Downsized : Episode #4 - "We're Working On It"

I've been watching the program 'Downsized' on the WE television network.  The show follows the Bruce family and their seven kids and discusses their financial difficulties after they go bankrupt.

[SPOILER ALERT : there are spoilers below]

Yesterday I finally watched the fourth episode of the program on my DVR.   

Suspending Cable Service

They spent the first five minutes of the show mostly talking about how they cut cable off and kids didn't like it.  Actually Laura (the mother) suspended their cable account rather than cancel it officially.   Suspending the account will put it in 'limbo' so that you are paying nothing but get no TV service.   This way they can turn it back on later if they get the money but won't have to pay to reconnect the service.   I'm sure that the cable company prefers suspension over cancellation since it gives you an easy option to come back to them and give them more of your money.  I don't see a down side for the consumer except the possibility that someone will give in to weakness and un-suspend their account with a quick phone call.


Disciplining Kids Who You Borrow Money From

Bruce (dad) and the teenage boys worked on one construction job.  They were doing some landscaping work in someones back yard.    One of the boys, Dylan, failed to show up for work one day and wasn't answering his cell phone.  He was found sitting on the couch eating ice cream.   Bruce disciplined him by taking away the cell phone and grounding him from baseball for a month.    The son pays for the cell phone ($15 a month) himself so he wasn't happy with having it taken away.   Laura sympathized with that thought and also felt they were in a precarious situation to discipline the kids that way since they have borrowed money from their kids.    In my opinion, Bruce is right and kids don't get to keep their 'stuff' just because they paid for it.   Cell phones are not a 'right', they are a privileged.   I understand the kids perspective, he's a lazy kid who doesn't like discipline.  No surprise that he thinks his punishment is 'stupid'.  Flaunting rules and eating ice cream was pretty stupid too.    I also understand Laura's perspective that its hard to take 'stuff' away from the kids when you owe them cash.   She probably shouldn't borrow money from her kids in the first place.  But now that they are in that difficult situation they can't let it overrule all household rules and let the kids reign free simply because mom owes them money.

Housecleaning for Too Cheap

Laura had the idea to do house cleaning as a side job and she enlisted the teenage daughters to help her.   She knew a friend of a friend named Gina who needed some house cleaning and got a job to do it.   When she went to talk to Gina she found out what the work would involve and then Laura had to give a quote for the service.   Laura (in voiceover) said that she thought about charging $100 or $120 but then actually quoted $80 for the work.   She immediately realized from Gina's happy reaction that the $80 figure was too low and that shed undersold herself.   This is probably a common mistake made by people doing first time businesses.   Its hard to know what to charge for a service and people may be more inclined to charge less to try and make sure they get the job.    Laura realized the price was low so I assume she will charge more in the future for other customers.   But its a difficult precedent to charge Gina $80 one day and then try and raise the amount for subsequent work.    Gina did give Laura and the girls a $20 tip though so they ended up with $100. 

Laura's attitude

There was what seemed like some grumbling from Laura about the housecleaning.  She mentioned how she had spent eight years in college and how she used to have her own house cleaned.  She said that it could be demeaning.   I wouldn't really consider it whining and she wasn't making a big deal about how horrible it was.   But she did mention it so you know theres something of an attitude from her about it.   At one point early in the show she said something about how she wouldn't get the summer off like usual.  To me that seemed fairly obvious given the situation.   She mentioned it but it again it wasn't whiny, it may just have been statement of the obvious fact.   I'm not really sure if Laura is being whiny or not.   Maybe she's feeling a little sorry for herself.     But of course its a reality TV show so the producers may just be cut and edit everything out of context to maximize the drama.

Other News

Laura started doing some tutoring work with one child.   They worked on making a video to advertise Bruce's construction business.  That video was a lot of the episode but I personally didn't find it too interesting.   Instead of handing out flyer's to advertise the construction business the older teenage daughter had the idea to create a video to post on the internet for advertising.  Then they had creative differences on how to make the video and it seemed to end unfinished. 

I'm starting to lose interest in the show some at this point.    I'm not sure if I want to keep watching it.  The show isn't bad really, but I think I can find something more useful to do with my time.

Downsized : Episode #3 'Cruel Cruel Summer'

I've been watching the program 'Downsized' on the WE television network.   I discussed the first episode and the second episode.   The show follows the Bruce family and their seven kids and discusses their financial difficulties after they go bankrupt.

I watched the third episode and below is my take on it.

[SPOILER ALERT : there are spoilers below]

Budgeting
Blew their budget by 7th day of month.  The wife had spent a $1000 merit bonus at work on clothes.   Because thats what bonuses are for, to blow on stuff.   Not to pay the rent bill you can't seem to pay.  At the end of the show they have a family meeting and discuss budgeting.  They show some of the budget items and what they spend: Cable $69, Groceries $200-$500, Rent $1695, Credit cards $125, Cheer $145, Entertainment $200, Eating out $500, Baseball $600, activities functions $200, auto and rental insurance $317, Internet $59.    Overall they cut about $1600 from their monthly spending.


Kids Sacrifices
A lot of the show was about cutting back on spending for the kids.   In the last episode they said they had been spending $145 a month on cheerleading for their youngest daughter who is 10 years old.   Laura, the wife couldn't give up cheer for the 10 year old.   So she asks the daughter to choose between theatre camp or cheer.   The daughter chooses cheer.  But then Bruce the dad asks about the expense and says that he thought they agreed to cut it.  Laura then tells the daughter that they cant afford it.   They also talk about how the boys are doing summer baseball.   Summer baseball is $200 each x 3 for $600 total.   The boys realize this is too expensive and decide to do without it.    There is also a lot of drama over the two teenage girls going to prom or not.   The tickets for prom are $65 each.   One gets to go because her mom pays for the tickets and the other doesn't go since she can't afford the tickets. 


Coffee Idiocy
Laura is still buying 'gourmet coffee' which we now see means Starbucks or similar.   She tries making coffee at home in a blender but has difficulty making it right.   She says that she "doesn't know if its money saving thing" and "thinks its easier to go buy coffee" and that she is "just done, giving up".  I am not sure if those are exact quotes or not but it was words to that effect.   At the end of the show Bruce buys her some ingredients and a reusable cup and gives her a recipe, which works for Laura.


More work for dad and mom
Bruce has a new company called Stone Canyon Construction.   He prints fliers and posts them around town.  We see him talking to one potential homeowner about doing some exterior painting work.  Laura also lines up some tutoring work during the summer with her former students.   She had 6 students she was going to tutor and expected to make about $190 per week.

My opinion on this episode:
They are doing ok in general as far as cutting their spending and increasing their income.   They cut about $1600 from spending.  Laura should be bringing in $760 a month from tutoring and Bruce will make some money with more work.
They really should have come up with $65 for the one daughter to go to prom.  Its not fair for one daughter to go to prom and the other not too.  $65 isn't all that much.
Cutting cheer for the youngest should have been a nobrainer.
Making coffee at home should not be that hard and if you fail the first time then thats not a license to spend $5 a day at Starbucks.

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.


Summary:

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 Teamdean.com

"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

Down On His Luck Millionaire?

I just came across an AP article via Yahoo  about a new TV show called "Downsized".

The AP article on it says:

"The WE television network on Saturday premieres "Downsized," an eight-episode series about the blended family of Laura and Todd Bruce who are struggling financially following the collapse of Todd's construction business.

Bruce used to take in $1.5 million a year. ..."

What. What now?    He used to make $1.5 million?  Now they're "struggling financially"?    I'm sorry if I seem callous about their situation but if you used to make $1.5 M in a year then there is no good reason that you should be struggling.  Unless there are very extreme circumstances such as severe medical problems or the like that we don't know about.   The article doesn't go into much detail over what happened to their money.  
"They lived well when construction was booming, frequently eating out, and didn't react quickly when tougher times came. Bruce racked up credit card debt trying to keep up and pay employees when the work went away. Laura Bruce is a schoolteacher, waitressing on the side and about to teach fitness. "

Then the article goes on to quote the TV exec saying:"It's the face of the economic issue of our times," said John Miller, chief programming executive at the women-centered WE network.  No it isn't.    The face of the economic issues of our times is not people who used to make $1.5M a year and now have nothing.   


It is possible that the $1.5 M a year is actually the gross revenue of his business before his expenses.   That seems more likely.   But the article isn't clear on the point.  If thats the case then I'd chalk this up to bad journalism.     Or are we all just supposed to know that "Bruce used to take in" means his gross business income?  I don't think so.

I'm also curious why the wife Laura's two jobs of schoolteacher and waitress aren't enough for them to get by financially.   Sure teachers don't make a ton of money but isn't it enough to pay basic bills?

I guess I'd have to actually watch the show to clear up the situation.   But I don't know of they'll really go into the families financial history much at all.     Its probably going to be 95% about the drama of their lives as they struggle to pay bills.   I might check out the show out of morbid curiosity.   I shouldn't watch it though cause I'm pretty sure it will be garbage.