“The less help you have as an adult starting out, the harder you have to work to make the next geographic, career and economic step up.”

Ron Lieber, New York Times “Your Money” Columnist

I often wonder what trajectory my life would have taken if I’d had more of a financial cushion, someone I could turn to for just a bit of financial help or even wise counsel if I made a bad decision, or I didn’t have to work 25 hours/week during college and take loans for law school, for example. If I felt burned out and wanted to take even a short break to recharge, I couldn’t.

Some of the stories I’ve heard from friends about the financial gifts they’ve received from relatives shock me—a wealthy aunt paying for a graduate school education, grandparents setting up a trust fund so their adored grandchildren could attend college and emerge debt-free, receiving help with a down-payment on a first home. My former husband and I were fortunate to receive a small amount of money when my mother’s U.S. savings bonds matured, and she chose to split the proceeds between my sister and me while she was still alive (I did use that money as a down payment on my first home). But following a divorce, and some of the less than stellar choices I made after that (like borrowing from my home), left me in a poor financial situation, at best.

Sometimes you read something or catch a snippet of news that changes the way you think about your place in the world, and reading an article titled “From Parents, a Living Inheritance”, by Ron Lieber, author of The New York Times “Your Money” column, did that for me. I read it in 2012 when it was first published and since then, it has guided my thinking on issues of poverty, struggle, success and money.

I was raised in a town where few people were wealthy, and I didn’t know that parents could, or did, provide that kind of support. And it wasn’t until years after I read this article that I realized it was our government that should lend a helping hand when things got tough for those Americans who had nowhere else to turn.

Of course, we do have a social safety net in this country, but the requirements to qualify for SNAP (food stamps), heating and cooling assistance and medical care are left to each state to calculate based on federal poverty guidelines. Typically though, the income threshold is so low to receive these benefits, particularly for single people with no children, that you must earn well below the poverty level annually to qualify for any help. For example, in Ohio, the maximum amount a single person can earn a year and qualify for medicaid is $17,131, with a maximum total asset amount of $2,000. According to the Federal Poverty Guidelines for 2021, “200% of the Federal Poverty Line [or $25,760 for one person] is typically considered the baseline income needed for self-sufficiency”.

As Lieber said:

“Some parents help their adult children financially, while others cannot or do not…If you lack that help, any and all mistakes (and there will be plenty) often have much bigger consequences. And the lack of any family help can have a compounding effect on the millions of people who have negative net worths well into adulthood thanks to their student loan debt.”

I think it was the part about your mistakes will “have much bigger consequences” if you don’t have a financial cushion to land on that startled me, because I knew I had made mistakes and it was just a matter of time before it caught up with me.

In this same Times piece, Lieber mentions an essay he’d read, “How to Succeed in Journalism when You Can’t Afford an Internship” written by a Canadian journalist, Alexandra Kimball, about her attempt to break into journalism with $50,000 of student debt and no financial help from family. Apparently, a young journalist is expected to work months of unpaid internships in the hopes of landing a paying job, which Kimball could not afford to do. That is until she received an unexpected inheritance from a relative, which changed everything for her career.

“…but my day jobs paid so little that, more often than not, my free hours had to go to remunerative work – more of the same. This routine produced such a cloud of emotional exhaustion that a whole season could pass before I noticed that I hadn't written a word.”

When you work low paying jobs just to scrape by, of course it produces “a cloud of emotional exhaustion”, which, as I mentioned in a previous post, does not leave you the energy needed to say, eagerly jump on an opportunity to pursue your dreams should one arise.

Here’s an interview with Alexandra Kimball where she discusses that essay and the impact her small inheritance had on her ability to pursue a career in journalism:

https://therumpus.net/2012/10/the-rumpus-interview-with-alexandra-kimball/

I believe that there are people who “make it” and are financially successful in their chosen careers despite the odds stacked against them, and with little monetary support from parents or others. But I think there are far fewer of these success stories than our American myth of “you can do anything if you work hard enough” allows us to believe.

I’d love to hear what you think of these articles and what you think is most essential to monetary success.

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