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People Have Nothing Left — Literally $0 — Because Of The Pandemic

Even people who built rainy day funds over years are watching their savings run down to zero, with no relief from the government in sight.

Posted on October 22, 2020, at 10:06 a.m. ET

BuzzFeed News

When 2020 began, C. Adams started a new job at an engineering firm that paid $65,000. He had already downsized to a three-bedroom home in Georgia to help save for his two teenage daughters’ college funds. Expenses were manageable. When the pandemic began, he had $5,000 in savings after taking care of his late father and his debts. It wasn’t a lot of money, but it was something his family could fall back on, a sense of security.

He never expected it would all be gone so soon.

Adams hung on to his job longer than many, through March, April, May, and June. But the virus was far from under control, and in July he became one of the country’s millions of unemployed. His wife supported the family doing sales at a nursing home, supplemented by the $375 a week Adams started getting in unemployment benefits — but it wasn’t enough. Their monthly expenses for housing, transportation, and other basic needs exceeded what they were bringing in. The payments on a car Adams got when his old one broke down at the start of the year were depleting their funds quicker than he had planned for. By autumn, there was nothing left.

“We have no savings. I still have no job,” said Adams, who asked not to be identified by his full name. Acknowledging his privileges, he said he still can’t make ends meet: “I'm an educated 43-year-old white man that cannot provide for his family.” His solution: keep looking for jobs. “Hopefully a job comes through. There's nothing [else] to do at all. It's just a matter of something coming through.”

Three white people holding "black lives matter" signs
Courtesy C. Adams

Adams (right) with his family

As the coronavirus pandemic creeps toward its eighth month in the US, millions of Americans are coping with an economic catastrophe that they couldn’t have planned for; some like Adams have watched their account balances run down to zero. Working people who cautiously adhered to advice to save enough to cover three to six months of living expenses, a so-called emergency fund, are being decimated by a crisis that is dragging on far longer than that. Some have lost their homes.

They face the unsettling reality that no matter how hard they try, their ability to make it out of this is mostly out of their hands. There’s a belief that people can achieve financial security if they just work hard enough, that being poor is a kind of moral failing. But the crisis has shown that this is a myth. People are realizing now what those in precarious situations have long known: that so much of it is out of your control.

As we wait for a vaccine, it’s not at all clear who will assume responsibility for getting people who are struggling through to the other side. The first round of stimulus was passed in March, and Congress has repeatedly failed to reach an agreement on a second round, even as Federal Reserve Chair Jerome Powell argues the risks of the government overdoing relief are low, as the funds would facilitate a stronger and faster recovery.

Sen. Elizabeth Warren told BuzzFeed News, “The federal government must step up now and make needed investments to lift up all of our communities, like canceling student loan debt, halting consumer debt collections, extending and expanding the evictions moratorium along with rental relief, increasing social security and disability checks, and putting in $50 billion to bail out childcare providers.” Warren called for Congress to provide relief to avoid families falling into bankruptcy and losing their homes through foreclosure.

BuzzFeed News spoke to people around the country who saved several months of their typical living expenses and watched their balances draw down to nothing. For many, life got messier than they had accounted for. On top of unemployment, several had unexpected medical, auto, or other emergency expenses that consumed most of the cushion they were counting on to weather a period of unemployment. Several were among the millions of people around the country waiting on delayed unemployment benefits as they looked for new work. A few are now relying on their credit cards. A number are selling belongings for cash.

They realized in the harshest way that their money wouldn’t last nearly as long as they thought it would. Not knowing when this will end is a huge concern, they said. Most were just planning to get through the week. No one was clear what they were going to do after that.

“An emergency fund is meant for an emergency, but there’s a reason it’s not called a pandemic fund. It’s generally not meant for six-plus months of massive uncertainty,” said Chantel Bonneau, a wealth management adviser at Northwestern Mutual.

Saving for an emergency is especially difficult for people with low incomes. A Bankrate survey this summer found only 1 in 4 people have enough savings to cover six months of expenses; 27% had less than three months worth of savings; and 21% had no emergency savings at all.

Sen. Bernie Sanders said to BuzzFeed News, “As a result of this horrific pandemic, tens of millions of Americans are living in economic desperation not knowing where their next meal or paycheck will come from.” Sanders criticized Trump and Mitch McConnell for “ramming through an extreme, right-wing Supreme Court nominee,” when “we should be focused on making sure that everyone in this country has enough income to pay for the basic necessities of life.”

Adams is feeling the pressure and said some politicians “are like, why don’t you go out there and get it? But there’s nothing to go out there and get … It's weird to have a good résumé, but then it doesn't matter.”

Courtesy Ruelyz Andujar

Ruelyz Andujar

In Boston, Ruelyz Andujar had about $15,000 saved from working as a makeup artist at a popular high-end salon. “My grandmother has always taught me to save money. And I'm really good at saving money, because I've been responsible for taking care of my entire family since I was 16 years old. I have to always have a cushion,” said Andujar, 32. “But savings run out, especially when you're taking care of everyone.”

After being laid off, she now earns a fraction of the $4,500 a month she used to make. The hourly rate at the new salon where she now works is lower, and she has fewer hours. But she and her husband must still support her daughter, mother, grandmother, and — since the pandemic — her brother as well. Her $15,000 is nearly gone, down to about $2,300.

She also has been negotiating with a collection agency and her insurance company over a $13,000 medical bill for an emergency knee surgery in February, just before the shutdown.

Andujar has no problems cutting back and rebudgeting — she’s done it her entire life, she said. “I can live with the bare minimum … If we don’t have electricity for a few weeks, then so be it,” she said. “But I am definitely running on edge. … I've never had this many meltdowns where I think I'm losing it. I've never had to plan so much for the inevitable without having any idea of what's going on. I'm a planner, but at least I need to know what my options are.”

For now, she’s trying to teach her 5-year-old daughter what she learned from her own grandmother: If you have $10, spend only $3 and save $7. “That's just how I think it should work. I'm a very realistic parent,” she said, and right now, the world is not an easy place to survive.

Parents with young children are in especially precarious situations. “We've slowly watched ourselves go broke,” said Victoria, a 25-year-old mother of four children under the age of 6 in a suburb of Charlotte, North Carolina. “We had set ourselves up for what could have been a decent life, and we've watched it dwindle away.”


Victoria, who asked that her last name not be used to protect her privacy, said she and her partner had arranged their lives so she could be the primary caregiver for their young children, and he’d find work with flexible hours so he could help when necessary. “I couldn't put them in daycare, because it took so much of my money that it wasn't worth it,” she said. The plan was to live simply and keep costs low.

After her youngest child was born, she left her job as a fraud representative at a financial services company in 2019. Victoria had paid cash for her mobile home so there was no mortgage, just a $300 monthly fee for the land it was on. She cashed out her 401(k) to pay off their car, medical bills, and other debts. Her partner would work for Postmates for the time being. And they had $8,000 in savings.

Courtesy Victoria

Victoria

But things didn’t go as planned. Working for Postmates, which was never an easy way to earn a living, was no longer viable in a pandemic. The weeks her partner did try to work, it disqualified him from collecting his weekly unemployment benefit of $131. Then the car broke down: $1,200. The stove went out: $800. The air conditioner broke. “It’s just been one thing after another,” she said. In October, when most of their money had already been spent, their fridge stopped working. They replaced it with a used fridge for $150, the very last dollars they had, bringing their account balance on Oct. 9 to $0.

Now, they’re asking for extensions on various bills, borrowing money from family, and putting expenses on their credit card.

It’s hard for Victoria to see her family in a position she promised herself they wouldn’t be in. “My parents struggled to put food on the table on a regular week,” she said, so when her first child was born, “I knew that I couldn't put her through what I had gone through. Because there were times I was in the cabinet to get something to eat, and there was nothing there. And my parents didn't try to change that. I remember moving from house to house because we would be evicted so regularly, and I just wasn't gonna let that happen. So I saved everything I could.” But the pandemic upended all expectations.

Sometimes Victoria thinks back on how she tried her best before COVID and how hard the path toward upward mobility really is. The family had moved to Fort Mills for the schools but had less money than the others in her daughter’s class. “At Christmas, she got the Walmart version of an American Girl doll,” she recalled, “And one of her friends told her it was fake.” The holidays will be exponentially harder for so many families this year.

When Victoria reflects on her decision to leave her job, “I feel terrible,” she said. “Hindsight is 20/20, and if I would have known that this was going to happen, I for sure wouldn’t have quit my job.”

She said she urgently needs help from her government, but her expectations are low. “They're in the White House right now, and they've never known what struggle was. They've never had to wonder if they were going to be able to feed their children, or if they were going to be able to keep their lights on.”

Courtesy Cathryne

Cathryne

In Orlando, Cathryne, a 24-year-old mother of two, was laid off as an event planner at the end of March; six months later, she has yet to receive unemployment. “It's just been pending; it's been pending the whole time,” she said. “Every day, it's a three-hour wait, or you get on to the phone call and they hang up on you and you have to start that whole process again.”

As Cathryne waits for answers from the Department of Labor and drives Uber for some cash, the family has been living on her husband’s $41,000 salary, but it hasn’t been enough. It’s not for their monthly housing costs: They bought a house this year, which brought down their monthly housing bill to $1,200 for the mortgage compared to the $1,700 they had been paying for rent.

But the $10,000 they had after making the down payment has been disappearing rapidly due to unexpected medical bills, which their insurance doesn’t fully cover, car payments, and other costs. By October, Cathryne had just $650 left in her account.

“I'm still looking for a job, and when it comes, if it comes to it, we will take out money in a loan,” she said.

Cathryne recently heard back from a restaurant job she had applied for, but the owner said due to low traffic, he couldn’t guarantee her more than eight hours a week. “Realistically, for my family, can I afford to work eight hours a week to pay $12 an hour in daycare? No, I can’t,” she said.

Courtesy Jonesey Harp

Jonesey Harp

When the film industry shut down, Jonesey Harp, a 58-year-old actor in Los Angeles, was grateful that she had $12,000 saved up. “For a musician and actress, that is like $100 million. For me, that was a lot of money. It wasn't easy. And it took some finagling to make that happen, including living with four people to save money to be debt-free,” she said.

She tried working during the pandemic. “I did odd jobs. I DoorDashed. I did anything I could,” she said. She made little money on DoorDash and decided to stop when she got a flat tire during a delivery. At that point, “I thought I'm done,” she said. But the numbers weren’t adding up. Her weekly unemployment check was $242. Harp had spent a good deal of money for her SAG union card. She still needed to make payments for her car, and her landlord was unwilling to negotiate on rent.

By October, her savings were down to $300. “That’s not even a car payment,” she said. “Now what do we do? Now you have to start selling everything you own.”

To get some cash, Harp left an heirloom watch at a pawn shop for an $800 loan. “It’s crushing to work so hard and have Washington act like we are peasants. They were supposed to be our representatives,” she said.


Even those who are still employed have seen their incomes fall below what they need to cover their expenses. Some essential workers, for example, still face reduced hours and pay.

In Illinois, 31-year-old Ethan had been devoting a lot of his salary as a music teacher to aggressively pay down his student loans from grad school and some old credit card debt. After putting away a couple of hundred dollars each month into an IRA, there was little left for savings. By early 2020, he had a $2,000 emergency fund.

Courtesy Ethan

Ethan

Ethan, who asked only to be identified by his first name, is still employed, but the pandemic means he is no longer earning the extra $5,000 a year he used to get for rehearsals after school, or the $7,000 for teaching an extra class, or the roughly $500 a month for private piano lessons. He tries to see the upside: how he hardly has to pay for gas anymore, how he isn’t spending money on supplies for his students this year. But moving out on his own in June after a breakup significantly increased his living expenses.

“I have had to transfer money from my savings each month to cover bills and groceries. My credit card balances are all creeping up slowly, and I keep accidentally overdrafting my checking account,” he said. Ethan is still trying to make payments on his student loans, but all but $118 of his savings are gone now. When he buys groceries, he only gets “the bare, bare minimum” — there’s little fresh produce in his cart — and never spends more than $50.

“It is making me think that I should have just sucked it up and stayed in the relationship I was in so I wouldn’t be in financial trouble,” he said.

The health insurance he gets through work doesn’t cover his mental health services. “I keep getting all of these emails from administrators and my boss being like, ‘Make sure you take time for yourself and do what you need to do to make sure that you have good mental health.’ But when push comes to shove, financially, it's still on us,” he said.

Ethan knows he is not alone — he sees his students struggle every day. “I work in a lower-middle-class, working-class neighborhood. A lot of the parents are single parents, and they’re all pretty much essential employees. ... I feel guilty when the students are not completing their work or they're not logging in, and I have to reach out and bother their parents about that, when I know the kids are at home watching younger siblings or the parents are dealing with the stress of having to work multiple jobs or full-time during a pandemic,” he said. One of his students tunes in to class from his mother’s workplace, a dental office. “Can you imagine getting a root canal and there’s a kid playing the clarinet?”

What frustrates Ethan, he said, is “the fact that the government has really downplayed this entire thing the entire time and been ignoring the financial struggle of people” who have lower-income jobs. “It’s been really upsetting.” ●

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