The Simple Dollar Weekly Roundup: Parent-Teacher Conferences Edition

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This week, Sarah and I are going to our first parent-teacher conference, obviously regarding our oldest child.

He brought home his first report card, which showed pretty solid progress in almost every area. He has a few little things to work on, but it mostly seems good.

I’ve got a pretty good sense as to what I’ll hear at this conference, much as I’ve had a good sense as to what our children’s preschool teachers would say about our kids before they even said it.

Too Frugal For Your Own Good There’s a giant difference between frugal and cheap, which is the area Watson is really looking at here. (@ watson inc.)

give up hope (it’s a good thing to do. really.) Hope is mostly a bad thing because it’s a crutch that prevents you from taking action or making decisions. (@ white hot truth)

What Are the Differences Between the Rich and the Poor? I think the biggest difference is unexpected events. Another huge difference is brain chemistry. While the behaviors we control do play a pretty big part, both of those things have a giant impact and our ability to alter them is limited. (@ get rich slowly)

5 Things That Are Destroying Your Success I agree with all of these, and I think almost all of them can be corrected with better choices in the moment. (@ pick the brain)

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18 thoughts on “The Simple Dollar Weekly Roundup: Parent-Teacher Conferences Edition

  1. On the controversial GRS post distinguishing traits of the rich versus the poor, Trent writes “I think the biggest difference is unexpected events. ”

    It certainly can impact whether someone is poor or rich if they have some accident or get (someone) pregnant and have to drop out of school or something, but I don’t think it’s the biggest difference.

    To me the biggest difference is circumstance of who your parents are. Not whether they are rich or poor so much–though being born into wealthy parents certainly helps–but if they are loving, supportive, interested in their children’s schooling and provide a stable environment for their kids. If you are lucky enough to be born into such a family, whether they are poor, middle class or rich, I think in Western soceity they have a real chance to grow up into productive adults who exceed their parent’s standard of living.

    That’s my biggest difference, anyway. Unexpected events is probably way down on the list to me. Rich or poor, we all have those things happen to us, and it doesn’t often change our standard of living drastically when it happens.

  2. #1 Adam – I disagree with your last statement. The #1 reason for bankruptcy filings & homelessness by far is due to exorbitant medical bills resulting from a major accident or illness. Even if you have decent health insurance, a 20% copay can add up in a hurry if you’re hospitalized.

  3. Ahh valleycat, I guess I am coming from a Canadian perspective and I apologize..universal coverage covered by our higher personal tax rates can cloud one’s perspective on bankruptcy due to medical bills!

  4. #2 Valleycat1

    The medical bills causing bankruptcy thing is overblown. How many of those people were already in trouble before the medical issue happened? If you get a $20K medical bill but already have $80K in credit card debt, and then file bankruptcy, what really did you in?

    If you had no other debt, and then the medical bill should be cited for the bankruptcy. Otherwise….

  5. Personally, I preferred Trent’s take on poor vs. rich in an earlier article(Are poor people lazy?). Poor people tend to have less time and less opportunities. Also poor people must be more strict with their money. If they forget to pack a lunch, that $5 that they use to get something to eat can be far more damaging to their finances than someone who has more discretionary spending. To my mind, poor people have _less_ of everything: time, opportunities, AND ability to make mistakes. It can be a rather vicious circle, which becomes harder to break out from, the more responsibilities you have.

  6. #4 Dee: This is just the first result I found when searching for ‘leading cause of bankruptcy in America’, from Business Week in 2009: “Study Links Medical Costs and Personal Bankruptcy:
    Harvard researchers say 62% of all personal bankruptcies in the U.S. in 2007 were caused by health problems—and 78% of those filers had insurance.”

    And from other sources, most people report they would have trouble coming up with $1K in cash in an emergency, I’d say $20K in medical bills (for a long hospital stay, that would be a real lowball figure since copays are usually around 20%). Plus a lot of people would lose their job, or at least their income for the duration, if they’re seriously injured.

  7. Bankruptcy rates are a huge red herring here. Bankruptcy does not equal poor. Plenty of wealthy people have declared bankruptcy (before or after their wealth accumulation).

  8. Yes, but the discussion isn’t about the causes of bankruptcy or who files for bankruptcy. It’s about the impact the unexpected can have on finances, and with medical expenses being one of the (major) unexpected and bankruptcy being (one) of the possible outcomes. As are loss of income due to inability to work, as valleycat1 mentions.

  9. From the article mentioned at #7 – showing rising rate of bankruptcy – doesn’t show any exclusion of the wealthy, so it’s even more alarming. And, #4 Dee, I correct myself as the average medical bill reported in bankruptcy filings is around $20K.

    Article: Medical problems caused 62% of all personal bankruptcies filed in the U.S. in 2007, according to a study by Harvard researchers. And in a finding that surprised even the researchers, 78% of those filers had medical insurance at the start of their illness, including 60.3% who had private coverage, not Medicare or Medicaid.

    Medically related bankruptcies have been rising steadily for decades. In 1981, only 8% of families filing for bankruptcy cited a serious medical problem as the reason, while a 2001 study of bankruptcies in five states by the same researchers found that illness or medical bills contributed to 50% of all filings. This newest, nationwide study, conducted before the start of the current recession by Drs. David Himmelstein and Steffie Woolhandler of Harvard Medical School, Elizabeth Warren of Harvard Law School, and Deborah Thorne, a sociology professor at Ohio University, found that the filers were for the most part solidly middle class before medical disaster hit. Two-thirds owned their home and three-fifths had gone to college

  10. Jackie- I can see some logic in this…but not as the article intended. Much like our corporations are set up to be conscienceless one goal entities, capitalism can’t help but favor the sociopath. That is why when some stories come out, people shake their heads and say “How can they sleep at night?” Easy- no sense of right or wrong, only winning or losing, success or failure. And our media culture tends to glorify gluttony anyway.

    However, that is only my opinion. I also think many people (myself included) do not equate success with having money- they define it in other terms. I read an interesting reader mailbag once (not here) called “Why aren’t all Mensans rich?” They are a competitive bunch, but they do not necessarily compete within the small paradigms of success that immediately come to mind. So they may be entirely successful, just not by provincial expectations.

  11. As a parent, I attended every one of those. As a teacher, I enjoy talking to the parents about the class. Spend the time when they are young and you won’t have any problems later.

  12. @ Tracy @valleycat1

    I’m not disputing that unexpected medical expenses can be very expensive; I’m just saying that if people didn’t have other debt, they would be in better shape to handle those expenses and wouldn’t have to file bankruptcy.

    So maybe the medical expenses are the last straw, but they aren’t really the biggest factor in the financial problem that family has.

  13. @Dee: How common do you think that is, that a family will have $80K in credit-card debt and be coasting along just fine, and then will be pushed over the edge by a $20K medical debt?

    The number of people who have $80K in credit-card debt in the first place has got to be pretty small, I’d think.

  14. @Johanna

    I doubt many people have that much debt. My basic point was that many people are in a poor financial position before the medical debt comes, and the debt pushes them over the edge. So I’d say categorizing that as a medical debt bankruptcy isn’t accurately reflecting why the bankruptcy happened.

    Like a married couple that has been fighting for years, and then one night has a big blow up over (X) and then saying they got divorced because of (X). It wasn’t just that last fight. It was that big fight plus everything that had been going on for years.

  15. Um, can I echo Jackie #10:

    BRAIN CHEMISTRY??!!!!

    I used to be a regular TSD reader. Every couple of months I drop in again…. and read something like that, which reminds me why I left!!!

  16. “My basic point was that many people are in a poor financial position before the medical debt comes, and the debt pushes them over the edge. So I’d say categorizing that as a medical debt bankruptcy isn’t accurately reflecting why the bankruptcy happened.”

    Sure, but that exact same statement could be applied to somebody with no debt but no savings who are living paycheck to paycheck. They are in a poor financial position before the debt comes and the debt pushes them over the edge. But it’s still the debt that *causes* the push over the edge – and it’s why medical debt is the biggest cause. Because if it hadn’t happened, they would still be ‘making ends meet’.

    I don’t think the divorce comparison is apt.

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