Looking back, the financial lives many Americans enjoyed until just a few years ago can seem like a mirage.
On a suburban cul-de-sac northwest of Atlanta, Michael and Patricia Jackson are struggling to keep a house worth $100,000 less than they owe. In a small town in West Virginia, Michael Bobic, who last year lost his job as a college professor, sells Star Trek collectibles on eBay to get by.
Their voices and those of many others tell the story of a country that, for all the economic turmoil of the past few years, continues to believe things will get better. But until it does, families are trying to hang on to what they've got left.
The Great Recession claimed nearly 40 percent of Americans' wealth, the Federal Reserve reported last week. The new figures, showing Americans' net worth has plunged back to what it was in 1992, left economists shuddering while sharpening attention on the pocketbook issues at the center of the presidential campaign. But for families across the country, the report, tracking the period from 2007 to 2010, confirms what they already felt in their gut and saw in their checkbooks. It is one more reminder that they're not alone.
Most of the wealth was lost to the mortgage crisis and the drop in home values, wiping out equity many families counted on. But incomes and stock-based retirement accounts fell, too. In the 18 months since the Fed completed its survey, home prices have continued to fall in many cities, while stocks rose and then fell back to nearly the same level.
"There's nothing in this report that makes me feel good," says Alicia Munnell, director of the Center for Retirement Research at Boston College and an economic official in the Clinton administration. Bubble-inflated housing wealth was a fiction whose end should have been expected, she said, but the drop in incomes is especially troubling, because it gives people even less flexibility and confidence to save for the future. "There are signs of improvement, but I think that everybody is scared."
It's not just plummeting wealth affecting Americans' financial psyche. Incomes have been stagnating for years. But until the bubble burst, lenders and credit card companies gave consumers freedom to borrow and spend. No more.
Americans "were told they were much wealthier than they really were and they believed it," says Robert Manning, author of the book "Credit Card Nation" and an expert on consumer finance. "Now they're kind of hearing they're a lot less wealthy than they believed -- and they're in denial."
Kathy Miller recalls when the finances of work and family life were adding up just right.
In 2008, her events planning company was having its best year ever. She and her husband had set aside money to put their two sons through college, with enough left in income and savings for "a very nice life" in Schaumburg.
Then the financial crisis sent the stock market tumbling and many of the corporate customers who had kept Miller's Total Event Resources busy, stopped calling.
By the following year, business was down so sharply that Miller laid off 10 of her 15 employees. For four to six months, the rest worked only for benefits. Miller didn't collect a salary for a year-and-a-half.
The business wasn't all that suffered. The value of the Miller home in Hoffman Estates fell almost 30 percent. She'd been counting on the house to fund part of her retirement.
The family was forced to dip into savings to cover living expenses and the drop in stock prices took more from their nest egg.
"We've lost one kid's college money," she says. So two years ago, when her older son was half-way through Illinois State University, Miller and her husband told him he'd have to pay for his last two years of school. They told their younger son he would also have to pay for his last two years.
Add it up now, Miller says, and her net worth is just half what it used to be.
"All of a sudden, you wake up and on paper, it's completely different," she says.
Business has rebounded to the point where Miller now has seven full-time and two part-time staffers. Old clients have come back, and she has new ones. But revenue is still down 20 percent. The family has adjusted their plans and expectations accordingly.
In Miller's kitchen, there's a door to nowhere. It was supposed to open onto a deck that hasn't been built.
Vacations are shorter -- a maximum of five days instead of two weeks. Money is one reason. But "being away from the office is more difficult because we're doing more with less."
When shopping, Miller asks herself, "Do I need this jewelry or pair of shoes? No, I don't, because I'm thinking about keeping that money to sustain our business and make it work."
In New York, Michael and Patricia Jackson shared a bedroom made from a walled-in front porch, in a house cut into three cramped apartments. Then, on a visit to Georgia in 2000, they drove past spacious new homes and lawns in subdivisions promising affordability, and they began to dream.
By the time they moved in to their brick-face colonial in Marietta four years later, even bigger dreams seemed within reach. The house in the new Hampton Chase neighborhood cost a little more than $200,000 and values were rising fast.
With $20,000 in equity and two paychecks, the Jacksons were financially secure. What they remember most, though, is feeling proud. Their daughter had her own room. Patricia loved the "humongous" master bedroom and bathroom. Michael devoted himself to the lawn that sloped down to a thick stand of trees, working hours in the heat with a relish he'd never felt as a renter.
"This is what we always wanted, was to live somewhere comfortable and to be part of the community as well," says Michael, who is 53. "It made me a better man. I learned how to cut the grass. You know in New York you have one little patch of grass and you can take scissors and cut it."
The couple said they rejected countless offers to borrow against the house. Instead, they made plans to save and let equity build, hoping to eventually buy a vacation home near Patricia's parents in Jamaica and maybe even a small apartment in New York, for visiting family.
But in 2007, Patricia was cut from her job as a dispatch supervisor with a cable television company. Then Michael lost work as a contractor. They struggled to pay the mortgage. But they kept pace when their lender offered a forbearance plan that temporarily halved monthly payments, but added the balance to the loan, a fact the Jacksons say was not explained to them at the time.
They fell even further behind after getting into an accident on the long drive between New York and Georgia. Meanwhile, a foreclosure wave swept the metro Atlanta real estate market, sending home values down.
County appraisers recently valued the Jackson's home at $166,000, but the couple say it probably would bring no more than $140,000. They are 11 months behind on their mortgage payments and, with penalties added, now owe $245,000 on the house.
Michael says they were naive. They tried filing for personal bankruptcy, which confronted them with the fact that they'd already lost their equity and would probably lose the house. So they withdrew the filing and decided to battle it out. They dropped cable, stopped taking clothes to the drycleaner and Patricia cut out tithing to the church.
Both found new jobs and the lender has cut the interest rate on their loan. But they are so far behind on the mortgage that the lender tells them they can't qualify for government programs to help families stay in their homes. The Jacksons, who long ago shelved fantasies of vacation homes, now are desperate to convince someone they are worthy of keeping the house on Hampton View Court.
"We're scared. We don't know what's going to happen," Michael says. "Right now, our main thing is to hold on to what we have. I mean, we're holding. But the mortgage company, they have a grip on us."
For 13 years, Michael Bobic taught political science to college students. Now he sells Star Trek collectibles on eBay and teaches a fencing class at the YMCA to help pay the bills.
The 49-year-old drives only when he has to, shops around to save 50 cents on a gallon of milk and hasn't bought a restaurant dinner since losing his job as a professor at West Virginia Wesleyan College last year.
"I'm incredibly cheap," Bobic, who lives in Fairmont, W.Va., says proudly.
Once a week, Bobic spreads his gospel of frugality, teaching a money management class at Galilean Baptist Church in nearby White Hall. Growing up in Kingsport, Tenn., Bobic recalls that as his parents divorced and later remarried each other, their financial lives swung wildly. Their son learned to prepare for the financial uncertainties of his own adulthood by watching.
He tells his church class to do what he did -- have an emergency fund to cover three to six months of expenses. When Bobic lost his job, he was prepared. Enrollment had been shrinking and he knew Wesleyan couldn't afford an extra professor with two already tenured.
To get by, he took short-term work doing title searches for a lawyer, until the two-hour drive to Moundsville proved too much. Then he got a temporary job doing surveys for an opinion-research company. But a year later, his financial cushion is gone.
Bobic has always worked -- he turned his first full-time job scooping ice cream into a 15-year career in store management. But this week he did something he'd avoided: For the first time since his kidneys failed at age 23 and he began dialysis, Bobic applied for disability benefits.
"I'd much rather work," he says. "But that's what we're falling back on now."
Bobic's retirement account is gone. He cashed it out to buy a house in 2008 when he quit a 10-year job at Georgia's Emmanuel College and moved to Fairmont so wife Jennifer could be near family.
Until he lands a job, Jennifer is funding their retirement, putting aside money from her job with the Social Security Administration.
Bobic keeps close track of their financial well-being. When he lost his job, 42 percent of the couple's income vanished, he notes. He'd limited the mortgage to 25 percent of their lesser income, but now it eats up 32 percent of the total. Even now, though, he's working on a plan to rebuild.
Within two months, Jennifer's car will be paid off, and they can start to replenish the emergency fund. Bobic, meanwhile, is hoping to land a teaching job at a university in southern West Virginia.
Moving there would mean selling the house and hoping to break even. Worse, he says, it would take Jennifer two hours from relatives now just 10 doors away.
Maybe, Bobic says, he'll work through the week and come home on weekends. He did it before in Georgia, sleeping in his office on a fold-out Army cot and showering at the gym.
It's not so bad, he says.
"You'd be amazed how many people are doing it."
Long after Main Street goes quiet, Mike Lamm is still at the back of his jewelry shop, surrounded by tools. There'll be no more customers until the morning, but that does not mean the job is done.
"If I had to rely on retail sales out of my case, I'd have had to close my doors a long time ago," the 48-year-old businessman says.
These days, people aren't buying much jewelry. What saves Lamm is his ability to repair watches and make rings. There's still enough call for that kind of work in Mediapolis, a small town in rural southeastern Iowa.
Things have always been tight for the Lamms, who Mike describes as a family of "modest means." But like many of their neighbors, it's become more of a struggle over the past five years. At this hour, Mike would rather be home with wife Tracey and their two children, Ethan, 16, and Raeann, 11.
But there are groceries to buy, cars that need gas, and a mortgage to meet, says Tracey, who works as a grant writer for their regional government council.
"I feel like, for what we make, we should be doing better. We should have more money," says Tracey, who's 43. "But all of it just seems to go to bills."
Tracey estimates she spends $60 a week on gas, commuting to work. Mike, who uses a wheelchair after losing use of his legs in a car accident at 17, spends about the same for van that operates with hand controls.
Utilities and groceries at the one market in town also have risen 10 to 15 percent a year since the recession hit.
"And when you feed a teenage boy, you're automatically at a different level," Tracey says.
Other things, however, have had to go by the wayside.
The last family vacation -- the only week away together Tracey can remember in years -- was a trip to Disney World in 2009. But those trips are no more.
Now they rent a video and have a family night, or the kids go to their grandparents' farm for a "getaway."
This isn't all bad, Tracey says. Their kids are learning to value what they have. "They don't seem unhappy or deprived and they certainly know how much they're loved," she says.
But that doesn't stop the worries.
Even working 65 to 75 hours a week, Mike is bringing in less than he did last year. They have little saved for their children's college.
But they hold on to hopes, if not for themselves, then at least for their kids.
"I think it will get better," Mike says. "It's just going to take time."