Last year ABC 20/20 produced a show “My Reality: Hidden America” that looked at working Americans and the realities they face in making ends meet. The interviewees included firefighter/paramedic Chris Smith who works in three different towns and spends up to 104 hours a week at work to make ends meet. He slept in his home for three nights in February 2017.  My Reality (video): A Firefighter searches for time. A 30% jump in his health insurance premium and a flooded backyard wiped out the family budget.

Greg Jakubowski sent me the video and pointed out that many career firefighters are in the same position as Chris, having to work excessive hours to make ends meet. This situation may not affect the 15% of career firefighters working in large, unionized fire departments with 50+ years of legacy. It does affect firefighters and paramedics working in small-town, rural-suburban and crumbling communities. The pay is lower, the size of crews are smaller but the emergency service workload is increasing.

The 1980 Middle-Class Pathway No Longer Exists

Your parents (or grandparents) were able to work one job and provide a middle-class life for their family. It will not work for you. Here are four factors:

Stagnant purchasing power:  Drew Desilver, writing for the Pew Research Center, points out that while our paychecks are bigger, our purchasing power has hardly budged:

After adjusting for inflation, however, today’s average hourly wage has just about the same purchasing power it did in 1978, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today.

Slow recovery from recent recessions: Local government has not returned to the financial health it had in the late 1990’s. The recession of 2001 and the “Great Recession” of 2007-2009 were different than earlier recessions. The decline in local tax revenue was steep in both periods and the recovery has been slower than any earlier recession. The Urban Institute pointed out that: “Even though 42 states had recovered their nominal 2008 tax revenue levels by 2013, only 24 experienced real revenue growth.”

In the past couple of months, I have posted a dozen stories of small cities and towns demoting fire officers, closing fire companies and increasing the employee’s contribution to health and retirement plans as municipalities struggle to stay within their budgets. The most dramatic example was Garden City, Long Island that terminated all 11 career firefighters last July.

More personal debt: Student tuition loans are the fastest growing segment of household debt, increasing by almost 157% since 2007 (Griffin). Auto loan debt has increased by over 50% since ’07. I can afford to get the heated seats and satellite radio if I buy the deluxe version of the crew cab pickup. With a 60 month loan, it will only cost $78.99 more per month for the deluxe.

Working more hours has a family impact: What is the value of working 100+ hours a week if you never are at home? Chris Smith talks of wanting to have more time with his young children. I did not have kids and recall a sentinel conversation with my wife. I was working shift work, going to graduate school on Tuesday/Thursday nights and every other Saturday. I was also working as a part-time college/state fire instructor. I started my last graduate school class and the divorce process at the same time.

Get Educated

Your financial success comes with understanding how income, expenses, and investments work.  Here are some suggested references:

Firefighters First Credit Union: Financial Literacy.  “Our Mission is to Improve the Financial Lives of Our Fire Family.”

We started as Los Angeles Firemen’s Credit Union by a group of Los Angeles city firefighters during the height of the Great Depression. The Credit Union was founded on November 16, 1935 and was originally located in the upstairs of Engine Company No. 28 on Figueroa Street in downtown Los Angeles.

Firefighters First Credit Union is committed to providing its members with exceptional financial products and services, along with quality service. Attention to members’ needs and expectations has enabled us to grow from just over 800 members the first year, to over 43,000 members today (490+ fire departments), with current assets over $1.3 Billion.

Badges and Budgets: Jason Hoschouer is a California based motor officer that you may know through his online persona as Motorcop.  He used the concepts of Dave Ramsey’s Financial Peace University (FPU) to change his financial situation and wrote this book describing his experience.

IN 2009, I MADE MORE THAN $ 100,000. Mind you, that included an average of about 40
 hours of overtime a month. Sounds great, right? The problem? I couldn’t afford to pay a $300 electric bill. My tax guy tells me I had a great year, yet I haven’t a blessed clue where in the blue hell all that money went. 
I had a wife, a daughter, and another kid on the way in August 2009.

I felt like a complete failure. How was I supposed to support my growing family when
 I couldn’t make $100K work? And exactly why couldn’t I pay a $300 bill making that kind of
 money?

I found the other side. And it’s freaking glorious. In two days shy of 28 months, Katie and
 I paid off $77,232.88 in debt on just my income. We are now (with the exception of our mortgage) debt-free! We hit that milestone in December 2011.

Edelman Financial Services: Ric Edelman is a Washington DC-based financial advisor that writes books that clearly describes financial issues and actions you should consider. The Truth About Money has gone to a 4th edition (2010), I found his The Truth About Retirement Plans and IRAs (2014) valuable as I was revising my SEP-IRA due to my post-retirement endeavors. His latest, The Truth About Your Future: The Money Guide You Need Now, Later, and Much Later (2017) looks at how science and technology are requiring you to make three financial plans: now. later and much later due to the changes as people remain productive in their later lives.

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Desilver, Drew (2018 August 7) For most U.S. workers, real wages have barely budged in decades. Pew Research Center.

Griffin, Riley (2018 October 17) The Student Loan Debt Crisis Is About to Get Worse: The next generation of graduates will include more borrowers who may never be able to repay. Bloomberg News.

Featured image: Firefighter Money Clip from WDS Collectibles