I’ve been keeping fairly quiet about my opinions of the current situation in which we find ourselves. I’ve been reading the exhortations and judgemental posts of many of my friends trying to convince everyone else to stay home. It is pretty easy for those with salaried positions with plenty of sick/vacation leave and/or the ability to work from home to stay home. For those who have a good amount of savings, this is also not much of a problem.
For those of us not in any of those positions, however, staying The F*ck Home, as some are putting it, is not really an option. Since we don’t know how long this will last and what, if any, assistance we are going to receive from the government or other sources, cutting our income off entirely is going to have some serious consequences. Most Americans don’t have much in the way of savings and live essentially paycheck to paycheck.
That is where I currently find myself. All of my current income goes away if I can’t go out of the house, and my meager savings won’t last very long without any cash flow and/or taking on more debt. It’s tough to admit this to people. I had hoped I would be a lot closer to true financial security at this point in my life. When most of our office was axed in January 2019, I thought I would find something better than the patchwork of non-salaried employment, gig economy, and freelance work that has been the norm since that time.
Until recently, my income consisted of some freelance work (there is none currently in the hopper that is not already completed), part-time teaching at MATC, working on-site for one of my original freelance clients in a W2 capacity, and driving part-time for Lyft. All of my current classes were cancelled or rescheduled (and will probably still be cancelled), which is about a $2K after tax loss over the next six weeks. I don’t get paid if those classes never run. My Lyft income has already dropped about 90% over the past week, allowing me to make just enough to cover gas and food each day. If I stop driving entirely, that small amount goes away. If I can’t go out to my client’s office to work on some projects he has for me, that eliminates all of my income.
So let’s engage in a hypothetical. Let’s say a shelter in place order comes down sometime this week with which I comply. If that were to happen, I would have about $900 in outstanding (after tax and child support) income rolling in between now and April 2. I have about $1000 in cash that is liquid enough to access immediately after putting $3500 into car maintenance since mid-December. Most of that could have waited if I had known this was coming. Some of that was paid in cash, some on credit cards. Thus, without taking on more credit card debt, cashing out 401ks, etc., I would have $1900 to last me for however long the inability to earn money lasts.
Now let’s look at obligations. When I add up my current fixed monthly obligations (not counting gas and food), I arrive at almost exactly $1900, depending on if and when my housemates give me money for their share of internet service. My normal monthly order of expenses is my rent (a comic $415), Adobe CC subscription, Quickbooks Self-Employed subscription, backup service subscription, Netflix, cell phone, car wash subscription, health club membership, internet service, Amazon Prime, student loan ($245), auto loan payment, car insurance payment, child support, and $150 in credit card minimum payments scattered about. The discretionary items in that list add up to at most $150, assuming I’m a sucker and pay all these bills on time and in full.
We are at the moment where this month’s car payment and insurance have not hit yet, so the clock starts tomorrow in this hypothetical. If I find no other way to make money but still pay all my bills, I will literally be out of money on April 22 at the latest. Of course this assumes I only eat what is left in the house until that time. That is theoretically possible, since I have a nice stash of ramen noodles. I have enough gas in the car to drive someplace nice to fish, kayak, or hike perhaps once a week for a month. Beyond that, my exercise would entail walking around my block. A lot. I could probably throw on my wetsuit to go swimming in one of the lakes when they warm up just a little.
After April 22, I can start running up credit card debt. I currently have access to about $5K before I hit limits on two cards with high interest rates. That would buy me another two months when factoring in the increased minimum monthly payments. However, if things didn’t return roughly to normal within three months, I’d be filing for bankruptcy pretty quickly thereafter anyway.
If I comply with a shelter in place, what are some things that might help me survive beyond a month with no debt or three months running up my credit card balances? Let’s look at some of the proposals out there:
- There is talk about a stimulus check of somewhere between $1K and $2K. Luckily, the math here is easy. 1K buys me a couple weeks, while 2K buys me about a month, assuming I do pare back the few discretionary items. However, those checks will be heavily inflationary, so who knows what kind of buying power they will actually have. It would take $5k to $10k per household to make any real dent and allow people to truly stay at home.
- There is talk about a 60 day moratorium on student loan payments, so that would buy me about a week total over 60 days. I just made my most recent payment the day that possibility was announced. Awesome.
- Since I only rent, it looks like I won’t get bailed out with a 1 year moratorium on mortgage payments that has been floated. My landlady would probably pass as much of that on to us as possible, but who knows? I don’t want her to suffer too much at my expense.
- They are talking about moratoriums on evictions, utility shut-offs for non-payment, etc. What good does that really do except ease some physical hardship while it is still cold outside? If the bills not paid during that time aren’t discharged or otherwise forgiven, how helpful is it for everyone to add to their obligations just so they can be evicted and/or declare bankruptcy in 6 months?
- Supposedly I might be eligible for unemployment under some of the proposals I’ve seen out there. I collected some last year after our office got canned, so normally I wouldn’t be eligible. But who knows? The talk is for it to be boosted by $700 per week all else equal. Partaaay!
I would really like to stop driving for Lyft right now, and I would love to just sit at home and go out for some fishing, hiking, and kayaking here and there while properly socially distanced. I really would. I get it. I understand all of the science behind this. I’ve been studying and reading about pandemics and epidemiology for years. But I really don’t trust our leadership to really help people like me who really need helping as part of the bargain for us to stay home. It looks like most of the help is going to go to people and companies that really only need it because most of us aren’t going to have any money to spend.
This was all done bass ackwards. Announcing closures and other preventative measures should have come alongside or after announcements of how to prevent the rest of us from falling to economic ruin. At this point, the real enemy is time. Whatever they are going to do, it has to be done before any more shelter in place orders go out.
Otherwise, I’ll be out there driving (looks like I might be doing Eat Street now, so that might be less risky and more socially beneficial) my constantly wiped-down car, daring the almost non-existent law enforcement presence to arrest me. At least in jail, I’ll get three squares per day.
Do you all get it now?
P.S. if this all comes to fruition, I know I have relatives and friends that wouldn’t let me fall too far. But how many other people are in similar situations but without the support network I have? It’s the folks who aren’t as fortunate that I am truly worried about.