financialcounselor

Woman Refuses to Face her Own Personal Fiscal Cliff

In Uncategorized on September 3, 2012 at 8:24 pm
Some of the biggest financial predicaments come about because of poor planning. Or in many cases, because of absolutely no planning at all. Or as I like to call it, burying your head in the sand.
For example, I talk to many people who are in trouble because of a major change in their finances that they knew was coming but didn’t do anything to plan for it. You wouldn’t believe how many people risk losing everything they have, including their home, because of this exact scenario.
One of my clients, Liz, had her head buried so deep, she hadn’t seen daylight in a long time. What happened was Liz was receiving money from SSI for her daughter. She had gotten this money ever since her husband died five years earlier. She got $650 from SSI each month, but she knew that the money would stop coming when her daughter turned 18.
Well, Liz’s daughter turned 18, the money stopped coming in, and Liz found herself without enough income to afford her bills. She was behind on everything, including her mortgage.
Liz had even sold the few nice pieces of jewelry that her husband had given to her, including the diamond earrings that were a present for their 10th anniversary, as she tried to keep up with her expenses. But it was no use without that extra $650 coming in every month.
“What am I supposed to do now?” she cried.
The answer was to scramble frantically to make up the difference in the income she’d lost, which is exactly what she was doing. But there was no reason for the frantic scrambling. She knew for years exactly when that money would stop coming, yet Liz was completely dumbfounded when it did. It was like she had walked into her job one day and been handed a pink slip out of the blue. If she had accepted the fact that money would stop and planned for what to do, it might be a very different situation.
At this point, Liz would probably have to downsize, sell the house and rent an apartment. And maybe she’d have needed to do that anyway, but here’s the point: at least it would have been a nice smooth transition instead of the craziness and sleepless nights she was enduring.
And maybe she’d have been able to keep the jewelry her husband gave her.  
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  1. Good report. A good case for the benefits of planning ahead. Gerry

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