions of homeowners who bought or borrowed too much house, need to do what they can to help themselves first before turning to the government. Going to the food bank should be a measure of “last resort,” reserved for those people who have already exhausted every other avenue and are hanging on by a thread. Add to del.icio.us · Digg this Category: Personal Finance
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Emergency Fund To The Rescue
http://www.personalbudgettraining.com/blog/2008/04/emergency...Read on to see how this family's hardship could be avoided, but there is more to the story. As featured on CNN, Patricia Guerrero was making $70,000 a year and weeks later, with bills piling up and in need of food for her family, this middle-class mother did something she never thought she would do, she went to a food bank. What a sad, sad story. If she had a fully stocked emergency fund of 3-6 months worth of expenses set aside in a savings or money market account, she would not be in such a tight fix. Now for the rest of the story. Someone looked up Guerrero on the LA county assessor and recorder database. They found more information about Guerrero’s financial situation from public records. The almost 3,000 square foot house sits on a quarter acre lot and was built in 1948. She and her estranged husband Ray acquired the house, apparently from his parents in August 2002, at which time the debt on the property was about $157,000. Ray and Patricia took out a conventional fixed-rate first trust deed on the property in August 2002 for $202,000. Between 2002 and 2006 there were various refinancing and equity loans, but the present note from August 2006 is for $649,999. So, in the end they bought the place for a song and blew about $450,000 equity over a period of just 4 years. In CNN's effort to create more panic about the hosing market than there really is, they got scammed themselves.
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