http://graphics.latimes.com/retirement-nomads/
A very sad tale for many folks. I don’t think people realize how many were put in dire straits from the recession. So many companies have removed pensions, and health benefits. Honestly something has to give. Right now we are facing huge medical bills just from a catscan! Yes we can pay it off, but even at our income it won’t be paid in full immediately.
Having to retire with consumer debt ($50,000 for the woman featured in the article) or being unable to retire because of consumer debt, is something I feared for a long time. For a lot of people, that’s the reality. Shivers.
They need to read Dave Ramsey’s Total Money Makeover.
Jeez.
I have an extended family member in this situation. It’s frightening.
I know someone in that position. They live like they have all the money in the world. Both drive new model luxury cars leased) shop at whole foods almost exclusively, go out every weekend for dinner and a movie or the theater. Woman has to have a new (expensive bag) every season, new shoes for every new outfit she buys - and can never buy anything that is not the “best” (meaning most expensive.) They just had to borrow $17k from a family member to pay their bills (everything possible is put on credit cards.) Even after borrowing the money their behavior has not changed one bit. When we are out together they never fail to order most expensive thing on the menu. Their behavior and attitude is a constant source of convo for H and I - who earn significantly less money and live well below our means, even though H will have a very lucrative pension when he retires in 4 years ( but he will do consulting.) this couple has told us they can never retire and both are in their 60’s already. Both have their own businesses but the nature of both means income is not steady but comes in spurts. As soon as money comes in it goes out.
What if people couldn’t get credit so easily? When I was a kid it was a Big Deal to have an American Express - that you had to pay off every month.
I agree with @emilybee about the frustration of seeing people make poor decisions. But is easy credit the crack cocaine of the financial world?
People look at us and probably think we’re nuts for sending our son to a state school on scholarship. But my husband and I have been rattled by some of the financial fiascoes we have seen personally.
Money problems are rarely about money.
@SouthFloridaMom9 - personally I’m not sure it was harder to get credit in the past. when I was growing up my parents had a MasterCharge (before it became MasterCard), but also had a department store card for every major store they shopped in (they only did it for the convenience of paying as my dad a CPA was diligent about paying off all accounts each month), but I remember wondering why exactly they needed so many cards.
As a college student, it was easier for me to get credit than it is now for my son, I had at least 3 credit cards as a freshman just on the virtue of me being a student with absolutely no income in my foreseeable future, now due to changes in laws, my son has to prove income or be a co-borrower to get the same credit that was just handed to me.
On the one hand, I’m exceptionally frugal so it’s hard for me to wrap my head around acquiring so much debt, but on the other hand I do know people that have issues managing money. I have a very good friend that went through a period of unemployment as a single mom a few years ago. While we were talking one day she mentioned that her daughter was going to be in a recital and she needed a new camera and really liked the one that cost just over $400??? I’ve never owned a $400 camera in my life, but who buys a $400 camera when their unemployment check is the only source of income in their home???
For those who have lived above their means for years, I have no sympathy. However, there are so many who didnt live above their means, and were gutted by the housing and stock market collapse in 2008. If you dont have a pension, and no one will hire you, what do you do?
^ I agree when it comes to the couple I know. It’s about projecting a certain status in their community and among their circle of friends. Most of their friends and family members don’t know they are broke. They think they are rolling in dough.
They just leased another Lexus a few months ago. I asked them why they didn’t lease a Honda or a Ford (I believe they cannot afford to buy a car outright and are stuck now leasing forever.) and she said, I can’t drive a car that doesn’t have this thing and that thing , blah blah blah and also told me the new deal isn’t costing anymore then old lease. Went over her head that regardless if it costs the same they can’t afford it!
She still has cleaning person once a week and goes for her mani/pedi once a week. She can’t even cut back on the little things. If I were the person who loaned them the $17k I would be apolectic.
@jrcsmom - what age group are you in? You’re probably close to mine - I’m in my mid 40’s. I remember my dad talking about American Express and what a big deal it was to get it, though he always paid it off. Maybe my parents were just more frugal by nature. We did not grow up with credit.
Now by the time I finished college in the late 80’s/early 90’s - whoa doggie. That’s when I first started seeing free t-shirts, etc. for signing up for credit cards. One card I got fresh out of college - I had for the next 15 years probably.
I got into trouble with credit cards in my early 20’s, and I’ve never forgotten how bad that was. Some people are more mature at that age than I was (my sons for example - can’t see them doing that). I just remember it being very easy to get credit at that point, but a real pain in the butt to dig out of.
I was really blessed to marry someone who helped me be better at this stuff. Many of us are much closer to disaster than we ever realize. I’m a total free spirit and not frugal by nature. I feel sorry for people who do not receive a good education or training in this area.
Amen!
I too have a family member in this situation - it’s awful. Just foreclosed on house last week (for which I handled all the legal matters), moving into bankruptcy. I manage all the major financial decisions and this person will be economically dependent on me forever. It is a horrible stress, much worse than I imagined, causes all sorts of “fault lines” in the extended family.
Youdon’tsay is spot-on - it’s not about money, at all. It’s so much deeper and we’re now in the weeds trying to help this person figure out why the spending was so out of control and what it’s meant for the rest of us.
All these stories about “living above your means” (Lexus leases, manicures, cameras, etc.) have very little to do with the story to which @partyof5 linked. Holy cow, what a sad story…that lady in the article works like a dog.
My own mother is 79 years old. I can’t imagine her driving around the country in a rattle-trap RV working at carnivals and mall kiosks. It’s a pretty sobering story.
Thanks for the post, @partyof5
Same here @emilybee. Knew of someone who lost home to foreclosure but still driving an expensive leased luxury vehicle.
We drive a 12 year old minivan. 
I guess all I’m asking is - should it be so easy to live beyond our means? Did our grandparents do that? I think only the upper echelons of society could get away with it back then.
I still remember lay-away.
When I started reading this article I wondered how many of the people profiled would be diagnosed with a mental illness. And sure enough, the gentleman in the second profile is bipolar. And bipolar disorder is not the only mental illness that frequently results in lost jobs as well as profligate spending behavior. Yes, it’s not about money and you can give people all sorts of basic financial advise but when mental illness comes into play there is no easy fix to this sort of thing.
Yes!!! Some disorders have issues with impulse control and planning.
The first few sentences of that article jumped out at me when the lady pulled into a restaurant. That $21 could have stretched a long way in an Aldi’s.
There can be many reasons for debt. I’m sure we all know people who live above their means. I have a sibling with some untreated mental illness who can’t keep a job, or quits for various reasons having to do with not getting along with co-workers. She’s approaching age 60 and has used much of her savings including 401k. My mother is very concerned about her future. The rest of us who have tried to help her in many ways are concerned too.
I recall reading that the biggest cause of bankruptcy is medical bills, with many of those people having some form of health insurance. Job loss was the second biggest cause. Sometimes debt is unavoidable.