There are many reasons people get in trouble with their finances. If any of these describe you, reach out for help. There are solutions to each of these types that anyone can implement in their lives. Take a look.
Feast or Famine
Have you ever met those people who are on an extreme rollercoaster ride with it comes to their finances? The type that seems to be doing fine one day, and the next day you hear they are barely scraping by.
Maybe it’s the people who buy a new home and they are all excited so they go out and buy a whole bunch of new furniture on credit. They are euphoric until the first bill comes in and then they are in panic mode.
Or it could be the person who pays off all their debt and the next thing you know, they are bringing stuff to the pawn shop to get to the next payday. Suddenly, the sell and buy scenario is a regular thing at the pawn shop.
The Slow Death
These are the people who consistently live above their means. Unfortunately, a lot of Americans live this way. They spend $1.22 for every dollar they make. It’s a slow death because they overspend just a little but over time, that extra $0.22 adds up.
Maybe it’s the couple who is living vicariously through their children and can’t say no to them. You here them say stuff like “I’ll never let my kids go without like I did when I was a kid.” Whenever they go to the grocery store, they have to buy their child a toy – because – well, that’s just what they do. Right? Their kids are in all kinds of sports through school and other after school activities. It’s exhausting!
The Train Wreck
These are the ones you feel sorry for. This is the couple who has the breadwinner that has a heart attack. The person survives but is told they must retire right now! Of course, they planned on working for another ten years but now they have to figure out how to live on $35,000 per year instead of the planned $55,000.
The divorced couple. Neither one makes out ok from this situation. They both end up broke in the process due to lawyer fees, split accounts, etc. All their accounts are frozen during the process so they have limited funds to work with while they are going through the divorce. When everything is finally done, they both struggle for years trying to make all their finances work again on an individual basis.
Here the spouse has died and there is no more income. Maybe they have been diagnosed with a disease that will take all their finances. A natural disaster takes place and they lose everything only to find out that their insurance won’t cover half of it.
Living on Prayer
This is the person who makes a decent living but never saves any money. When they turn 65 (or whatever the retirement age is for them) they talk to a financial planner only to hear that they can’t retire because the only money they have to live on is what they can sell their house for. If they sell their house, they will have a little money but that won’t last long. No planning was ever considered.
Steps to Avoid Tragedy
Here are a few steps you can start to take now so that you don’t become one of the people described above.
- Live beneath your means. This means putting something from every check aside for later in life.
- Don’t make compulsive purchases. 50 years ago, if you didn’t have the cash, you didn’t get the item. It can still work that way today
- Make sure you have some type of medical insurance. Sure, the cost is out of control right now but if you don’t have it and something happens, all your plans go out the window.
- Have some life insurance. There’s nothing worse than seeing someone lose a loved one and not have enough to live on going forward. It’s a gift for your spouse and your family.
- Save. Save. In our current society, it’s all about instant gratification. Believe it or not, you can live with less stuff and still have a happy life.
If you need help with your finances, reach out to local organizations that help in this area. A good place to start is Consumer Credit Counseling. Find support groups and courses that can help turn things around.
What are some ways that you have avoided these tragic scenarios? Comment below.