Lori Smith never worried about losing her job, an empty savings account or being unable to provide for her family. “I was close to the top of my …
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Lori Smith never worried about losing her job, an empty savings
account or being unable to provide for her family.
“I was close to the top of my field in high-level management
with several titles attached to my name — vice president, assistant
vice president, associate,” said Smith, a former mortgage finance
professional, who asked to remain anonymous. The Castle Rock
resident’s name was changed for this article.
Since being laid off in October 2007, Smith has emptied her
savings account. The severance package she received was stretched
out over nine months and is gone.
Her husband, who is 20 years her senior, was forced out of
retirement and now works as a security guard, making $11 an
In September, she filed Chapter 7 bankruptcy and quit making
mortgage payments on a 3,300-square-foot, $500,000 house that’s now
The Smiths have faced other lifestyle changes, too.
Red Lobster has been replaced with McDonald’s; Hummers with
average cars and groceries are bought using “tons and tons of
coupons,” she said.
As the nation’s financial crisis continues on a downward turn,
an increasing number of Americans are feeling the effects on the
Such is the case for Littleton resident and newly elected state
Sen. Linda Newell. Newell, a single mom of two, was laid off from
her business consulting firm last March.
Her senator’s salary of about $30,000 is the first full-time
income she’s had in 10 months.
“I go grocery shopping less and buy most things on sale,” Newell
said. “I know what it feels like to wake up and wonder how I’m
going to get three more meals out of my fridge when there’s only
one in there.”
Like Newell, Smith has started counting her pennies at the
grocery store. Where she used to spend around $600 a month, now she
spends less than $250. And the “Grocery Game” has become a saving
The Grocery Game is a Web site that works to save shoppers
hundreds of dollars on grocery bills each month.
When you play, you get a weekly list — called Teri’s List — of
the lowest-priced products at your supermarket matched with
manufacturers’ coupons and weekly specials — advertised and
“I use the Grocery Game every single week and am slowly stocking
up. We haven’t changed what we eat, I just buy everything on sale,”
Smith said. She estimates she saves about 64 percent on her grocery
Although her family isn’t on assistance like they were during
the Savings and Loan crisis in the late 1980s and early ’90s,
Newell’s credit cards are nearly maxed out, and she won’t be able
to pay them off until next summer when the legislative session is
over and she can get back to consulting.
“I understand what it means to watch the dollars at the grocery
store, and struggle to buy clothes for your kids,” said the
senator, who brings home a modest income of $2,500 a month.
After signing up for the state’s benefits package, her wages
have dropped by a few more hundred dollars — and neither of her two
daughters are covered under the plan. She’s hoping her daughters,
ages 18 and 20, can get some sort of coverage from their colleges
Newell also is on the Health and Human Services committee at the
state Capitol, trying to help find solutions for many other
Coloradans in her financial position.
Smith is in the same boat.
After having carried all the family’s insurance, she’s now
covered under her husband’s plan, and only one daughter has health
insurance through employment at Starbucks.
Unfortunately for Smith, she has a pre-existing medical
condition that requires her to see a specialist every eight weeks.
Each visit costs her between $200 and $300.
According to the U.S. Census Bureau, 18 percent of Coloradans
lack health insurance. About 37 million workers across the country
were uninsured in 2007 because many employees simply couldn’t
afford their share of a health insurance premium.
As for college tuition, Newell is hoping for scholarships and
Newell, who calls herself “financially prudent,” says she’s
always been conscientious of ways to save money, but saving for
college simply isn’t an option.
“I can’t save because I don’t have it,” Newell said. “It’s hard
to regret because I’m doing the best I can.”
Smith’s youngest daughter, who racked up a $14,000 student loan
to attend the Ohio Center for Broadcasting, is now paying back her
That wouldn’t have been the case two years ago for Smith’s
daughters, who had the luxury of having most of their expenses paid
Smith’s oldest daughter, who’s getting married in June, is
paying for her own flowers and photographer.
The wedding dress was “hugely discounted” and Smith plans to buy
the cakes from either Costco or Walmart.
“We’ve learned you’ve got to be happy with what you have, and to
cut out the extras,” Smith said. “When my husband and I got
married, we didn’t have all these things and we were as happy as
could be. So how important are these things?”
After that small epiphany, Smith began selling off items like
dining room furniture, an oak pool table, collector Disney movies
and a Sony HDTV to help supplement the family income.
She’s selling her TV to her hairdresser for $300 because it
“won’t fit in a rental home,” she said.
“The plan is to land a job in health care by March and find a
rental house,” she said. Smith is attending Concord Career College
for a certificate in medical billing.
“We always said if something happened to my income we’d be in a
lot of trouble,” said the primary bread winner of the family.
She lost a six-figure income that year — $114,000 to be
In 2007, when the housing market began to crumble, Smith’s
branch of UBS Home Finance was shut down. UBS was the 179th
mortgage company in the country to go out of business, according to
The Mortgage Lender Implode, which tracks the implosion of the
housing finance sector.
Today, there are 326 mortgage companies that have gone out of
business nationwide since 2006.
“I was on the front lines and got to experience how these
companies pushed loans when they couldn’t really guarantee them,
which is really what the downfall has been in the industry,” said
Smith, who evaluated risky loans and conferred with “people on Wall
Street” about purchasing them.
That downfall led to Smith’s layoff in October 2007.
One year and four months later, Smith is in her second week as
an intern at a medical office, working the front desk, checking in
patients and collecting and processing co-pays.
“I’m almost done with schooling, and once I’m gainfully employed
that will be another relief,” Smith said. And finding a rental home
will be her “third and final relief.”
“I believe that there is opportunity in crisis,” Newell said,
after having lived through a lay-off, the loss of her mom and a
rigorous campaign for the state Senate all in one year.
“I can’t get upset because all my hardships have set me up to be
in the position that I am,” she said.
“But it is hard. You do have to watch your pennies. And the
irony is that while I’m trying to budget $2,500 a month, when you
look at the state’s budget, we’re just as poor at a state
Smith also has come to learn there is a silver lining.
“I really don’t miss the high amounts of stress I had with my
job,” she said. “I was working 60-70-hour weeks, and bringing work
home with me,” she said.
“I’ve gotten to connect with my family again,” Smith said. “ I
just want to land a job in March. The rest I’ve made peace
“I understand what it means to watch the dollars at the grocery
store, and struggle to buy clothes for your kids.”
State Sen. Linda Newell
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