Laura Rowley has put together a handy list of the personal-finance lessons to be learned from NYT writer Edmund Andrews’ harrowing saga of mortgage disaster—told in his new book, Busted: Life Inside the Great Mortgage Meltdown, and in an NYT mag article last Sunday. They’re all good lessons: Budget for the worst-case scenario, Know what you can afford, Call your bank and ask them to cut you off in the event you attempt a debit or ATM transaction and the account has insufficient funds. You know, stuff like that.
But I read a few large chunks of Andrews’ book a month or so (I had a galley), and the main personal finance lesson I drew from it was, Don’t ever get divorced.
This was partly a result of the way I read the book. For some reason I started somewhere in the middle. Andrews was describing his and his wife’s difficulties in making ends meet, with details on exactly how big the bills were that they were having trouble paying. I did a little calculating in my head, and thought, Wow, I had no idea the pay was so low at the NYT. As I read on I finally figured it out. His salary at the NYT was fine: $120,000 a year. But he was paying out $4,000 a month in alimony and child support. That knocked him from affluent to what for Silver Spring, Md., where he and his new wife chose to buy a house, counted as downright poor.
Because their house hunt happened to transpire in 2004, the Andrews-Barreiros were able to borrow $414,000 anyway, and it is this crazy loan that creates much of the personal-finance drama in the book. But the proximate cause of Andrews’ fall from affluence was divorce.
As for his book, I haven’t read from beginning to end so I can’t give a full review, but the parts I read were compelling, charming, and seemingly very honest. And the part where Andrews is interviewing Alan Greenspan about mortgage lending and lets slip that he has a subprime loan is pretty funny.