FAMILY LIFE IN THE RECESSION : Staying Afloat : Hard times are here, and money is tough to come by. This could be you. : To Pay Expenses, a Job to Supplement Benefits
Frugality seems to be the byword. Whether they’ve lost their jobs and had to tap their savings to stay afloat or have simply trade dinner and a movie out for staying home with a pizza and videos, many Orange County families are being forced by the recession to downscale their lifestyles. The lingering economy slowdown, now officially in its 22nd month, has disabled the Orange County economy more severely than that of any other county in Southern California, according to a recent economic report by Cal State Fullerton. Even those who haven’t experienced layoffs, cutbacks or long unemployment lines have been sobered by the times. It’s the painful morning after the free-wheeling buy-now-pay-later binge of the 1980s and it’s causing many families to rethink their priorities.
Ex-New Yorker Gus Abrams may be struggling to make ends meet during the current recession, but at 81, he’s old enough to remember tough times during the Great Depression.
“In 1932, ‘33, we didn’t have a thing called welfare, nor did we have any help whatsoever,” he said. “You had to pull your own or else sink. But you were also able to buy three Baby Ruths for a dime at the cut-rate price. That would keep you alive for at least six hours.”
Abrams, who was selling men’s clothing in 1933, said everything “was a lot cheaper then. A good loaf of bread was 9 cents a pound. Let’s face it: You could have bought a brand-new Chevrolet for $570--a four-door job--and insure it for about $35 a year.”
Abrams, a widower living on a small fixed income, now pays about $800 a year for car insurance and, next to the $700 a month he pays to rent his one-bedroom apartment, that’s his biggest annual expense.
But that’s a big bite for Abrams, who had a variety of jobs over the years--from owning a toy store in New York City “that went bust” in 1957 to driving a cab in Long Beach until he retired at 65.
Abrams receives what he calls a “pitiful” $44.50-a-month pension from the cab company and $520 a month in Social Security. He and his late wife, Esther, once had $58,000 in savings, but in 1984 Alzheimer’s disease forced Esther into a nursing home, and, he said, “it ate up a lot of my money.”
By the time Esther died in late 1988, their life savings had dropped to $28,000. “I was getting 9 and 10% interest and a lot more sometimes in years past, but that’s dwindled down to under 4%,” said Abrams, who earned about $2,000 in interest last year.
To make ends meet, Abrams went back to work part time five years ago. Through Orange County Senior Aides, a federally subsidized employment training program for people 55 and older on low incomes, he earns about $4,500 a year working 20 hours a week in the library at Saddleback College in Mission Viejo.
Without that extra income, he said, “there is no question in my mind I would have eaten up every dollar I had. I’d wind up in Tent City. And I’m not a spendthrift.”
Abrams spends his evenings at home watching television. “To put it bluntly, I have no lifestyle,” he said. “I can’t afford taking an old lady out and paying $18, $20 for dinner for her or buying her a bottle of perfume for $45 or $50.”
There is, Abrams said, simply no extra money.
“As a matter of fact, if I go to the supermarket and tomatoes are $2 a pound, I don’t buy them.”
Monday through Friday, Abrams works mornings at the college. After work he sometimes shops or runs errands for his daughter.
“I don’t bother her for money, although every now and then she’ll give me a gift or something,” he said. “She’s been very nice, but she’s married and has her own problems.”
INCOME FOR 1991: $13,000
RENT: $700 a month
MAJOR EXPENSES:
Car insurance: $800 a year
Health insurance: $750 a year
CAR PAYMENTS: None
SAVINGS: $28,000
INVESTMENTS: None
RETIREMENT ACCOUNTS: None
