“You don’t know what's going to happen tomorrow”

By Hank Kalet

Christine Barilka lives what she would call a simple life. She and her husband have a small apartment in South Brunswick, where they raise her daughter’s four children. They don’t have cable television, spend only what they absolutely must spend — on diapers, medication, transportation, rent and food — and still, at the end of the day, they’re forced to rely on help from the local food pantry.

Barilka, who grew up in South Brunswick in an abusive household, doesn’t complain about her lot. She’s a devout Christian who frequently punctuates her story with comments like “God blesses us” and “God will provide.” But she knows it’s a struggle to get by.

“We have a little bit of money in the bank for rent but, as of right now, there’s maybe $20 in my checking,” she said. “So, just buying yogurt and strawberries on my way home, I was nervous. I went in there and I’m like, ‘oh crap.’ I was a little nervous.”

Barilka’s situation is not unique. According to the United Way of Northern New Jersey, about four in 10 households face the same issues, juggling bills and seeking assistance just to get to the end of the month.

These are not necessarily people living in official poverty, which stands at just above 10 percent in the state. Another 28.5 percent of New Jerseyans fall into a category the United Way describes as ALICE (Asset Limited, Income Constrained, Employed). That means their income falls below the basic cost of living — which the United Way of Northern New Jersey pegs at $74,748 for a family of four and $26,640 for a single adult. 

This “survival” budget, the United Way says, takes into account the full array of costs families face, including not just housing, utilities and food, but clothing, transportation, health co-pays, technology, taxes and other necessities.

“ALICE [families] often have no good choices, right?” said Laura Bruno, public-relations director for the  United Way of Northern New Jersey. “I mean, you’re here every single day, you’re faced with some kind of quote-unquote choice, a choice that isn’t really a choice, constantly having to choose between one bad option after another.”

The ALICE report is consistent with federal studies that show that nearly 40 percent of U.S. families do not have enough savings to weather an emergency.

The “Report on the Economic Well-Being of U.S. Households in 2018,” a Federal Reserve study released in May, found that while there’s been some improvement over the last five years, “a sizeable share of adults nonetheless (still) say that they would have some difficulty with a modest unexpected expense” of about $400. More than a quarter (27 percent) would cover the expense by borrowing money or by selling something to raise the funds, while another 12 percent said they would not be able to cover the expense under any circumstances.

The report also found that 17 percent of adults nationally cannot pay “all of their current month’s bills in full,” while an additional 12 percent said an unexpected expense would likely prevent them from being able to do so.

Paula Mirk, director of financial coaching for NJ Citizen Action, said this instability is the “norm” for most of her program’s clients, who struggle to balance stagnant wages against the state’s high cost of living.

“We’re living in a part of the country that’s extremely expensive, and most of the people we see are living paycheck to paycheck,” she said. “And the reason that they come to us is because it’s just exhausting.”

According to the United Way’s ALICE report, which attempts to quantify what it takes to get by for a person who is asset-limited, income-constrained and working to subsist in New Jersey, a family of four with two adults needs to earn $74,748 annually to break even, a figure that rises for larger families. This is three times the federal poverty line, the report says.

Overall, 38.5 percent of New Jersey’s 3.2-million households fall below this threshold, with 10.5 percent falling below the poverty line.

Lizette Thomas is a single mother who lives in Highland Park and takes care of an 18-year-old son with autism and an elderly mother. She worked two jobs until recently, when a foot injury and surgery forced her onto disability. She earns considerably less than the ALICE threshold despite keeping her expenses to the bare minimum.

“It’s not that I’m living over my means, because as you can see, I live very simple,” she said. “I have two bedrooms, and my bedroom is out in the living room. My mom has one bedroom, my son has the other bedroom. So I sleep in the living room, so they can be comfortable back there. I don’t have any luxury. My car is a 2000 Oldsmobile Bravado, which just broke down like two weeks ago, and I paid like $700 to get it fixed, and the car is still not working right. It’s just really hard. It’s very hard to survive but we try to just make it on what little we have coming in.”

Barilka, who estimates that she takes home about $30,000 a year to support a family of six, also falls well below the ALICE line but does not qualify for many federal or state benefits. State programs pay for much of her grandchildren’s health care, and she lives in affordable housing, but she still has to cover most of her own expenses.

“I try not to think about money. I really try not to, because I know that God blesses us. I work hard, you know. I’m consistent,” she said.

But she also is the primary breadwinner because her husband has epilepsy and can only work part time. That means her income must be stretched to cover nearly all of their expenses.

“I’m basically taking care of him and the four children,” Barilka said. “We don’t get welfare. We don’t get — they won’t give me food stamps. I think I make $20 too much for food stamps. I go to the pantry. I do get a paycheck.”

But building a nest egg for the future is not an option. The issue, overall, is income stability, which is out of reach for almost half the New Jersey population, the Federal Reserve report said.

That’s the experience of people like Debra Oliveda.

Oliveda, who is recently divorced and struggling to keep a roof over her head, called her “day to day” a “struggle.” She has been couch-surfing, working part-time for a nonprofit and juggling her expenses in an effort to stay afloat — let alone trying to set aside a few dollars in a savings account.

“At night, the machine goes, the cogs and the wheels in my mind are going, because I’m trying to figure out my future, I’m trying to figure out my life, because I’m starting all over again,” she said. “I’m divorced. I am starting from the ground up and I’m building a future again, and it’s really hard because being homeless, your life is so unpredictable, like, you don’t know what's going to happen tomorrow.”

Housing is her primary concern, but she also struggles to afford food, to keep her car running and to manage an assortment of health issues that leave her tapped out well before the end of the month.

“To survive, you need financial security, you need job security, you need stable housing, and you’re trying — like, all these things are happening at once, and it’s very stressing because you don’t have any sense of like, you know, a calm, or security in the world you live in, in your life. So it’s very challenging, and it’s very stressing, and it’s taken a toll on my body and my mind, and just on my soul.”

Sheila Reynertson, a senior policy analyst with New Jersey Policy Perspective, a liberal nonpartisan think tank, says that people who fall below the ALICE threshold are “sitting on the edge of poverty at all times.”

“That speaks to not only a wage problem, which we are addressing [by] increasing the minimum wage, but we’re also addressing this through the [Earned Income Tax Credit],” she said. “The tax credits are ramping up to 40 percent, which is one of the better rates in the country. But even those two issues are not going to solve what the issue is. So it’s people who are not making enough to get by because of high costs.”

The Earned Income Tax Credit could be used as seed money for savings, said Lynn Weckworth, director of Income Initiatives for the United Way of Northern New Jersey, but most people who receive it are too strapped to do anything with it but pay expenses. She said clients who participate in an annual income-tax program the organization offers in conjunction with the federal Consumer Financial Protection Bureau tell her that the refund is needed to pay expenses, and that they cannot set aside even the $50 the program sets as its goal.

“The tax refund is often the biggest amount of money a family will see in a year,” she said. “So, that’s a great opportunity for people to put something away for an emergency.”

“We are seeing [tax-program clients] in the spring,” Weckworth added, “so there’s a good chance that there’s a large utility bill for winter heating or electricity they have to pay. For folks with kids that need summer programming, deposits are due around March and April so that they can reserve spots in summer camps. And just keeping up with your rent and your kids’ shoes.”

That makes long-term planning nearly impossible, she said.

“At that moment, because those bills are staring them in the face they feel like they need every single penny of that [tax credit] because they are counting on it to pay these bills,” she said.

Their inability to save partly relates to income fluctuations, which often stem from inconsistent work schedules or the temporary or as-needed nature of many jobs, the Federal Reserve reported. About 30 percent of adults have fluctuating incomes, with a third of them reporting that they struggle to pay their bills as a result. The report calls this “income volatility.”

Brian Kulas, an East Brunswick resident on disability, works an occasional shift as a caterer in Atlantic City. The shifts help him stretch his benefit money to the end of the month. But they aren’t guaranteed — and there are weeks and months when the loss of that extra $100 means he can’t buy basic items like shampoo. He also has to be careful not to work too many hours, because the extra income could jeopardize his benefits, throwing his entire budget into limbo.

“I wake up every morning and I’m just like how long, how much further can I crunch this budget just to be able to live here?” he said. “And now that I have to report my income in two months, am I going to be able to handle it? Probably not. [So I will need to] dig up money from somewhere — family, knock on their door if they have it. I’m too embarrassed to ask friends for help, so what do I do? I don’t eat. That’s what I do. Or I just make sure I have plenty of socks. Or I don’t drive my car for a while.”

But avoiding driving isn’t an option in central New Jersey, because access to buses and trains is limited and they cost money, as do taxis and ride-share services. The lack of a car, therefore, makes getting to Kulas’ doctors more difficult.

“I still need to get to my doctors,” he said. “I’m very fortunate that public transportation picks up right [outside my apartment complex in East Brunswick] and takes me to the New Brunswick train station. But then I have to stay at that New Brunswick train station for about 15 minutes to half an hour to wait for the next train or bus.”

That may take him to another bus or train. “If I were to take public transportation,” he said, “it would take me about an hour and a half.”

Kulas said people like him are trapped. They can’t build the savings necessary to move out of subsidized housing, because they’re limited in how much they can work and how many assets they can accumulate — something the ALICE report makes clear.

“When families do not have enough income to cover current expenses,” the report said, “they cannot save, and without savings, they cannot generate returns that improve a household’s well-being over time. The lack of savings limits an ALICE family’s ability to make a down payment on a house, for example, even if the monthly mortgage payments would be cheaper than renting. It limits their ability to invest in the future, such as in higher education or retirement savings. The lack of savings also leaves ALICE households vulnerable to unexpected economic events and emergencies. Savings and other assets are at least as powerful as income in reducing material hardship after an involuntary job loss or other negative event. Without them, families with income below the ALICE threshold often find themselves in a vicious cycle of financial instability.”

This can affect families for generations, said Kiran Handa Gaudioso, chief operating officer for the United Way of Northern New Jersey.

“The lack of savings underscores and contributes to generational poverty, and certainly the [lack of] opportunities for mobility,” she said. It affects their housing options, their credit, their transportation — unless they are willing to pay exceptionally high interest rates.

“We’ve been hearing from a lot of folks that they don’t have the $35 application fee for some of the apartment complexes,” Gaudioso said. “So not only is their credit compromised, but they also don’t have the cash to go through the application process.”

People living in these circumstances tend to indefinitely delay things like entertainment expenses or attending to non-urgent medical issues. They also may need to skip bill payments or attempt to juggle among more necessary expenses. As the Federal Reserve reported, one in six people in the United States is likely to skip payment of some bills because they lack the money — a number that rises to about three in 10 if an unexpected expense is factored in.

Lydia Rainbow, a West Orange resident in her 70s, has experienced financial ups and downs and now lives on a fixed income in federally funded housing. While her rent is fixed at 30 percent of her income, she still struggles, especially because she is saddled with large medical bills, bills that she may need to cover by borrowing. She gets Medicare and Medicaid, but they don’t cover everything.

“This country is terrible,” she said. “Here they won’t cover hearing aids. Medicare won’t cover any dentistry. [It won’t cover] a lot of medicines.”

“I have IBS (irritable bowel syndrome). I have been recommended medicine for it. We’re talking three, five thousand dollars. For 30 days. And they have these commercials which they’re making a fortune on. And you go and hear about Canada, Europe. [In the United States] they’re not taking care of us at all. Democracy? No, it’s called capitalism. It’s called take. And this is what I resent. I can’t do anything. I have hearing aids. I had to pay that out. And I think they’re not going to last.”

She obsesses about her teeth, she said, hoping to minimize the need for dental work. “But there’s only so much you can do. I have a condition called dry mouth and there’s nothing I can do about it. I can’t prevent the cavities. So aging costs, and for seniors? It’s difficult.”

She earns maybe $25,000 a year — “poverty level,” she says.

“Thank God for these programs that let you pay in installments without interest,” she said. “Of course, if you don’t meet that two-year deadline, you’re going to pay that [interest] charge.”

“I’m always struggling,” Rainbow said. She comparison shops because she doesn’t have a choice, uses coupons as much as she can.

“I haven’t been on a vacation,” she said. “I don’t do shows, I don’t do anything. It has to either be on sale, or a coupon, because that’s how I live now. I’m not rich enough to say ‘who cares’ if I overpay. I have to save.”

This kind of juggling affects more than just struggling adults. Children and other dependents are affected as well.

“If I wanted to do something extra with my son,” Lizette Thomas said, “if I wanted to take him to Six Flags, and we need money to eat or money to buy any little souvenir or whatever there is there, I will have to not pay a bill, in order to go there, because I don’t have extra money.”

“Every single penny is accounted for,” she said. “And you know, you have to pay the rent, you have to pay car insurance, [utilities], the cellphones, gas for the car, food, clothes for my son, my mom, medication, you know if I have one or two extra bills, and it just goes on and on and on, and there’s no — I really have no extra money. I literally live paycheck to paycheck. So, yeah, it’s very, very difficult.”