September 7th, 2011
Financial Tips for a Congressman With a Six-Digit Salary
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Believe it or not, Congressmen have a hard time paying their bills, too.
You may remember the video of Rep. Sean Duffy of Wisconsin talking about his budget woes. He readily admitted that, even with his six-digit salary, he’s “struggling.” While the 45-minute video of the public townhall has since been removed from the internet, TPM retained a one-minute clip, in which Rep. Duffy specifically speaks to his struggles. Here are the bullet points:
- Duffy makes $174,000 per year, not including benefits.
- The congressman supports six children and a wife.
- He claims to have more debt than anyone at the townhall.
- He’s still paying back his student loans.
- He drives a used minivan.
And here’s a breakdown of his debts, based on a 2009 disclosure form he had to file with the government. (Keep in mind that he only had to report broad ranges, not specific amounts.)
His household has
- between $250,000 and $500,000 in mortgage debt
- between $50,000 and $100,000 in student loans
- between $15,000 and $50,000 in credit card debt
- between $100,000 and $250,000 in debt related to the family vacation home, a cabin relatively close to the family’s primary residence in Wisconsin
His homes are valued at $247,000 for his primary home and $229,000 for his vacation home.
What he’s doing right:
He’s saving his family money in a weird way. Most of us can’t beg our bosses for the right to blow up an air mattress and crash in the office. But for 21 freshman members of Congress, they do just that. Duffy is one of the freshman members of Congress who doesn’t pay rent or parking costs in D.C., saving over $20,000 per year. Fortunately, Capitol Hill has a shower in the gym.
He doesn’t spoil his kids. Considering Duffy’s a member of Congress, you may think he would spoil his six children. But the facts of his lifestyle say differently. His family lives in a five-bedroom house, meaning at least four of his kids share bedrooms with another sibling.
He’s being honest. Maybe Duffy is mismanaging his finances, but he deserves at least some respect for being honest about them. I’d venture to say that’s more than most Congressmen.
Where he needs to get a clue:
He can’t afford his vacation home. Although now might not be the best time for Duffy to put his $229,000 vacation home on the market, he could think of other viable ways to make money off of it, such as airbnb.com or HomeExchange.com, which could help pay back some of his debt.
His credit card debt is out of control. According to the latest Credit Karma data, the average consumer has $6,355 in credit card debt. Duffy is in debt at least twice as much, if not more (depending on whether he’s closer to $15,000 or $50,000 in his credit card debt estimate). He should start paying down that debt as soon as possible, as the interest rate on his credit card debt is likely much higher than that of his student loan debt. Duffy should use a tool like ReadyForZero to manage his credit card debt payments.
His wife spends too much money. One of the most outrageous findings about Duffy’s family finances is his wife’s video talking about her annual holiday sushi parties. (You can find the video at the bottom of this TPM article.) Now, this doesn’t prove that the Duffys are extravagant in other ways, but it certainly gives insight into some potential places they could cut back expenses. If Duffy wants to relate better to his constituents, perhaps he should use a tool like Bundle to find out how similar families spend their money and where his household can cut back on spending.
Bottom Line: Duffy isn’t the only person who needs some financial lessons; we could all use a trip to “Money 101” class. But he’s in the public eye, and unfortunately that leaves him and his finances vulnerable to our criticism. But before you criticize too harshly, take a look at your own finances. Where are you doing well? Where can you cut back?
Have a Karmic day,
Bethy Hardeman, Social Media Maven