Monday, June 4, 2007

High gas prices killing you? Buy a prom dress!

It seems like every year, as summer comes and gas prices go up, we end up with several articles about how gas prices are busting family's budgets.

Single mom Esther Guzman is used to juggling her family finances. But lately, it's gotten harder to make ends meet.

So says the article, with a picture of Ms Guzman climbing into an enormous vehicle. But who can blame her? She has 4 kids and makes $11/hr with $400/mo in child support (meaning her ex is probably not making much more than she is). Having 4 kids probably wasn't the smartest idea in the world, but its a little late for that. But not too late to continue a cycle of poor spending and backwards priorities.

Recently, to help pay for senior pictures and a prom dress for her 18-year-old daughter, Esther Bonilla, Guzman was forced to pay less than what she owed for utilities.

You read that right. She didn't pay her utility bill because she bought a prom dress for her daughter. Apparently a nice prom dress is more important than having electricity.

Now my concern is, am I going to be able to cover the utility bill or the rent?" she says. "I can't cover all my bills; I really can't.

Of course you can't. But don't blame high gas prices. Yes, the prices are up, but you can't pay your utility bills because you bought a prom dress. Or take the "facilities assistant" who was driving 66 miles each way for a job that paid $7.25 an hour.

"I'm spending almost half my paycheck every two weeks on gas," Davison says.

No kidding! You make barely minimum wage, a wage that you can get just about anywhere (she likely has around 20-30 retail stores within 5 miles of her home that would offer hourly wage like that), yet you choose to commute 132 miles a day. She also goes to alcoholics anonymous meetings, but I suspect rather than attend a local chapter, she drives to another city.

Poorer families tend to live in central cities, but the strongest job growth in recent years has been in the suburbs, according to UCLA professor Matthew Kahn. From 1994 to 2000, the latest data available, there was a 10% increase in jobs in ZIP codes within five miles of city centers in the USA. In that same period, there was a 23% jump in jobs more than five miles but less than 25 miles from city centers, Kahn says.

Agreed. But if you are low income minimum wage, there are jobs everywhere. Go apply at Target; you need no education, start off at $7/hr, they are everywhere in suburbs AND inner city and if you live in the city, which the article says most low income families do, public transportation IS available.

"Those commutes aren't really well-facilitated by public transit," Raphael says. "Owning a car can actually be quite important."

Well yes, when you choose to drive 130 miles a day for no apparent reason.

Tyrone Vincent of Donaldsonville, La., estimates his 1991 Cadillac DeVille gets about 16 miles a gallon. The 48-year-old disabled veteran, who lives in a FEMA-provided trailer, usually makes the 120-mile round trip to New Orleans about three times a week to see family and to volunteer. But the trip has become too expensive, and Vincent, who lives on $2,400 a month he gets from the government, doesn't have the money to buy a new, more fuel-efficient car. He's had to cut back on trips to New Orleans.

What I wouldn't give to go on a trip 3 times a week. 16 miles to the gallon on a 1991 Cadillac is pretty poor. Can't buy a new, more fuel-efficient car? Why not buy a 1991 GEO METRO. It gets 40mpg and you wouldn't have any more 'repair' costs than the Cadillac, since they are the same age and in fact the Metro is probably a heck of a lot cheaper to maintain. You could probably sell the Caddy for the same cost of the Metro. Skip a week of trips to New Orleans and you'll have enough saved up for the taxes right there. Why do you have to buy a new car to get more efficiency?

At the end we finally meet someone who is struggling with gas prices, a mother of 3 who has cut back all she can and is facing medical bills.

The point? Yes, gas prices are up, but when you are purposely avoiding paying bills to buy prom dresses, take trips out of town every other day in a gas guzzler, and needlessly commute 150 miles a day for a minimum wage job, why is changing your spending/driving habits such a ridiculous suggestion?


simateoako said...

Love your analysis. I've often wondered why people complain about gas prices when there are easy things they can do to save the very money they are wasting.

Thanks for the straight talk.

Matt Timion

dong said...

I agree with all the points, but I would also cut some these folk a little slack. It's easy for us on our high horse to criticize, we think about this kind of stuff all the time, and blog about it, but for many people they just don't think that way. Not that they can't, and shouldn't but they haven't. Simple budgeting is missing from most people's education.

Jim said...

I don't offer nearly as much pity as the media will towards some people. They know what the problem is but justify (or lie to themselves) in their head why they didn't make the right decision. How does one decide between a need and a want? Multiply the cost by 3x the cost of it and if you still truly need it, you'll have to pay that amount otherwise it is probably a want.

Priorities have been confused here because the daughter 'needs' a prom dress and they're trying to decide if they 'want' to pay the electric or rent. Answers should be simple. I think blaming gas prices is just a way to justify how they're wasting money. The distance being driven for a job is beyond excessive which is why the money is limited.

I think the bigger problem here is they are not looking at the total costs involved to work that far away from home. She makes $11 an hour 66 miles away, how much is she left with after gas and car maintenance from driving so much? A local job may not pay $11 an hour but the advantage would be buying gas less frequent and keeping more money.

The guy with the car with very poor gas mileage, he is making poor choices and loosely justifies them. If you convince yourself of something long enough, you start to believe it.

Follow-up on dong's post about criticism. It is not a million dollar question to figure out what priorities must be met. Food, shelter, electricity, water, the basics along with a job to pay for them is the minimal requirement. Don't confuse proper education regarding good money management with common sense.

Kathryn said...

Perhaps there is another aspect to the prom dress issue....the perceived "need" to have one's children participate in the American Dream. I agree that electricity is a need, but for a mother to tell a daughter that she cannot go to the prom or must go dressed in "rags"...turns the mother into the evil stepmother of Cinderella fame. The temptation is great to play the Fairy Godmother instead. For some people, celebrating rites of passage really is a "need."

The answer, of course, was to plan ahead and have the daughter (and maybe mother) work together to save up enough money for the dress, which would have made it even more special.

But some people still have a lot to learn. (Don't we all?)