The Struggle is Real…

“To all those Wisconsin workers who feel like they’ve been economically squeezed in the first decade of the 21st Century: It’s not your imagination.  It’s reality.” That was the lead quote from the Milwaukee Journal Sentinel on September 21st.

If you’ve been paying attention at all the last few weeks, you will know that the U.S. Census recently released its figures for 2010 and the news was very disheartening. It confirmed in real numbers what many people were feeling with their pocketbooks. The middle class has taken a big hit over the last ten years and the poor have become very, very poor. In fact, Milwaukee has remained one of the 10 most impoverished cities in America with 46.1% of children live in poverty.

According to the US Census Bureau, median household income in 2010 was at $49,445, down 8% from its peak in 1999. From 1979 through 2005, the inflation adjusted income of families in the middle class rose 21%. Over the same period, the income of the very rich, the top 100th of 1 percent of the income distribution, rose by 480 percent. The average annual income of that group rose from $4.2 million to $24.3 million. At the same time, the take home pay of the middle class eroded – payroll taxes went up, while wages remained stagnant or most often decreased. If money has felt tight for you or if you’ve struggled to keep pace with your bills and other expenses, it’s certainly not your imagination.

American demographers and economists have dubbed the bleak news “the lost decade,” because many people have lost their jobs and their homes, and the rest of us saw a dip in our wages. All at the same time that the prices of material goods – gas, clothes, groceries – increased. In fact, I went to Walgreens the other night to buy laundry detergent and they had security tags on the Tide laundry detergent. I thought, how sad things have come to this for some folks…times are so hard and money is so tight they have resorted to stealing laundry detergent. I took a video of the security tags, which you can view on the Summit Credit Union Project Money YouTube channel.

There certainly is no better time to be counseled by a financial coach through Summit Credit Union. The struggle is real and it appears that it may only be the beginning. It’s never been more important to cut back on the luxuries in life so you can pay down debt and save your very hard earned money. So don’t listen to the government when they tell you to spend to help spur the economy. Yes, we have to do our part to help the economy but it’s more important to take care of your own finances first. 

I feel lucky given the recent news that even though I have struggled financially, at this exact moment in my life, I have steady income and I can make ends meet and save. But, if I lose my job or become ill, I’m quickly headed into a downward spiral that will be very difficult to escape.  Which is why, I’m so committed to putting money into a rainy day savings fund, in addition to paying off my debt. Times are certainly challenging today but we should use it as an opportunity to rethink our priorities and if we haven’t already, to begin saving for that day we all hope will never come.  

Comments

[Kristi]

How true.