7 ms·

This is what happened when I drove my Mercedes to pick up food stamps

43 points by zonotope 12y ago

r721 12y ago
Previously discussed: https://news.ycombinator.com/item?id=8010723 https://news.ycombinator.com/item?id=8010723
IanDrake 12y ago
>Poverty is a circumstance, not a value judgment Really? All I see is someone who lacks good judgement when I read that article. I had a Mercedes once and sold it when things got tight. Holding onto an asset like that when you're impoverished is just foolish. I can't imagine being unemployed that long either. I'd be raking leaves for money after two months.
- Zigurd 12y ago
  A 2003 C230K, which is what it sounds like the author was driving, could be worth in the low single-digit thousands, depending on the miles. You might find a similar vintage Subaru for hundreds of dollars less, but the risk of swapping an old car you know for one you don't to extract a few hundred dollars makes no sense. One repair could wipe that out several times over. Moreover, this car is probably paid for. They might have to finance a replacement at very unfavorable rates.
  - fnordfnordfnord 12y ago
    In the article she says the Mercedes was paid off; and anyone who has ever owned one knows that their resale value as a percentage of the original purchase price is among the worst of all car makes.
  - DiabloD3 12y ago
    Honestly, this is the correct thing. Cars, once they're about 2-3 years old, have no real value. They all drop below $10k around here no matter the make or model (Maine winters are hard on vehicles, though, again, no one drives Mercedes around here either). Buying a car is a sunk cost. Once you own it, getting rid of it before it cannot be driven anymore is wasting money. Once she bought that Mercedes, once it got too old, swapping it for a newer used vehicle would just give her a worse vehicle that would cost her more money in the long run. I am poor. I've never been rich. I have a few nice things because I force myself to do the math on things. Other poor people hate me and threaten to report me to "the authorities" for owning nice things because somehow I cheated to get them. I may not own many things, but the things I own do what I need them to do, and will do so for a very very long time. What this woman did, in my opinion, was the right thing. Selling only makes sense if you can actually profit from it.
    - jacquesm 12y ago
      A car is not only something that costs money to buy, it also costs money to maintain and run. That cost can be cut and if you are in trouble financially the first thing to go should be a vehicle that you can no longer afford to own and operate. It's a luxury item.
      - Delmania 12y ago
        Regardless of how much trouble you're in, reliable transportation is needed. Cars are an expense, but in the situation described, the Mercedes was fully paid off. The cost of maintaining it (gas, repairs, insurance) is no greater than any other car.
        jacquesm 12y ago
        Repairs on an older Mercedes are actually quite expensive. I should know because I own one and if hard times would hit - unlikely, but you never know - it would be the first thing to go (and I'd replace it with an old VW Golf/Rabbit diesel).
        bryanlarsen 12y ago
        VW diesels are very expensive to fix when things go wrong, in my personal experience.
        jacquesm 12y ago
        That's true, but on the plus side, things don't go wrong very frequently. I've run this beast: http://pics.camarades.com/v/jacques/cars/golf/ http://pics.camarades.com/v/jacques/cars/golf/ From '09 to '11 and it had more than 300K km on it by the time I was done with it (and it still brought me back more than I paid for it...). You have to be pretty sharp when you're buying them to make sure you don't buy one that has been maintained poorly. Fuel pump and turbo are the most important things to check. That car cost about $750 to buy and another $200 for fixes required right after buying it to get it through the 'MOT', after that it ran without a hitch for two years.
  - tootie 12y ago
    The mistake was buying it in the first place. A Honda Accord would last 10 years for half the price.
- bryanlarsen 12y ago
  They have a reliable $5000 car. Given they have two babies, they need reliable transportation. What could they buy for significantly less than $5000 for reliable transportation? A bicycle would work for an adult, but they had two babies...
- Delmania 12y ago
  That's pretty much a knee jerk reaction. The car in question is over a decade old, but is fully paid off and in good repair. It was also the couple's only car at the time, as her Honda has broken down. Reliable transportation is a key component to escaping poverty. The author isn't perfect, she and her husband did make some poor choices, but keeping the Mercedes is not one of them.
  - techsupporter 12y ago
    > The author isn't perfect, she and her husband did make some poor choices Unless I missed something, I don't see where the author and her husband made any poor choices. Keeping the paid-off vehicle is prudent[0]. They were making a combined income of $120k, according to her, when they chose to have a child. Only after the pregnancy was her husband laid off and they couldn't have easily foreseen that the babies would have health problems. They bought a house but the timing wasn't their fault and it's almost impossible for a layperson to predict. In short, they discovered the true meaning of "shit happens." 0 - That's one thing people might want to keep in mind when they see someone talking on an iPhone while paying with food stamps. It's far easier to keep what you have than to sell it--usually at "fire sale" prices for quick cash--and try to replace it with something cheaper. If I ever lost my job, two of the last things to go would be my paid-off vehicle and my dirt-cheap unlimited data mobile plan with smartphone.
    - IanDrake 12y ago
      You guys know you can walk into a dealership with one car and walk out with another car and a check in your hand right? I'm not sure where this "paid off" straw-man argument comes from. I've driven perfectly reliable cars that cost less than $5K. A 10 year old Mercedes in great shape is probably worth about 15-20K. Why not trade that in and get another "paid off" car worth 5K and a check for 10K? I guess it depends on how you were brought up. I'd rather sell all my possessions at pennies on the dollar, live in a honda civic, and do odd jobs than take government assistance.
      - poikniok 12y ago
zoidb 12y ago
This is not a new article, should probably add 2014 to the title.
jacquesm 12y ago
Inability to adjust your spending and lifestyle when things get tough is one of the reasons plenty of people end up in real trouble, sometimes more trouble than they can solve by themselves.
- kedean 12y ago
  I don't think anything in this article implied that they were living above their means.
  - criley2 12y ago
    The Mercedes was far above their means. A fully paid off, expensive, imported luxury vehicle. They made a choice: Sell the Mercedes (likely for $8,000 - $12,000 in cash) and support their family by supplementing their income for six month to a year on that, less after buying a $3000-$4000 daily driver. When you're in food-stamp-hyper-frugal-mode, $8,000 cash can keep your family alive for some time! They chose to get food stamps and keep the luxury car instead. It was their choice, but when you're driving around your "emergency fund" and your bank account is hovering at zero while Uncle Sam puts food on your table, some would suggest your priorities and means are a bit confusing.
    - bsclifton 12y ago
      So a $30,000 car (or less if bought used) when you make $120k is living outside your means? If you have no debt and you have the ability to buy the car cash or pay it off within 1-2 years, how exactly is this bad- especially since you'd enjoy it? Sure, the boring thing to do would be to put all the money in savings... but if you think a 30k is outside your means, then you're probably so cheap you don't take vacations
      - jacquesm 12y ago
        > So a $30,000 car (or less if bought used) when you make $120k is living outside your means? Yes! > If you have no debt and you have the ability to buy the car cash or pay it off within 1-2 years, how exactly is this bad- especially since you'd enjoy it? Enjoyment does not enter into whether or not it is rational to put a substantial portion of your wealth in a depreciating asset such as a car. > Sure, the boring thing to do would be to put all the money in savings... But then you wouldn't be buying foodstamps five years down the line. > but if you think a 30k is outside your means, then you're probably so cheap you don't take vacations Being cheap and being smart with money are not the same thing, and using words like 'cheap' to target a person indicate that you are not approaching the subject rationally but would rather attack a person that has an opinion different from yours using a negative term than to bring a solid counterargument. Pity.
bko 12y ago
>The weeks flew by. My boyfriend proposed, and we bought a house. Then, just three weeks after we closed, the market crashed. The house we’d paid $240,000 for was suddenly worth $150,000. It was okay, though — we were still making enough money to cover the exorbitant mortgage payments. Then we weren’t. I don't understand how a mortgage payment can go from (presumably) reasonable to exorbitant with just an adjustment of the perceived value of the home. My impression is that in the past people put less stock in the financial value of their home and just continued to pay their mortgage regardless of the underlying market. Now it is more common to walk away if you're under-water or refinance if you're in the money or want to take out some equity.
- Tloewald 12y ago
  The quoted lines do not state that the mortgage became exorbitant because the value of the price dropped -- you're reading that into it. On the other hand, a lot of people bought houses on 3-5 year fixed interest mortgages during the housing bubble, on the grounds they expected to be able to resell or refinance when the fixed interest rate expired and the mortgage suddenly got a lot more expensive and -- because their properties were now underwater -- they could not sell or refinance. Back in the days when people just paid their mortgages, real estate was seen as a safe but boring investment, and interest rates were at 5-6% (2-3% above inflation). It's a bit rich when a mortgage lender lends money to a high risk customer and takes out insurance on their defaulting or the property losing value (PMI) and charges the customer for that insurance and then gets annoyed if the customer walks away from the wreckage.
  - bko 12y ago
    The mortgage was 240k. Even with 0% down payment, a 3.92% rate would result in mortgage payments of ~$1,100 a month. The couple was making 120k a year combined. I think this is more than reasonable. I couldn't understand the gut negative reaction I had to this story. I understand why these programs exist and am not necessarily opposed to them. But I feel that people (within their means) should structure their financial affairs to not have to rely on these programs and not use them unless they have to. Unemployment for college educated workers barely crossed 5% at its worst so the two should not have been unemployed for years.[0] I would be hard pressed to accept food stamps even if I qualified but I would likely accept unemployment insurance. In that sense, it's funny that food stamps are faux pas, unemployment insurance is acceptable and tax minimization is applauded. Even knowing that, I can't help but hold those same biases though. [0] http://www.economicpopulist.org/content/what-happens-when-president-outsources-job-creation-multinational-corporate-executives http://www.economicpopulist.org/content/what-happens-when-pr...
Theodores 12y ago
Shame they cannot join the 'sharing economy' with Uber and that car.
jkot 12y ago
Just different perspective from Greece: My father in law just scrapped 20 years old reliable Mercedes. There was new tax which charged 2.5x of its value every year. Instead we got small Fiat which breaks all the time.
- jacquesm 12y ago
  Small reliable car about the size of that fiat: Toyota Aygo, Citroen C1 or Peugeot 107. All the same care under different hood. Fiat: looks nice, unreliable, resale value terrible.
- FireBeyond 12y ago
  After I got separated I drove around in a 93 Civic with 200K+ miles on it. Only scheduled services. This thing started first time, every time, even in the winter. It ran smooth. It's KBB value was $800.
snarfy 12y ago
My wife is disabled. While at the annual group meetup/picnic one of the other disabled people mentioned how she got the dent fixed in her Z4 using her disability money. It's hard but I try not to judge. You never know the circumstances.

43 points by zonotope 12y ago

r721 12y ago

Previously discussed: https://news.ycombinator.com/item?id=8010723 https://news.ycombinator.com/item?id=8010723

>Poverty is a circumstance, not a value judgment Really? All I see is someone who lacks good judgement when I read that article. I had a Mercedes once and sold it when things got tight. Holding onto an asset like that when you're impoverished is just foolish. I can't imagine being unemployed that long either. I'd be raking leaves for money after two months.

Zigurd 12y ago
A 2003 C230K, which is what it sounds like the author was driving, could be worth in the low single-digit thousands, depending on the miles. You might find a similar vintage Subaru for hundreds of dollars less, but the risk of swapping an old car you know for one you don't to extract a few hundred dollars makes no sense. One repair could wipe that out several times over. Moreover, this car is probably paid for. They might have to finance a replacement at very unfavorable rates.
- fnordfnordfnord 12y ago
  In the article she says the Mercedes was paid off; and anyone who has ever owned one knows that their resale value as a percentage of the original purchase price is among the worst of all car makes.
- DiabloD3 12y ago
  Honestly, this is the correct thing. Cars, once they're about 2-3 years old, have no real value. They all drop below $10k around here no matter the make or model (Maine winters are hard on vehicles, though, again, no one drives Mercedes around here either). Buying a car is a sunk cost. Once you own it, getting rid of it before it cannot be driven anymore is wasting money. Once she bought that Mercedes, once it got too old, swapping it for a newer used vehicle would just give her a worse vehicle that would cost her more money in the long run. I am poor. I've never been rich. I have a few nice things because I force myself to do the math on things. Other poor people hate me and threaten to report me to "the authorities" for owning nice things because somehow I cheated to get them. I may not own many things, but the things I own do what I need them to do, and will do so for a very very long time. What this woman did, in my opinion, was the right thing. Selling only makes sense if you can actually profit from it.
  - jacquesm 12y ago
    A car is not only something that costs money to buy, it also costs money to maintain and run. That cost can be cut and if you are in trouble financially the first thing to go should be a vehicle that you can no longer afford to own and operate. It's a luxury item.
    - Delmania 12y ago
      Regardless of how much trouble you're in, reliable transportation is needed. Cars are an expense, but in the situation described, the Mercedes was fully paid off. The cost of maintaining it (gas, repairs, insurance) is no greater than any other car.
      - jacquesm 12y ago
        Repairs on an older Mercedes are actually quite expensive. I should know because I own one and if hard times would hit - unlikely, but you never know - it would be the first thing to go (and I'd replace it with an old VW Golf/Rabbit diesel).
        bryanlarsen 12y ago
        VW diesels are very expensive to fix when things go wrong, in my personal experience.
        jacquesm 12y ago
        That's true, but on the plus side, things don't go wrong very frequently. I've run this beast: http://pics.camarades.com/v/jacques/cars/golf/ http://pics.camarades.com/v/jacques/cars/golf/ From '09 to '11 and it had more than 300K km on it by the time I was done with it (and it still brought me back more than I paid for it...). You have to be pretty sharp when you're buying them to make sure you don't buy one that has been maintained poorly. Fuel pump and turbo are the most important things to check. That car cost about $750 to buy and another $200 for fixes required right after buying it to get it through the 'MOT', after that it ran without a hitch for two years.
- tootie 12y ago
  The mistake was buying it in the first place. A Honda Accord would last 10 years for half the price.
bryanlarsen 12y ago
They have a reliable $5000 car. Given they have two babies, they need reliable transportation. What could they buy for significantly less than $5000 for reliable transportation? A bicycle would work for an adult, but they had two babies...
Delmania 12y ago
That's pretty much a knee jerk reaction. The car in question is over a decade old, but is fully paid off and in good repair. It was also the couple's only car at the time, as her Honda has broken down. Reliable transportation is a key component to escaping poverty. The author isn't perfect, she and her husband did make some poor choices, but keeping the Mercedes is not one of them.
- techsupporter 12y ago
  > The author isn't perfect, she and her husband did make some poor choices Unless I missed something, I don't see where the author and her husband made any poor choices. Keeping the paid-off vehicle is prudent[0]. They were making a combined income of $120k, according to her, when they chose to have a child. Only after the pregnancy was her husband laid off and they couldn't have easily foreseen that the babies would have health problems. They bought a house but the timing wasn't their fault and it's almost impossible for a layperson to predict. In short, they discovered the true meaning of "shit happens." 0 - That's one thing people might want to keep in mind when they see someone talking on an iPhone while paying with food stamps. It's far easier to keep what you have than to sell it--usually at "fire sale" prices for quick cash--and try to replace it with something cheaper. If I ever lost my job, two of the last things to go would be my paid-off vehicle and my dirt-cheap unlimited data mobile plan with smartphone.
  - IanDrake 12y ago
    You guys know you can walk into a dealership with one car and walk out with another car and a check in your hand right? I'm not sure where this "paid off" straw-man argument comes from. I've driven perfectly reliable cars that cost less than $5K. A 10 year old Mercedes in great shape is probably worth about 15-20K. Why not trade that in and get another "paid off" car worth 5K and a check for 10K? I guess it depends on how you were brought up. I'd rather sell all my possessions at pennies on the dollar, live in a honda civic, and do odd jobs than take government assistance.
    - poikniok 12y ago

zoidb 12y ago

This is not a new article, should probably add 2014 to the title.

jacquesm 12y ago

Inability to adjust your spending and lifestyle when things get tough is one of the reasons plenty of people end up in real trouble, sometimes more trouble than they can solve by themselves.

kedean 12y ago
I don't think anything in this article implied that they were living above their means.
- criley2 12y ago
  The Mercedes was far above their means. A fully paid off, expensive, imported luxury vehicle. They made a choice: Sell the Mercedes (likely for $8,000 - $12,000 in cash) and support their family by supplementing their income for six month to a year on that, less after buying a $3000-$4000 daily driver. When you're in food-stamp-hyper-frugal-mode, $8,000 cash can keep your family alive for some time! They chose to get food stamps and keep the luxury car instead. It was their choice, but when you're driving around your "emergency fund" and your bank account is hovering at zero while Uncle Sam puts food on your table, some would suggest your priorities and means are a bit confusing.
  - bsclifton 12y ago
    So a $30,000 car (or less if bought used) when you make $120k is living outside your means? If you have no debt and you have the ability to buy the car cash or pay it off within 1-2 years, how exactly is this bad- especially since you'd enjoy it? Sure, the boring thing to do would be to put all the money in savings... but if you think a 30k is outside your means, then you're probably so cheap you don't take vacations
    - jacquesm 12y ago
      > So a $30,000 car (or less if bought used) when you make $120k is living outside your means? Yes! > If you have no debt and you have the ability to buy the car cash or pay it off within 1-2 years, how exactly is this bad- especially since you'd enjoy it? Enjoyment does not enter into whether or not it is rational to put a substantial portion of your wealth in a depreciating asset such as a car. > Sure, the boring thing to do would be to put all the money in savings... But then you wouldn't be buying foodstamps five years down the line. > but if you think a 30k is outside your means, then you're probably so cheap you don't take vacations Being cheap and being smart with money are not the same thing, and using words like 'cheap' to target a person indicate that you are not approaching the subject rationally but would rather attack a person that has an opinion different from yours using a negative term than to bring a solid counterargument. Pity.

bko 12y ago

>The weeks flew by. My boyfriend proposed, and we bought a house. Then, just three weeks after we closed, the market crashed. The house we’d paid $240,000 for was suddenly worth $150,000. It was okay, though — we were still making enough money to cover the exorbitant mortgage payments. Then we weren’t. I don't understand how a mortgage payment can go from (presumably) reasonable to exorbitant with just an adjustment of the perceived value of the home. My impression is that in the past people put less stock in the financial value of their home and just continued to pay their mortgage regardless of the underlying market. Now it is more common to walk away if you're under-water or refinance if you're in the money or want to take out some equity.

Tloewald 12y ago
The quoted lines do not state that the mortgage became exorbitant because the value of the price dropped -- you're reading that into it. On the other hand, a lot of people bought houses on 3-5 year fixed interest mortgages during the housing bubble, on the grounds they expected to be able to resell or refinance when the fixed interest rate expired and the mortgage suddenly got a lot more expensive and -- because their properties were now underwater -- they could not sell or refinance. Back in the days when people just paid their mortgages, real estate was seen as a safe but boring investment, and interest rates were at 5-6% (2-3% above inflation). It's a bit rich when a mortgage lender lends money to a high risk customer and takes out insurance on their defaulting or the property losing value (PMI) and charges the customer for that insurance and then gets annoyed if the customer walks away from the wreckage.
- bko 12y ago
  The mortgage was 240k. Even with 0% down payment, a 3.92% rate would result in mortgage payments of ~$1,100 a month. The couple was making 120k a year combined. I think this is more than reasonable. I couldn't understand the gut negative reaction I had to this story. I understand why these programs exist and am not necessarily opposed to them. But I feel that people (within their means) should structure their financial affairs to not have to rely on these programs and not use them unless they have to. Unemployment for college educated workers barely crossed 5% at its worst so the two should not have been unemployed for years.[0] I would be hard pressed to accept food stamps even if I qualified but I would likely accept unemployment insurance. In that sense, it's funny that food stamps are faux pas, unemployment insurance is acceptable and tax minimization is applauded. Even knowing that, I can't help but hold those same biases though. [0] http://www.economicpopulist.org/content/what-happens-when-president-outsources-job-creation-multinational-corporate-executives http://www.economicpopulist.org/content/what-happens-when-pr...

Theodores 12y ago

Shame they cannot join the 'sharing economy' with Uber and that car.

jkot 12y ago

Just different perspective from Greece: My father in law just scrapped 20 years old reliable Mercedes. There was new tax which charged 2.5x of its value every year. Instead we got small Fiat which breaks all the time.

jacquesm 12y ago
Small reliable car about the size of that fiat: Toyota Aygo, Citroen C1 or Peugeot 107. All the same care under different hood. Fiat: looks nice, unreliable, resale value terrible.
FireBeyond 12y ago
After I got separated I drove around in a 93 Civic with 200K+ miles on it. Only scheduled services. This thing started first time, every time, even in the winter. It ran smooth. It's KBB value was $800.

snarfy 12y ago

My wife is disabled. While at the annual group meetup/picnic one of the other disabled people mentioned how she got the dent fixed in her Z4 using her disability money. It's hard but I try not to judge. You never know the circumstances.