I read this article a week ago about a family in Nebraska unable to live on $150k/year in Omaha, Nebraska. This sounds crazy to someone who makes a bit less than that and can save for retirement living in the ridiculously expensive Northeast. Sure they have 4 kids, but I know a lot of people out here living on less with that many kids. They are "barely" scraping by but at least have no CC debt.
Sure they lost the husband's income of $84k/year but that should have been purely saving money, in my opinion. They have cut all extraneous spending, but have a horse. Which costs around $200-$300/month. That's not a huge deal to force them to live paycheck to paycheck.
What really is causing pressure is carrying to rental properties without tenants. There affordable primary residence mortgage + two rental properties probably put them way over the 28% PITI mark and is what is causing the real hardship. But the family refuses to face up to the fact that they aren't landlord material. The carrying costs of homes without tenants is huge.
The reality is that they would be rolling in the dough if they dropped both rentals. They could easily afford luxuries because their mortgage and fixed costs are not high. But they choose to scrape by because they are unable to let go of the dream of landlording. They are not successful in their business ventures, yet they don't cut their losses and bail.
This seems to be the problem for many people. Facing the reality of their debts. For this couple I think facing the money loss solution is even tougher because the husband lost his job and is trying to make a new career of landlording. I wonder how they shall fare in 6 months?