On Ice Dams and the Poor

Last updated on: February 10, 2014 at 11:17 am by Jane the Actuary

On Ice Dams and the Poor 2014-02-10T11:17:00-06:00 Jane the Actuary

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Somewhat off-topic releative to anything anyone’s been talking about lately, but:

I just wrote a $590 check to the men who melted and removed the ice dam that was causing water to drip through the bathroom window into the house. We don’t know whether there’s further damage inside the house or not, nor do we really know what kind of further roofing repairs may be required. (What’s more, we don’t really know what’s going on that we seem to be getting tons of icicles this year, which we aren’t accustomed to.)

On top of last week’s ER bill, that makes two unexpected expenses in fairly short order. And I still need to get the mini-van into the shop, since the power sliding door isn’t working any longer.

Now, I’ve said on various occasions that we live well below our means and save quite a bit of our pay, though (as a result of growing up in a frugal family) it feels sometimes that we’re more profligate than feels right (though I can hardly blame my husband for buying lunch in the cafeteria every day when he’s the one who spends frequent nights logged on working). When our salaries were more modest, we dilligently tracked our spending, and meals out were a rare treat, and when I was a grad student, I tracked my spending obsessively and spent even less. In any event, it didn’t really put a dent in our bank account to have these unexpected expenses — and one might say that they’re not truly unexpected, as one knows that, in general, home repairs and car repairs and gash-in-the-head repairs will periodically happen, though with no predictable timing.

But if you’re living paycheck-to-paycheck, these sorts of expenses are far more disruptive — and far more costly, if an unexpected home repair leads to a payday lender, or an unpaid electric bill, or leads to simply not getting the repair done at risk of further damage, or leads to attempted DIY repairs that do more harm than good.

Which means that, ideally, even paycheck-to-paycheck families should curtail their expenses even further, to the point that they’re able to build up an emergency fund.

But it also means that most families with low incomes, unless they have a good general handyman knowledge, probably should not be homeowners, even though generations of politicians have aimed at extending this “American dream” to the poor.

And it also calls into question the concept of high-deductible health insurance plans as a good option for low-income, low-savings families (as opposed to the frugal), at least, unless providers are willing to cut deals with long-term payments plans to make good on the dedutible. Yes, as an actuary I know well that they’re a good deal in terms of the cost of the premium vs. the long-term average expected value of the plan — but only for someone who can manage the cost of the deductible.

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