Ok, long ago I stopped blogging to complain about others. I no longer harbor resentment towards others for the help that is given to them, because I indeed have been helped along the way and continue to be given financial help whether for me or my children. Gold star to Laura for growing up. I've also stopped blogging to ponder the financial carelessness of others because (1) it really isn't my business, and (2) I haven't been personally asked to help out financially. A second gold star for Laura.
This brings me the point of my post.
My best friend for 25+ years is single. She makes roughly $80K, is upside down on her condo/mortgage and second mortgage exceed the value by $15K-$20K, has student loans in the amount of about $30K in deferment or forbarence (not sure how to spell that properly), had credit card debt and is in a generally bad financial situation. I don't know what her budget is or how she spends money, other than it is in a foolish and irresponsible manner.
She's facing a second back surgery with a recovery time of up to two months. She isn't sure that her job will be held for her (it is in a hosptial and she splits her time between the OT Clinic and NICU) and lifting isn't a possibility during this time. She has disability insurance that would cover some of this with a projected shortfall of $400-$500 a month.
I advised her to:
(1) Make only the minimum payments on her credit card
(2) Limit her spending to what her income will be should she face a time of recovery and use that to build an EF (she doesn't have one)
(3) Look into the possibility of a room mate for her two-bedroom condo
She said she thought that bankruptcy made the most sense. I said I thought she made too much money for that and it didn't address her student loan at all. She jsut upgraded her used car to several years newer and simply added more years to the loan - the amount she paid stayed the same. She also bought a great digital camera on clearance at Costco.
She had initally approached the conversation like this: "I know we each have roughly the same amount of money coming in annually (True). I'm wondering what you think about my situation ..."
I did a good job not being judgmental, though I wanted to say some very pointed things.
She spent $10 on our trip to Panera (though it was lunch and dinner). And I'll admit to thinking "Gee, that would cover two pizzas and breadsticks from Little Ceasars which is what we spend on Pizza Nights at my house).
How would you have responded?
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How would you respond?
October 17th, 2011 at 01:37 pm
October 17th, 2011 at 02:53 pm 1318863189
If the friend starts pondering your suggestions with more detailed questions then I could see she might be open to making changes.
October 17th, 2011 at 02:54 pm 1318863298
October 17th, 2011 at 04:23 pm 1318868638
My beloved best friends of several years are terrible with money. At one point one of them came to me because he knew of our near-debacle and new budget-y ways, and I got very emotionally involved in helping them recover.
A month or two later AS was out with him, he offered to pay for drinks, and his card was declined. She asked what had happened to their big surplus (he'd basically told us that their $10K+ tax refund would put them back on the right path and they'd be able to recover financially) and it turned out they'd essentially drank and otherwise squandered it all away and were exactly where they'd been before. I was so personally aggravated because I'd helped him figure out the perfect way to get back on track.
Soon after, they walked away from their house. I didn't ask many questions, but they seem to be happier. One quit his law career and became freelance photographer, but it seemed like they were making ends meet.
Then I recently found out through various random conversations that A) the car they used to have they just left at a mechanic because they couldn't afford the repairs and didn't know what else to do, B) they don't have any credit cards (that they can use), C) one of them gets weekly massages that aren't paid for by healthcare, D) they've eaten out at a nice sushi place "at least 5 times" since it opened in late July, and have mentioned eating at several other brand-new restaurants (which means it was also within the last couple months).
I don't want to know. I can only imagine that they've stopped paying their credit card bills and their massive student loan debt (one has a PhD and the other a law degree, all on borrowed funds). How else could they afford to eat out and get massages all the time?
Moral to this long rant (which I can't post on my own blog because one of them might still read it occasionally) is not to get too invested in someone else's financial makeover. You don't have any control over the outcome, so you might be sorely disappointed.
I still wish for the best for my friends, but I'm not going to expect anything of them. If they succeed I'll be wildly happy, but if they continue to flounder I won't be in agony.
October 17th, 2011 at 06:29 pm 1318876147
I find when I turn things down (trips, restaurant meals, shopping, etc) in front of people and say I can't afford it, they sometimes pay attention. But not often.
One colleague now routinely says she's on a "tighter-than Greece" austerity plan. I think that often makes everyone stop and consider whether they should be too.