Death and financial train wrecks – different types of devastation

While the post title sounds like related issues, in fact they are two separate soundtracks running through my thoughts the past few days. Nothing pretty to see here, so if you are looking for my usual glitter-bombing unicorn outlook, this may be the post to skip.

Yesterday I spent a couple of hours with my client who lost his 13-year-old son last week; the young man took his own life. While he is a client, most of my self-employment clients are people I consider friends as well, the business just another anecdotal box of experiences we happen to share. Understandably, he is completely broken, destroyed by what has happened. That little boy was the sun and moon and stars in his world, and now he’s gone. Interlaced with grief, though, is this intense, white-hot anger from the circumstances that may time will cool and bring peace. I am not an especially religious person; I offer no platitudes about better places and safe from harm. As a mother who has been through the grief that comes with the death of a beloved child, such statements tend to piss me off even as I know that my children are only on loan, they are meant to grow up and become independent beings well outside my scope of control and direction. But 12, 13 – it is way too soon. Please do not ever suggest to me it’s God’s will, or it’s part of a bigger plan, or they are happier in their place in Heaven. Fuck that shit. Our children – we are good parents; our children should be her on earth with us, getting awkward and hormonal, getting angry and screaming at us, assured in how little we know and growing up into people who again like and respect us for the mere mortals we are as they mature into adulthood and realized that their parents are imperfect, do not have all the answers, but try their best.

In a lot of real and direct experience ways, I am someone who understands. I listened and pretended not to notice when he cried. There are no words of comfort in these situations, and sometimes it is only human warmth that makes us feel less alone and lonely with our tragic losses. As I still think to this day, when there are no words, hugs speak volumes.

Into this profoundly emotional and poignant time with one slice of my life, comes all the bullshit and pettiness of small-ball problems. Comparatively speaking, anyway. There are no universal bandaids that remove physic pain and perceived injustice, and sometimes my patience with those who want to escalate petty grievances into something bigger, badder, much more complicated and time-consuming – let’s just say I’m short and dismissive. Every person I know who works or has any type of relationship with expectation of performance and results has similar stories of such disagreements and less motivated, less first-choice options for bosses, coworkers, worked hired out. So I know I am not the only manager at any level in the world having to deal with people and their problems. And I also know what is a Very Big Deal to them is smaller than small-ball to me. Most of the time, I try to deal with them professionally and compassionately, even while telling them to grow up and get real.

In other words, more drama in the office. And it is not that I don’t care – I care very much, particularly as it impacts perceptions about me and my performance of my job functions – but when you are dealing with a slice of pirated information (salaries) and without complete context, the leg you’re standing on is kind of weak and shaking. When it comes up, I will deal with it. Right now, my head is filled with thoughts of death.

And I hate it.

I hate that my client and friend is suffering so miserably. I hate that another dear friend is thousands of miles away and alone and facing a procedure on his brain. I don’t think it’s just me that gets nervous when people speak of brain surgery, and to not be able to be present and there at this time – it’s really, really hard. While telling myself thousands of times daily that it will be fine, he will be fine, I cannot get my mind to buy the reassurances. Sometimes being a “hope for the best, imagine the worst” version of Pollyanna does not work out all that well for me.

Truthfully, I cannot imagine my life without him somewhere in it. M is far more stoic than I am, thankfully, but even he has his reservations and concerns. It’s BRAIN surgery, and no matter how normal and routine it might be for the surgeon and the specialized team of doctors and nurses, this is someone we love and it is a world-class BIG DEAL to the rest of us sitting on the sidelines and metaphorically wringing our hands and trying not to be consumed with worry.

So yeah, head is kind of stuffed to overflowing out my ears with thoughts of death and what life is like imagining and trying to shut off the imaginings of life after the worst.

Ugh.

Another of my clients asked begged (his term, not mine) me to work with his niece on her finances. I thought it would be relatively straight-forward; after all, my client is very intelligent and sensible, his sister (the referral’s mother) seems the same in the times we have met. I figured at worse she would have student loan debt and need some help with her budgeting.

Oh my, I was so very wrong.

We met yesterday, and after 30 minutes of discussing the state of her life, I put away the green tea I was drinking and order the fully caffeinated, full-sugar version of a coffee-flavored milk drink to fortify myself. It is quite ugly.

She is a college graduate with degrees in chemistry and literature. Her parents paid for college so no student loan debt. Her home was gifted to her from her grandmother along with just over 6 figures in cash. She is employed in the local hospital system, which brings to mind decent wage and benefits. The car she drove up in a later model Camray – nothing fancy or flashy. While she is telling me all this, I am listening and nodding and thinking she needs a financial planner more than she needs a budget coach.

Then she pulls out the sheaf of check stubs, bank statements, credit card bills. I am still thinking, okay, everyone gets into trouble with credit cards; it’s almost a right of passage. I can help her, I’m sure.

It is with the documents that the real story comes out and why her mother and uncle asked me to talk with her and see if I can help her out.

This girl is 29, working at a job that pays about $42K per year, because she only works part-time (20 hours per week) by choice. There is a maxed out line of credit on her paid-off home, she has less than $500 in the bank, and an astonishing amount of credit card debt racked up in just a few years. On top of which – before inheriting her home and money, she had declared bankruptcy because of other credit card debt accrued in college.

I asked her how all this debt came about and got some pretty vague answers about shopping and paying for a couple of fender benders to keep them off her insurance and travel and charitable giving. I asked what happened to her inheritance, and got similar responses, with the addition of … plastic surgery. Did I mention she is turning 30 in a couple of months?

Ugh. Financial train wreck? More like mushroom cloud of financial devastation.

While I suspected this was going to be a huge challenge, I valiantly tried to help her.

Does she have a budget? Yes, but she routinely runs out of money and has to use her credit cards. Okay, can she show me her budget. Well no, because she keeps it in her head. She does pay all her bills when she gets paid and lives on what’s leftover. Except with this much credit card debt, there is a whole lot more living going on than a single person should be doing.

Or so goes the judgmental budget coach in me.

I did not have time to crunch the numbers to even get a sense of where she was, so we set up another appointment for this weekend after I had a better chance to look through her stuff and figure out how truly bad things are for her. And after looking through all her stuff last night, it’s really bad.

Since I know quite a few people in her age bracket, I know it is not just an issue of financial literacy. Yet I cannot fathom how someone could go blow through a just over $100K in inheritance, take out (and then max out) a line of credit on a paid-off home, and run up enough credit card debt to owe just over $150K on a $42K per year salary. And yet, I have seen so much worse through the years.

I know and have heard all the arguments and sob stories about the evil banks and credit card companies taking advantage of the consumer. Bullshit. No one makes us take on debt, although I do know sometimes it’s an uncomfortable only option we have. My sympathy in this is primarily with her family, who – rightly – refuse to bail her out of this mess and merely try to find her resources to help resolve it.

The discord in this is that she is in such a deep, dark place of denial. The typical millennial mindset is stronger than average in this one (and I do apologize to all my very level-headed millennial friends who may be reading this vent).

Either way, she’s in a huge financial bind and it will get worse long before it gets better. I want nothing but success for her, but from conversations with her uncle and her mother, she is not listening to them and is unlikely to listen to me. However, I will do my best.

I think she sees herself as living a life of freedom, whereas I see a young woman anchored by debt and being smother by the increasing interest and monthly payments. She could sell her home – the only assets I see that she has – which would likely clear her debt. But I know already the idea will float like a lead balloon.

At a very minimum, she needs to request a full-time schedule and accept every single hour of overtime that is offered to make more cash. With some negotiation with her creditors we might be able to get her squeaking through each month and with a very strict beans-and-rice type budget.

Buuuuttttt – one of the first comments out of her mouth is that she is unwilling to work more hours. Her debt is a combination of shopping, world travel, philanthropy, and just plain deranged, out-of-control spending. Seriously, I cannot think of another way to describe it.

I cannot save anyone, except perhaps myself. For the sake of my client, I will do my best to create a realistic plan … that she’s unlikely to agree to much less follow through with. When I met her, before we began discussing her finances in detail, I thought she was smart, funny, interesting, and quite physically beautiful. We chatted briefly about fitness – she works with a trainer 3 times per week and does yoga religiously 4 or 5 times per week – and I briefly, VERY briefly, thought she should meet trainer J. Or one of the associates I work with.

No, oh no. I love and adore my trainer, I really NEED my trainer, and I simply cannot do such a horrible thing. And my associates, it’s important to me to maintain my professional relationships. My goodness – what if someone I happened to introduce her to actually likes her? No, just no.

I was actually relieved to find out she likes girls.

The bottom line, at the end of a difficult day on a multitude of levels, what I find almost sadder than the real life agony is this silly, silly girl with the great big entitlement boulder resting on her shoulder.

Some things, some choices, some events are so far beyond my understanding. Where I can help, I try my best to do the right thing and provide what assistance I can. Sometimes it’s out of my realm of expertise, and the eventual outcome is in the hands of others far more skilled and more knowledgeable than me.

I have my hopes for the people in my life – I want what I want for them, whether it peace of mind or recovering their health. When someone new wanders into my midst, if I can help I will try. If they refuse help, I can and will step aside and let nature take its course.

Doesn’t mean I have to like it much, any of it. Sometimes I just wish people did not have to endure so much hardship, and sometimes I just wish people would be realistic and make better choices about their lives.

Money, credit cards, paying the stupid tax

I had 2 instances last week of paying the stupid tax. One was kinda/sorta my fault, the other is completely on me.

The first, more benign of the 2 was actually much more expensive. A year or so ago I took a course at an online university, paying my tuition with a credit card. However, the charges never appeared on said credit card, although I was assured last time I spoke to them (sometime in August 2015) that it was in the system and being processed. I thought no more about it, and frankly we run so many of our expenses through our credit cards I simply forgot all about it. I was also still with my former full-time firm, and they typically reimbursed me for CPE type credits, so I figured I must have put it on my company credit card. Either way, there was no communication from the school until last month, when I received a very nice letter from the attorney/collection service they use for old debts and then a follow-up phone call early in the month.

I called her back last Friday, determined that the debt was real and in fact mine. I explained the situation and circumstances as I recalled them, and she very kindly waived the late fees and interest, leaving only the original tuition amount that I actually owed. I gave her my credit card number (same one I believe I originally tried to pay for these courses with), and waited until she ran it and received confirmation from the company that it was paid. I jotted the confirmation number and all is well in that corner of my world once more.

The second one is an annual fee for a credit card I never use and have not given a thought to in 3 or 4 years. Because I signed up for online banking back when we originally banked with the issuing bank (for all of about 2 months, when they screwed up direct deposits twice in 2 months), there was no fee for this credit card. Now, because I no longer bank with them, because I never use the credit account, or just because they can, there is a $20 fee, which they billed electronically and the email notifying me of the statement went into my spam folder. A month passes, no payment, and I am dinged with $2.23 in interest charges, and this time I do actually see the email that I have a past due amount.

This one is completely my fault and I own it. I called, paid my debt, and asked them to cancel the card. No, I don’t care that I am good for another year; I have zero plans to use that card and have no desire to be having this same conversation about a late payment again next year. Cancel the card, close the account; I’ll wait.

The process got me thinking about the stack of credit cards in our gun safe. All these credit cards are from various periods in our lives or opened for rewards, etc. None of them have balances or annual fees, and if the physical cards are in the safe, they are not active and could/should be closed.

I waver and waffle on this topic. Between M and I we have 4 cards we use for varioius purposes. One card is for our regularly occurring bills on autopay – utilities, cell phones, storage rent, pest control, etc. Another is for online shopping. Then M and I each have our own cards we use for our purchases while out and about; makes it simpler to sort out receipts and categorize our spending. I have a separate business card for business-related expenses, and we also have branded cards for Costco and Sam’s Club.

All our credit cards are paid in full when statements are issued.

That leaves us with another 26 open credit cards and combined credit limits into 6 figures. Excessive much? Time to do some housekeeping.

I do not plan to close them all at once. While we have no immediate plans for big-ticket purchases that require financing, I recognize the need to simplify and decrease our credit exposure and let our scores recover if they take a bit of hit over the course of this process. My current plan is to close 2 or 3 per month. Some are in M’s name, some are in my name.

By the end of this process, we will have a few special-purpose VISA cards, a MasterCard, an American Express and a Discover card. I like some variety, and each offers unique rewards and no annual fees. M and both have our primary cards and will use our Costco VISA when it is issued next month for our backup cards. The rest will probably reside in the safe, except for once a twice per year we use them for holiday shopping (extra department store rewards) or travel.

But man, I wonder how I just ignored this for all this time. When I had more regular gigs as a budget coach, I used to counsel my clients to pay off their debts and then close the accounts. We did that as we got out of debt, for years using just one card and paying it in full as we paid off the rest of our debt. I have no idea when we turned this corner of playing the credit card rewards game and not closing accounts after collecting or utilizing our bonuses.

No more, though. Going forward I’ll try to close an account if we should open a new one, or close the new one within a couple of months of collecting the sign-up bonuses. I think the new system I have in place should keep us on a cleaner credit path going forward.

Or so I hope, anyway.

 

Financial things

Conversations abound all around me about financial stuff. Part of it is work – being someone’s accounting/payroll/benefits department does mean a lot of financial conversations with a lot of different people – yet it creeps up and into a wide swath of my personal life as well. I do not mind at all, unless someone turns defensive about their situation. At which time I have to request clarification – are you venting/whining about your situation or are you seeking some advice and shared experiences?

With close friends and my own family I can immediately tell the difference. I strive to listen actively and not get preachy about the “shoulds” or sound like a Dave Ramsey acolyte (I have never read any of his books or listened to his broadcasts; all I know of him is what I have read from other followers or dissenters). For me it comes down to choices and what one can or cannot do with a finite amount of resources and a seemingly infinite number of wants and need competing for those resources.

I still follow a fair number of blogs where people openly discuss their income, debts, savings, retirement, and choices that contribute to all of the above. Most PF bloggers are extraordinarily debt-adverse, to the the point that their austerity “shoulds” come screeching out of their keyboards in broken record fashion. From personal experience I completely understand the concept of debt fatigue and the whiplash that happens when finally safe from a crisis point with debt. I also know we are not particularly frugal and have a generous spending budget. My financial “shoulds” are simply to decide what is most important, what are our priorities beyond basic needs, and set some reasonable, sustainable goals to get there. It gets boring saving for retirement, just like it gets boring paying off accumulated debt. But in our case that is our primary need, beyond shelter, food, sustaining employment and all that entails, so we prioritize it. Our retirement savings is automatic and skimmed off the top of our income, not to be touched until it’s actually needed later on in life.

M and I are fortunate that enough income flows into our household to fund our other spending whims. Other than our mortgage we are debt-free, and our 15-year mortgage is on track to be paid off early, sometime in the next 8 to 10 years and well before I cross the finish line with full-time employment. We are fortunate right now, but I know that could change in a blink and our detailed plan for financial security in older and grayer years endangered. I also have a back-up plan in place for that, and a back-up plan to my back-up plan. Face it – I’m a planner.

I know a lot of people who do not have the luxury of a healthy emergency savings that we enjoy. Many live in a cycle of paycheck-to-paycheck and it’s a domino-effect disaster if their pay is late or shorted for any reason. An increase in property taxes is a panic attack, a change of jobs and the need to upgrade wardrobe a cause for sleepless nights. Maybe they have “luxuries” like cable TV and a cell phone plan that could be cut down or out completely, and those things are painful to let go of yet easier than having nothing else to cut and still not quite making ends meet each month.

There are occasions when debt is the only answer. I hate debt with the passionate zeal that comes from the misery of enslavement to it, something built of my own ignorance and selfish desires. Yet I find myself advising another dear friend that perhaps selling her late model debt monster SUV and buying (financing) another smaller used vehicle (with associated smaller loan payment) is in order in these extraordinary circumstances. And yes, I used the term “payment” rather that purchase price. I know it’s going to likely cost more in financing going with a new loan for a longer term, but right now it’s a cash emergency and she has to do something to get out from under the large vehicle payment that is sinking her finances each and every month. Unfortunately going without a car is not an option, and a beater car probably would not work either. For me or someone in a similar situation with a car-handy husband, young adult children and tons of friends with vehicles living nearby who could and would help out with rides in a pinch, plus a mile climate and an 8-mile commute by bicycle, a beater car would probably be fine. She has multiple jobs, an elderly mother who lives with her and requires transportation to appointments, so she needs a reliable vehicle.

None of this may work out, because she may be underwater on her present vehicle or unable to sell or trade it well enough to make another vehicle loan work. I remain hopeful for her, though.

All this has me thinking this morning about how we open ourselves and our lives to the opinions and judgment of others. I try to be encouraging and positive in comments, or at  my worst diplomatic and constructive. Yet there are others who feel free to pronounce your life a supreme catastrophy because your values differ from their own. Worse is taking such commentary so personally, as if you must respond to the judgment of others and defend your decisions. I can be a people pleaser and understand how easy it is to get sucked into and begin to internalize the opinions of someone I will likely never meet. It is so easy to let those niggling barbs get under the skin to fester and breed adverse emotions.

I remain conflicted about a couple of recent conversations and situations, yet there is nothing else to do except wait it and see how it turns out. These are smart friends who can evaluate the things that matter and impact their lives, and they know I am here if they need help to sort it out or to analyze their options. But I have niggling concerns about whether or not my suggestions are good, valid, or in their best interests. Because of my own history, though, I always wonder if I am in the ballpark of correct or if I am way off-base with my assumptions. I want the most positive outcome possible, even if it is polar opposite of anything I might suggest.

*sigh* I hate waiting. Even for other people’s situations to resolve, I hate waiting.

Shopping and credit card payment obsessing

I have been doing A LOT of online shopping for C’s upcoming birthday and of course Christmas. This year I have become obsessed with actual clothing type packages for the kids, which happens every few years. Because they do pop in periodically and read periodically, I cannot tell you all about what I have been buying them. But I’m very pleased with my finds and purchases and feel confident they will like them, too.

Tonight M and I made the trek back to the mall to return several things that simply did not work out – online pictures did not quite match items received, or I did not like the quality/cut of the fabric, or the color was washed out. The reasons are varied, which is partly why my credit card balance has been rather extreme the last couple of weeks. Still, after all the returns and credits and whatnot, I am nearly done with my shopping, packages are wrapped, and I feel good about where I stand.

Now I am wondering when to pay my credit cards. Silly, I know, but I typically pay my credit card balances every week. It’s a holdover habit from our getting-out-of-debt years, where just before every payday I would figure out take whatever was left from the previous pay period and apply it to the credit card balances. In those days we got paid every week. It’s nearly the end of the month, when I like to have nice zero balances showing on my budget tracking, even if there are charges still waiting out there to post.

I am trying really hard to teach myself restraint and patience; I find it nearly impossible to wait until a credit card statement closes. For whatever reason I feel more secure paying off charges each week, every week, any and all credit cards we might use. Because of the returns I have not yet paid the balances on two of our credit cards and it is nearing the end of the month, when I like to see a neat line of $0 owing. I am growing anxious about the $706 sitting on my online shopping account, which is completely ridiculous. I have a very high limit on that card, I have the cash sitting in my checking account, and it’s merely a few clicks and it’s paid. But I am trying to wait. It’s so much harder than I expected.

It feels like an addiction. As addictions go it’s harmless, but still … it’s a habit that has me in its thrall. I hate that.

Wow … just wow

In my net surfing yesterday I came upon this blog: http://doingitallwrong.savingadvice.com

Reading the entries left me speechless and amazed me in both good and bad ways. It was a woman describing the amount of debt she and her DH are presently in and how they got there. Okay, pretty common. The minute she started describing having 2 mortgages, 2 HELOCs, 401(k) loan, debt to family, and credit card debt my eyes started glazing over and I felt the old, familiar tightness in my chest from too many years of too much debt and the sacrifices M and I made to claw our way back out of debt and building a sustainable lifestyle that includes aggressive savings goals. What shocked me, just a little, was how she seems unrepentant about their debt, their spending habits, and has little intention of cutting back on spending or lifestyle to decrease the debt. Okay. I have to admire her honesty, because if I have to choke back my own judgmental urges I can only imagine how those who are a lot more debt-adverse and frugal are reacting. 

Shortly thereafter she posted again about her plans to get out of debt. That was good, made me feel a little better and optimistic about her situation. However, when she began discussing a house that her DH was itching to buy I actually gasped out loud. If you read her second post they are contemplating ways to purchase a third house to use as a vacation home now and a retirement home long into the future. Reading that, I felt that long-dormant heart-fluttering excited uncertainty that comes with the idea of a major purchase combined with that light-headed terror that comes with the idea of voluntarily going in that much deeper debt. Obviously my aversion to debt is far stronger than I realized, even when it is some complete stranger blogging about finances in a public forum. Rereading it tonight made me realize it’s like a train wreck with fatalities and I cannot un-see what has been seen and keep returning to it to see if I really saw what I saw, or in this case read what I read. 

I do admire her openness and honesty about her financial situation as much as I shy away from her attitude about its seriousness. While I always stress that personal finance is personal, this one really gave me wide-eyed pause like little else in the personal fiance realm has done in quite awhile. I realize she and her husband must be working with a completely different background and financial circumstances. That degree of indebtedness would cause me to have a nervous breakdown, particularly the family debt, and I certainly would not be capable of blogging about it. I cannot think of a single positive thing to say about her posts or her casual acceptance of the situation, and in truth I do not get the impression she is seeking advice or opinions. It just jangled my nerves and stirred up old feelings to an unusual degree.