Tom and Kate live in quite the neighborhood in a northeastern suburb, surrounded by people "who have seven cars and fly off to Italy for three weeks." They don't. They're broke, or, more accurately, so deeply in debt it's staggering. In a lengthy interview for Wealthsimple, the couple were granted anonymity in exchange for laying bare "the brutal details of their life in the grip of an epic cycle of debt." The two, 48 and 46, respectively, have three kids, work in insurance, make upwards of $160,000 combined, and "have an insurmountable amount of debt." That's no understatement: They owe $18,000 for a loan, $60,000 on their credit cards, $360,000 on a home worth that same amount, and somewhere north of $120,000 on loans for Kate's unused law-school degree.
"We’re always broke. We shop at Goodwill. We have a garden so that we can have fresh vegetables instead of going out," says Kate. That may sound prudent, but the two then proceed to detail a series of bad decisions. In the next breath, Kate describes spending a "crazy amount" on organic food, and not "reeling in" their kids from doing things like buying $15 of sushi from Whole Foods. Short on cash, they bought their son a tux for prom, because it could go on a Nordstrom card. They send their kids to a $32,000-a-year private school (they pay only a fraction of that, but took out loans to do so). They cashed out a $70,000 401(k) without anticipating the tax penalties of about $20,000, some of which went on, yep, a credit card. Five years ago, they borrowed $40,000 from Kate's parents and paid off all their credit card debt—then built it right back up. Read the full piece, which ends with Tom explaining why they'd be "better off dead." (More Longform stories.)
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