musica–Of COURSE! I always wonder “what were they THINKING?”
And I’ve decided–they don’t think–because it’s never been taught and never been on their radar.
I’ve had kids live with us on a long term basis (during middle and high school years–now deemed the “other sibling units”) sometimes weeks and even years because their parents went into foreclosure or other life difficulties.
We didn’t adopt anybody (just with our hearts!) but provided a safe spot to land for some kids and a respite for some parents in a not so good place.
and yet–what were the parents thinking to land them in a spot that their kid was at MY house?
I think most were not ever educated on how money works. How loans and interest work. They didn’t know how credit, banks, loans–car and home, interest–you name it–actually works. They know nothing about investing and that you can save for your own retirement beyond SS is a new vision entirely…
Credit was sold to them as a way of life A car loan is “just what you do” and if you don’t have the newest car it isn’t going to last. I don’t think most EVER lived with parents who did not have loans outstanding–it’s been a way of life.
And it’s hard to convince them that isn’t a good lifestyle or good for the blood pressure or the pocket book.
So–at the end of the day–people need education on one of the main facets of life–making money and what to do with it so it propels them to their vision.
I was not raised with any “instructions” around money - once my parents got money, it was spend, spend, spend. The 80’s were good. Greed was good I feel very fortunate that I married someone who had a lot more discipline about it. I don’t always like it, but I do get how saving on the little things can enable the big things. I get annoyed that we turn the heat down to 55 when we leave the house but I’ve come to realize that enduring the 5 minutes it takes to warm the house back up, and having to put on a sweater, is well worth it.
I think a lot of people also haven’t been taught to delay gratification. You see it here all the time. “I’ll figure out how to pay back those pricey student loans because I really, really want to study music at a $60,000 private college that offers minimal FA.” “I need a car to get to my 10 hour/wk. minimum wage job.” “If I go straight to grad school all my student loans will be deferred and I won’t have to worry about them.” I think it’s human nature to not want to look at hard realities, but that doesn’t make it smart.
We were never given any instructions by my parents about money. My dad spent a ton of it and had no problems taking out loans and buying on margin while mom hid “hers” away because she was always worried about dad’s spending habits. We were raised frugally, but all of us grew up to be in varying degrees very responsible with money and financially comfortable. Two of my sibs are VERY rich but have a hard time enjoying spending money because they always feel poor and that poverty can strike at any time, though they both have more than enough to have retired years ago. One of them spends money as soon as it he gets it and they never eat home-cooked meals. They always just go out or bring takeout home and eat that. They are always crying poverty but have always had much newer cars than we do (ours are a 1998, 2000 and we were gifted a used 2009).
We hate loans, finance charges, paying interest, and our kids have the same feeling. They are prudent with their money, but do enjoy having nice things and enjoy spending on experiences with loved ones, as we do.
It is hard for folks who have never been around folks who live below their means to understand that mindset vs chasing after all the things that ads say that “everyone” needs and wants.
Frightening article. Should be required reading for anyone considering a Parent Plus loan or similar. Too many adults in 50’s sacrificing retirement savings to pay for college.
Should be required reading for anyone getting a credit card or any loans and folks with expensive “dream” schools or expensive weddings (and divorces). People can get into financial trouble through a lot of different routes. Credit cards are an easy way to fall into deep holes that are very tough to get back out of.
Thank god they’re not sending pre-approved credit cards to college students through the mail anymore. I don’t even like that my kid’s debit card still allows him to withdraw money when there’s nothing in his account.
Yes, to me, it’s really important for kids (& adults) to understand that when your money runs out, that’s all! It’s an elusive concept for some folks. They say, oh, haven’t maxed out credit limit on CC, so still have $$$$.
Easy-to-get cash with huge interest is a big problem. My D had no trouble getting a CC and has 3, even tho she has no full time job and never had one.
This article was incredibly sad to read. I agree that this woman has shown incredible perseverance and grit, but some of the decisions that she made did seem odd to me. It is too bad that she didn’t have family or friends to advise her. I wonder if she would have been better off staying in the doublewide (that appeared to be paid for) and somehow paying the higher rent? The article never did give the amount of the rent. It says “She reached out to the local senior law center, even her county supervisor, scrambling for a solution,” but the article does not say if she followed that through to a conclusion. It just mentions that around that time her friend left her $20,000 so she bought a car and drove off in the RV.
In the “stay in the doublewide” scenario she would have had to sell the RV to remove that debt and payment. With $1390 per month and no more payment on the RV she might have been able to “make it” in the doublewide. I could see her possibly working with a credit counselor to reduce her payments on the $50,000 of debt that she has, or filing for bankruptcy may have been an option. I understand that with bankruptcy you get to keep your home. She could then work odd jobs in her California location without having to travel around the country spending gas money and having her RV incurring more and more wear and tear.
What about getting a roommate? Remaining where she lived would also give her more possibilities to build a support system of friends/help be it through church or a community senior center. I believe also, if she had stayed put she could have utilized a local food bank to supplement her food supply. As it stands, with her decision to hit the road and just ditch the doublewide seems problematic.
The article mentions that she has a discount card for Books-A-Million I assume that is for a bookstore. What about using the library? Our local library also has culture passes for numerous museums, etc… I’m sorry, but paying $100 to take a guided tour of Frank Lloyd Wright buildings, when she was in need of dental care was nuts. Did she try to talk to the tour guides and let them know of her predicament? They may have let her tour for free or for a reduced rate. What about the $21.36 dinner - does she look for coupons before she goes out to eat? No matter how small the storage space in her RV is, she would still be better off buying groceries for $21.36. She could also buy staples such as milk in powdered form so that it would last longer and be available when needed - and also eliminate the problem of storing it in the small refrigerator. It seems that storage space used toward food would be of the highest priority. When she spent the large amount of money on dental care did she first try to go to a dental school to have a student do the work or a dental program that offered discounts for the needy?
As for the RV repairs, that could have been avoided by staying put in the doublewide (could the rent possibly be worse that what she is experiencing now)? I really can’t see any elderly woman being able to keep up with the maintenance and repairs that go along with owning an RV with many miles on it. I also noticed that she eats organic food! I see that as a luxury - I believe that she could find healthy ways to eat without having to purchase expensive organic food. FYI - I personally use coupons, powdered milk, free services at the library and don’t buy organic due to the price. I am wondering how much different her life could have been if she had had someone to advise her along the way. I just looked the photos in depth and this is a very sad story of a very real person.
She might have difficulty getting a library now because she probably does not have a permanent address.
I wonder if she could find a subsidized senior apartment to live in. She would only pay part of her income. Moving around reduces the support services that are available to her.
I think you are not the only person who has this worry.
For the grad school, we chose to pay whatever we could afford and our kid needs to share a part of the burden too.
For the (future) wedding (if there is any), we actually prefer that both the groom side and the bride side pay as little as possible, unless both sides are well off. If only one side has the money, we prefer both sides do not spend much money.
A lot of talk re: health care costs driving folks into financial ruin. As far as medical insurance these days. all programs on the exchange have an annual out-of-pocket maximum which, though a lot, won’t bankrupt you for life. Thank you, Obamacare!
“Its awful that you cant get a decent rate on a CD or index account at bank” When rates were higher, so was inflation.
@musicamusica mentions a lot of it is mental health issues. I think that is true in some cases but, IMO, a lot of it is just a lack of good ol’ delayed gratification. I agree with @Sue22. Delayed gratification is one of the best things we can teach our kids, however, it can be a hard thing to teach. My siblings and I were all raised by the same fiscally prudent parents with the same values and similar opportunities, yet we have very different approaches to managing our finances. Unfortunately, some of my siblings haven’t been very good about delayed gratification.
"A lot of talk re: health care costs driving folks into financial ruin. As far as medical insurance these days. all programs on the exchange have an annual out-of-pocket maximum which, though a lot, won’t bankrupt you for life. Thank you, Obamacare!
“The maximum out-of-pocket limit for any individual Marketplace plan for 2016 is $6,850 for an individual plan and $13,700 for a family plan.”
That amount yearly (plus premiums)
might not devastate you or me, but it certainly could hurt other people. Particularly those who have little savings, and had better coverage in earlier years. I’m sure people that didn’t have coverage before are grateful, but those who are digging deeply into already empty pockets are scrambling. Didn’t think that was the intention.
Even tho there are caps on out of pocket maximums, those exclude Rx, which can be very costly and maintenance mess are supposed to be taken regularly as prescribed.
@busdriver11 - I see your point and agree that it is still a lot but it is now much different than the days when a major illness could lead to catastrophic bills of $100k+. IMO, more changes still need to be made which pay for and encourage more preventative healthcare. ACA isn’t perfect but the old, employer based only system was broken and unfair to many.
Yes, it is great that there are caps which are much more reasonable than many had previously. Our system still needs significant tweaking as healthcare (especially for chronic conditions and prevention) is still quite costly.
We all make a lot of choices all the time. Some folks are unable to think all the way through about long term consequences of near term actions and don’t have many people to help them think things through.
Traveling around for jobs costs time and gas–even with lower gas prices driving a large vehicle eats a lot of gas, plus maintenance is needed. Traveling also makes it tougher to establish stronger bonds and use community resources which may be available for lower income seniors, like libraries, housing, medical care and other benefits. It also makes it harder to work your way up and be promoted to better jobs.
I doubt that all of this was considered when this woman was trying to decide what to do about her increased rent and the $20K legacy she was left by the friend. Many have no idea of the range of services they MAY qualify for and it can take time, persistence and paperwork to get through it all. If you leave the area, as this woman does, you also forfeit you place in the que for services and never get to know your community very well.
If you read the story closely it becomes apparent this was not necessarily about doing what was financially prudent, but rather about fulfilling a long-held dream, even if it wasn’t the most fiscally sound choice. I think a lot of the time when people haven’t run into medical or mental health issues this is at the root of the problem. The person leaves a boring job with good benefits because they’ve always dreamed of striking out on their own and three years later is swimming in debt. Or they pursue degree after degree hoping the next one will be the golden ticket. Or they go into a creative but unstable line of work and never build up a nest egg for a rainy day. The former owner of my house was such a guy, an inventor with a great idea. He quit his job to pursue his invention full-time and put everything he had into developing it but failed to properly patent it before marketing it to the big guys. Anyone here ever use Graco’s Teddy Bear booster? I had a garage full of prototypes when I bought my house out of foreclosure.
I feel very fortunate that I married someone who had a lot more discipline about it. I don’t always like it, but I do get how saving on the little things can enable the big things. I get annoyed that we turn the heat down to 55 when we leave the house but I’ve come to realize that enduring the 5 minutes it takes to warm the house back up, and having to put on a sweater, is well worth it.