Poverty and Priorities

When I was growing up in what I now know was a less than desirable neighborhood in Los Angeles, my parents had money. Not a lot of money, but enough to make it so my brothers and I couldn’t get lunch tickets, which were reserved for students from families of lower income. I didn’t know that and I was jealous that I had to pay for lunch while other students got a free lunch after submitting a yellow ticket. It’s no fun being an outsider.

My brothers and I ran to the front door when we heard a truck double park in front of our house. That meant we were getting a package! This happened at least once a week. My mother ordered clothes through the mail for my father. What a luxury, to turn the pages of a catalog and place an order without ever trying the clothes on! What if the clothes didn’t fit?

My parents purchased a few musical instruments. I remember my father owned an acoustic guitar, an electric guitar, and an amplifier, but he never took lessons. Like many Filipino families, we had a piano in the house that no one knew how to play. I took piano lessons for a couple of months, but not enough to justify keeping a piano in the house.

In the beginning there were six of us: my parents, my two brothers and me, and my maternal grandmother. Living with my grandmother was awesome! She stayed home all day and cooked while watching her soaps on ABC, then picked my brothers and me up from elementary school. As a family, we appreciated this. Financially, this system worked well; the cost of housing my grandmother was severely outweighed by the benefits she brought to the household.

Then my mother’s sister came to live with us. She was newly divorced, with an infant. My aunt required more than my grandmother did, so expenses to help her find work (such as a car, clothes, etc.) were realized. This also meant two more bodies in our three-bedroom house. If I’m doing a decent job describing how I lived while growing up, then you know the headcount went from six to eight with the addition of my aunt and cousin.

Then my mother’s brother came to live with us. Like my aunt, my uncle was willing and able to work, so some money was spent to get him going with a car, clothes, etc. That puts the headcount at nine in the same three-bedroom house. The shrinking amount of living space wasn’t important when I was young, and might have been permissible if that was the only consequence of my parents supporting more and more family members.

Fast forward to my senior year in high school, when I spent the income from my minimum-wage job on a used car and auto insurance. Insurance rates for 17-year-old boys are sky high, so I didn’t have much money left. I resented my aunt and uncle because my parents got them cars with no strings attached and I spent senior year rushing to work during my lunch hour to earn money for the independence that came with driving.

Shortly after high school, my parents filed bankruptcy. The details are hazy, so I cannot pinpoint the exact year, but I was angry about our socioeconomic situation. I figured that my parents wouldn’t be in financial trouble if my aunt and uncle never came to live with us. It didn’t help that this was in the late 1990’s, a period of abundance for many Americans, yet we were struggling.

It wasn’t until my mid-twenties that I considered the possibility that my aunt and uncle should not be blamed. Anyone in need would have acted the way they did, staying as long as possible because it was more comfortable than any other situation, and not considering leaving until independence was reached. Maybe that’s why I’m angry. Independence takes years, decades even, and I was cut off before I was 10 years old.

That’s where my parents went wrong. Many cultures take family in and I understand and support that, but to help siblings at the expense of one’s children is inappropriate. Let’s call it what it is: neglect. My parents failed to find the balance between helping my mother’s siblings and raising their own children.

I’m not mad that I currently pay several hundred dollars on my student loans each month, but could I be paying less if my parents diligently put money in a college fund for us three boys before they decided to support my aunt and uncle? Absolutely.

I know this because my parents made a decent living. I never envied other students in school that had stay-at-home moms or nicer cars or anything else that comes with families with money, but I wanted what we had. My parents came to the United States in the 1970’s with undergraduate degrees and found white collar work shortly after they arrived. They easily took home a middle-class salary.

Here’s what I’ve learned from this:

• First, a financial education is important. My parents were spending, not saving or investing, and I honestly believe they would have filed bankruptcy even if my aunt and uncle never came to live with us.

• Second, prioritize. I don’t care if my parents spent $5K a year gambling, as long as they had money: for a tutor if one of their kids was struggling with a subject in school, to subsidize an SAT prep course, etc.

• Third, learn how to say, “No.” Each of my parents is one of 10 children, which means there could have been 16 more aunts/uncles in our three-bedroom house. When does it end?

• Fourth, set boundaries. If you’re going to let someone live with you, discuss how long the stay should be, and how much rent, no matter how little, should be paid each month.

What is your take on the situation? What do you recommend?

About Gerrard Panahon

Finance expert and host Gerrard Panahon comments on all things money. Liberal. MBA. http://www.youtube.com/gerrardpanahon
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