November 15, 2010

Downsized : Episode #2

Last week I took a first look at the "Downsized" program on WE television network.   The show follows the Bruce family.   The family has gone through recent foreclosure and losing a lucrative contracting business.   Its typical reality TV so its more about drama than actual reality.

I watched the 2nd episode this past weekend as well.  Heres some notes and my impression from the second show.

House Shopping

They spent the first half of the show mostly shopping for a new rental house.   Right now they are paying $1695 for their house which is almost 3000 sq. ft.   That is a big house but they do have 7 kids for a total of 9 people.  All the same, they can't seem to afford their rent so they made the right decision to look for something cheaper.  They showed a few houses that they looked at.  One was $1300 a month and about 2100 sq. ft, but deemed too small for the family.   Another house was $1200 and the right size, but the Bruce's decided too look around.   Unfortunately by the time they decided to go with the house it had been rented to someone else.   They looked at one other house that was about $1000 a month but 45 minutes from Anthem where Laura works and it too was small.   Another problem with moving rental houses would be that they would have to come up with a deposit and possibly 1st and last months rent.  The exact amounts varied but in any case they'd have to come up with a sizable amount of cash up front which they don't really have.  In the end they seemed to have decided to stay where they were.   Frankly the family seemed a little picky about the houses.  I heard "too small" a lot.   Yes the homes in question were not large for a family of 9 but you are broke.   This is life.  

Some Kids do Work

The 16 year old daughter works as a waitress.   She makes about $250 per paycheck.  Two of the boys also work in a concession stand for a community baseball park.   One boy said they get $20 for 4 hours work, which doesn't make too much sense to me since its under minimum wage.   So at least 3 of the 6 teenage kids do have some form of work.    It sounded like the money was supposed to be used by the kids for their own needs and wants.

Wife has M.S.

They revealed that the wife Laura has multiple sclerosis (M.S.).   Not a lot to say about that.  She did say that she is currently healthy.  

The Mercedes

Laura does have a Mercedes as I thought.   However its 15 years old and it was a gift from her father.   The financial planner they talked to at the end of the show referred to it being worth about $1500.   I looked up Mercedes cars from 1995 on Edmunds and a '95 C-class is worth roughly $1700 if sold by a private individual.    Skimming the local Craigslist and Autotrader here it seems more like 90's Mercedes sell for $3000 to $5000 unless they have damage or are in need of repair.  She also has some emotional attachment to it because it belonged to her mother.   In any case the car is older and not worth a lot.   So its not quite "life styles of the rich and famous" and actually closer to driving a beater (not exactly a beater but closer).  

Budget and Financial Planner

Dean Wegner
At the end of the program Todd and Laura met with a financial planner named Dean Wegner.   From his website it seems more like Dean is a mortgage broker by trade but it does say he's a certified consumer credit counselor.   Dean gave the Bruce's pretty good advice and guidance in my opinion.  He talked to them about their budget and gave some recommendations.    They definitely need someone to talk some sense into them about their budget and spending.

Family Income
They said that Todd currently makes about $2000 a month gross but he's not setting aside money for taxes (no surprise).   Dean encouraged Todd to get more work.   (seems little easier said than done)   Laura makes about $40,000 a year at work as a teacher, I think she said it was $39,300 specifically if I recall right.     Combined the financial adviser said they have $4700 income per month which I'd assume is after taxes.

Side note:   Laura again took an opportunity to whine about her teacher salary which she called "pitiful" in the first episode.   This time she said that she was getting paid less than they got in 1970.   (I think she said 1970, but she might have said in the 70's.)   That might be true if you adjusted the wages for inflation. According to this old Dept. of Education report, teachers in 1970-1971 had a salary range of around $7000 to $11,000.   That $7000 starting salary is worth about $39,400 in todays dollars if you adjust to inflation.

Lots of Spending

They are spending $6550 a month.   Yes thats right.   They are spending about $1850 more each month than they are bringing in.   I don't know where that extra money is coming from.   They did say that they borrowed $3000 from their kids.   

What are they spending all that money on??   Specific items in the budget that they mentioned dollar amounts for were:
$500 for eating out
$145 for cheer leading for the 10 year old daughter
$200 for entertainment
$67 for cable TV

Sigh.  So this broke family who declared bankruptcy a year ago, who gets food stamps and can't pay their rent is spending $500 a month eating out and $145 a month on cheerleading for a 10 year old.

They also talked about Laura buying expensive coffee.   They didn't go into details of what kind of coffee she bought or where and they didn't say how much she spent.   Laura explained that it helped her with getting tired from her M.S.   OK so thats  reasonable we all like caffeine but maybe she could cut back on that spending going with cheaper brands.  They also discussed cutting their Internet bill and their cell phone bill but they didn't say how much they were currently spending on those.    We know they spend $1700 a month on rent and the other items mentioned specifically add up to around $900 a month.   That still leaves around $3900 a month of spending unaccounted for.


After the first episode I had some opinions on what they should do:

Sell the cars
Downgrade the home
Cut unnecessary spending
Kids could work

I don't know if selling the cars would really help much given the value of the Mercedes.   The van looks expensive so they could probably trade that in for something cheaper but they still need a large vehicle for their large family.

They looked at downgrading but didn't do it.   I think they should still look more and keep that as a goal.

Some of the kids do work which is fine.

I do think right now that their primary objective should be to cut their spending.   It is crazy to spend $500 eating out and $145 a month on cheerleading if you can't pay your rent.    They really need to get realistic on their spending and cut out the "want" items so they can pay rent and feed themselves.    We don't even know what $4000 of their spending is going towards.   There are probably many other spots they could cut spending.

Photo by michieldijcks (not the car in question, but for illustrative purposes only)
Photo of Dean Wegner from

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