November 10, 2010

"Downsized" TV Program : First Look

The other day I talked about the show Downsized on the WE television network.   

Here are some financial details I gleaned from the pilot episode:

  • They were spending $15,000 to $18,000 per month.   Wife did not realize they were spending that much
  • He had a "booming" general contracting business.  His business was "taking in" $1.5 M a year.
  • They bought an investment condo
  • Their home and investment condo were lost in foreclosure.   I think the father said they lost their house about a year ago.
  • They used up their savings and 401k
  • They've been married five years and have seven kids.   Five of the kids from her and two from him.
  • She works as a teacher and says her salary is "pitiful" and she feels like she's volunteering.   They are in Anthem, Arizona and in one shot they show the Boulder Creek High School.   That is the Deer Valley Unified School District.   Pay for teachers there starts at $33,090 and she probably makes more than that assuming she has some seniority.
  • The husband still works when he can, but construction work is hard to find.   He is owed some wages from labor.
  • One of the kids talked about going out to dinner every night one year ago.
  • They are on food stamps.    With 7 kids it would not be hard to qualify for assistance.
  • They said something about one of the teenagers having a cell phone.   
  • They were $300 short on their rent bill.   We do not know how much the rent costs. 
  • The father installs shower flow timers to save on water bills.  
  • They are renting a fairly good size house it looked like.   The kids were sharing rooms. 
  • They showed them going to the grocery store and buying what was on sale.
  • The daughter tried to pay for groceries with food stamps but they had used up most of their benefit allocation.
  • One of the teenage daughters was getting a hand me down car from her grandparents.
  • They drive a large van and there was another car in their driveway.  The other car was a sedan.    They blurred out the name badge on the car but if I am not mistaken it is a Mercedes.

My commentary is below.   First let me state clearly that I'm making some assumptions based on what little detail we've got about their finances.    Second I do not mean to bash these people but am simply examining their financial situation.   Third the show is reality TV and I'm sure its mostly contrived to create drama and I'm not sure how much reality there really is and how much is just scripted.  With that said, I'm going to work with the assumption that this may be a pretend situation more than not.

The past

They made a LOT of money in the past and now have nothing to show for it.  Thats the biggest problem with their past behavior.   They spent too much and did not save enough.   If they had simply cut their spending to a more reasonable level then they should have been able to avoid their current situation.   Given their spending level of $15,000 to $18,000 a month they were either making ballpark of $200,000 a year or more or they were overspending.   Either way they didn't save enough and overspent.

They should have cut back on spending a lot faster.   Sounds like they ate out every night which is pretty excessive considering that there are nine people to feed.   And that kind of spending behavior was about a year ago which is also the same timeframe when they lost their house.   So it sounds as if they spent excessively right up to the point that they lost their house to foreclosure.

The past is the past and you can't go back and fix it after the fact.   They made mistakes financially that I hope they have learned from.   The rest of us should look at what they've done and use it as a reminder to not live beyond our means and not let increased income inflate your living standard excessively.

Their attitude

Generally they seem to have decent outlook.   The kids don't come across as spoiled to me and the parents aren't blaming society for their problems.   They are trying to pay their bills and actively working to do so.  

The wife describing her teacher salary as "pitiful" and how she feels as if she's volunteering makes it sound to me that she is a bit entitled and does not understand how the real world works.   Median pay for all workers is $15.95 an hour which equates to $31,900 per year given full time work.   She's getting paid more than 50% of American workers and putting in 9-10 months of labor.    Teachers are not highly compensated, but their pay is not "pitiful" by any realistic measure if you compare to the population as a whole.   Yeah she isn't swimming in cash like previously but she's still doing just as well as most working Americans.   She needs to be reset to reality as far as income.   If she thinks $33k+ is "pitiful" then I bet the rest of her family has a similar attitude about income levels.  

Still need to downgrade lifestyle.  If that is in fact a Mercedes in their driveway then they seriously need to come down to reality.   You don't drive a Mercedes if you can't pay your rent.   The house they rent looks pretty nice.  Maybe they don't 'need' a house that nice, especially if they can't afford it.

What They Ought to Change

They may be spending too much even still.  Their house and cars are very nice.   One of their teenagers has a cell phone.  Does that mean that all of the kids have cell phones?    Paying your rent is a higher priority than teenagers having cell phones.   One of the girls is getting a car and I wonder who will be paying gas and insurance for that car?   

Changes they should probably make now:
Sell the cars (especially a Mercedes)
Downgrade the home
Cut unnecessary spending like cell phones for the kids and anything else
Pay pent, food and primary utilities first.
Kids could work - I'm not saying the kids should pay the family bills, but they could work to support their own spending like cell phones and their own car insurance, etc.

Verdict:   The show is interesting but I would not go out of my way to watch it.  I may try to watch some more episodes out of curiosity about their financial situation.

For another opinion check out another review of the show from Frugal Moms

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