You know your kids are growing up when they ask a question like the one my daughter asked a few days ago, “Hey, dad, do you think we’ll experience a depression in your lifetime or mine?” As much as I’d like to shelter her from life’s unpleasant realities, that question deserves an honest answer.
How would you answer? Before responding, I thought of the 1930s, the Great Depression, and black-and-white photos of soup lines.
“Well, we recently experienced a worldwide Great Recession,” I explained. Thinking about our family expenses, I added, “It feels like we’re still in that recession.”
“During the 1930s,” I continued, “the effects of the Great Depression, were easily recognizable. But, we don’t see food lines today because the federal government sends food assistance directly to homes in the form of ‘food stamps.’ But tens of millions of people are struggling.”
A few days later a friend sent me a report by Byron Wien of Blackstone titled “The Ten Surprises of 2014” that includes a chart titled “Food Stamps – The Great Recession’s Soup Lines,” which illustrates the staggering growth of the program since 2005. The number of participants has nearly doubled since then to over 47 million people. I showed the report to my daughter. If she couldn’t see food lines in our town, she could see them in this chart.
Wien’s report didn’t surprise me because I had just finished analyzing our 2013 family expenses and preparing our 2014 budget. Even though we’re frugal, food was our #1 expense in 2013. At a staggering $1,200 per month for a family of six, our spending was consistent with a “low cost plan” according to the United States Department of Agriculture. Our next largest expenditures in descending order were: household supplies (mostly purchased at Wal-Mart), education, charitable donations, mortgage payments, taxes, health insurance, out-of-pocket health expenses, clothing, gasoline and utilities. Where’s savings on that list? We haven’t been able to save for years. Our checking account is a conduit to the grocery store, Wal-Mart, the gas station, and other businesses I’m thankful for.
I’m giving you a look at my personal budget because, even though I’m better off than a lot of people, my story may provide some insight into what’s happening in America: It’s getting increasingly difficult to maintain a simple family lifestyle. What’s the answer to this malaise?
A good starting point is to understand financial reality on two levels—family budgets and the U.S. economy.
CNN's Lemon Battles Rapper Over Ferguson--Let's "World Run By White Supremacy" Comment Slide | Greg Hengler