Ask the Readers: What is your most pressing financial issue?
Published on - October 26th, 2012 (by Ellen Cannon) As Election Day draws (mercifully) near, that old question “Are you better off than you were four years ago?” comes up again and again. I’m not going to talk politics. However, I think the better question at any time (and one that is worth asking a few times a year) might be “What is your most pressing financial issue?”
Facing foreclosure? Deep in credit card debt? Shopping for health insurance? Lost your job? Can’t make the student loan payments? Haven’t started saving for retirement? Can’t even save enough for an emergency fund? These are some of the issues that many people are dealing with.
For the past few months, my most pressing issue has been retirement. I have money saved, and I’m feeling pretty comfortable about my future. But one big retirement issue still needs to be resolved: Should I buy long-term care insurance? I’ve talked to several insurance agents and the options for long-term care are mind-boggling. How much money per day should I expect to need? How long should my elimination period be? How much inflation should I anticipate? Should I skip LTC and the high annual premiums and just put that amount away in a safe investment, like bonds, or invest in dividend-paying stocks? Complicating the choice is a health issue I had nearly 20 years ago, which will probably knock me out of the best pricing – even though the problem was fixed and I’m fine! I haven’t decided what to do yet, but I’ll update you once I’ve sorted it out.
Health insurance for the unemployed
A few weeks ago, a close friend was laid off from his editing job after eight years. He’s busy updating his resume and also looking for health care options, since COBRA is so expensive. In August, MoneyRates.com and MSN.com did a joint poll asking what workers want: free health care, a 10 percent raise, more vacation time, or the ability to retire early. Of the more than 10,000 respondents, 44 percent said free health care.
Tying health care to a job has always seemed crazy to me. It’s a huge expense for employers. A benefits consultant once told me that an employer should plan to add 30 percent over the salary of an employee to cover benefits. When I lived in Australia, which has universal health care, I met many people working in jobs they were passionate about, even though the positions didn’t pay much. Without having to worry about health coverage, they could make decisions about their lives based on what they wanted to do. Australians are world travelers, and when they head to Asia or Europe or the U.S. for a few months, they can pay the government a fee to extend their health coverage while they’re abroad.
Debt hinders choices
If you’re facing multiple financial pressures, it’s overwhelming. Where do you start? I’d start by paying down credit card debt. The APR on most credit cards is probably the highest interest consumers are paying. The average credit card interest rate is about 16 percent. The average auto loan is around 4.5 percent and mortgage rates are at historically low levels at 3 percent. So paying off the credit cards and keeping them paid off is the first step.
If you’ve lost your job and don’t have an emergency fund, paying down your debt will take a backseat to finding a job. I’ve been without work when a magazine has failed (this has happened a few times!), and there is nothing more gut-wrenching than not having a paycheck – or something to do each day. (The loneliness of being unemployed cannot be underestimated, either.) Fortunately, I was always able to find freelance editing or writing work to tide me over until I found a full-time job. My recently unemployed friend is a terrific guitar player, and he’s already said he’s going to teach guitar while he’s job-hunting. Other unemployed friends are learning new skills to expand their opportunities. These days, job-seekers have to be creative, dogged, network like crazy, and perhaps get lucky. Finding a side job is crucial, although that may be just as difficult as finding the full-time job today.
In south Florida, as in other states hit hard by the housing collapse, many people are out of work or underemployed but can’t move for a job because they can’t sell their home. So they’re stuck in a tight job market, paying for a house that may not be worth what they owe. Man, there are a lot of financial problems.
So I’m asking the readers: What is your most pressing financial problem and what are you doing to solve it? What problems have you overcome and what advice can you offer others in a similar situation?
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Our most pressing financial issue is how to pay for our sons’ college expenses, especially starting next fall when our younger son joins his older brother at college.
Our goal as a family is for them to get bachelor’s degrees without any student loans, and without having to touch our retirement savings. So far, with one son in college, it’s working, through a combination of a good scholarship and choosing a college near our home that he commutes to. But even if his younger brother gets as good of a scholarship and commutes with his brother, our expenses will be going up. So we’re already taking steps: I asked for a raise (and got it!), older son is already applying for paid interships next summer, younger son is applying for every scholarship we can find, we’re looking at every household expense and have cut our monthly budget by several hundred dollars, etc. So we can hopefully tackle the problem with a combination of more money coming in and less money going out.
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I am with you Marsha! I have four sons – the oldest is a sophomore at a state college and the younger ones are still in high school and middle school. I learned so much with the first kid, including how to maximize earning school credits in high school via dual credit classes at our community college, AP and CLEP tests. We have challenged our younger sons to graduate with at least 20 hours of college credit (should be doable and will save thousands).
Now if we could just do something about auto insurance – covering three teen boys isn’t cheap.
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Auto insurance for teenage boys is truly exhorbitant. We’re hoping that younger son gets a good scholarship to older son’s school, because they could commute together and we wouldn’t have to buy (and insure, and gas up, and maintain) a 4th vehicle right away.
It’s definitely cheaper overall for them to live at home when college is just 4 miles away, but there are additional commuting expenses that we’ve had to work into our budget.
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I hear bicycles are a great commuting tool for teen boys. 4 miles is nothing. That would definitely cut down on expenses during college.
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4 miles away for college? Why would they even go by car? How about commuting by bicycle?? I live in Europe where bicycle commute is rather the status quo and 4 miles is totally doable! Invest in some pretty good bikes, excellent rain gear and off they are!
And there wouldn’t be any additional gym memberships needed!!
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We live in a part of the country with very cold, snowy winters (that last 6 months) and the roads to college (except the few blocks in our subdivision) are 4-lane restricted access–no bikes or pedestrians allowed. Add to that laboratory courses that sometimes last into the late evening. I haven’t done all these years of hard work raising them just to put them into a perilous situation now.
They don’t need gym memberships while in college, because the school has a full-feature gym available to all students. Plus, there’s plenty of walking done between classes.
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Our oldest won’t be in college for 13 more years, but so that we could afford it, we are moving are mortgage to a 15 year term. A little pain now (increases the monthly payment by about $200) should pay dividends down the road as removing that monthly payment help us help our kids finish school without student loans.
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Only one?
I suppose, healthcare is most immediate. I have autoimmune thyroid disease. My husband was offered a job at a small startup but no health insurance offered. We’d have to buy through a broker, and my condition made the cost of insurance incredibly high. Even though I only need one, generic pill per day at a cost of about $10 per month, as well as once or twice yearly bloodwork. So he didn’t take the job. Good thing, because they also didn’t offer any maternity coverage and we got a surprise pregnancy right after he declined the job offer.
In the medium term, the cost of college and raising our soon to be three kids.
In the long term, retirement. My husband’s grandfathers lived into their 90s. My grandparents lived into their 80s with major health problems.
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Our most pressing issue is starting a family and everything that revolves around it. We want one of us to stay home, but we have to decide who that person should be. One of us makes much more than the other, but the one earning more is the one that would like to stay home.
As a result, we are trying to save a lot while at the same time pay off as much debt as possible so that we lower our monthly expenses, hopefully allowing us to have one parent stay at home.
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Our current most pressing financial issue is homeowner’s insurance, which is a huge nightmare in our area if your house wasn’t built within the last 10 years. Coverages dropped, roof life certifications needed, non-renewals issued, having the policy passed on to a different carrier. Sometimes it feels like I have to worry about our homeowner’s policies way too often!
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Our most pressing issue is getting our savings back up. We recently spent almost all our savings and now I feel like I am naked without that money in the bank.
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I think our most pressing financial problems are similar to the ones you listed above: fears about the unknowns of retirement expenses when the global financial environment is in so much flux. We are 8-10 years from pulling the plug at about ages 48 and 55, and the twin demons of inflation and rapidly rising health care costs are a huge threat to everything we have accomplished and still hope to accomplish.
Broadly speaking, I live in fear of the ants and grasshoppers scenario. Mathematically, money to pay for X must always come from those who have it, either via taxes or via the government printing money, which of course makes all existing savings worth less. No matter what we do, a portion of our savings will be taken, and it will be given not only to people who truly need it (which I approve of), but also to people who could have saved but chose not to (which I do not approve of). The only real upside to continuing to save like crazy is that people who have more money usually get to make more of their own decisions.
As far as accomplishments go, we have paid off all debt except the mortgage, and should have the mortgage paid off as well in about 2 years. Once that happens our plan will consist of saving as much as possible and running the numbers carefully so we can adjust our retirement timeline as necessary.
One big challenge we overcame recently was my stupid belief that I was smarter than the market. I’m not. For anyone else with a “perfect” investment plan, my advice is: keep good records. Invest however you like, but once a week go in and record your progress. You will be cured of your delusions in no time.
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Basically, if you believe (as most economists and wall street investor professionals do) that the market is fairly efficient, then by definition the knowledge that would allow people to beat the market is already built into market pricing. So you might educate yourself to ‘beat’ the market occasionally, on particular stocks or commodities, but the law of regression to the mean says that it won’t happen often, and will be offset by the times you screw up the call.
The way to make money on the market is when the overall market grows over time. Low-fee index funds :nods:.
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Long term, jobs. Jobs jobs jobs. I’m one half of a graduate student couple, and hoping that we’ll be able to find jobs a) at all, b) close together, and c) in our fields. The last few years have not been confidence-inducing, and this election makes me nervous for how it could affect my field in particular.
Short-term, not having enough income for significant savings. We’re lucky that we can pay the bills, including college student loans, while still in school, but it makes me nervous that we’re not able to max out our IRAs, and that if we move to a place without a decent rental market after graduation, we won’t have enough money for a down payment on a house.
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It’s not that COBRA is expensive–it’s that insurance is expensive. And only when you suddenly have to foot the bill instead of your employer covering you, do you realize how much it actually costs.
I say this because a lot of people don’t actually understand COBRA or how much money their employers cover for them. I do HR for a small nonprofit and its important to let people know that their benefits cost us about $5500 per person per year.
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I just started a new job as an analyst for a benefits administration company, and I was startled to learn just how much employers pay for their employees’ insurance. I’ve had employee benefits in the past but just barely understood them — I mean, BARELY. Now, when I think about growing my own business and possibly having employees, even just a few, I’m a bit scared. If I’m going to be an employer, I certainly want to provide excellent benefits to my employees, but the cost of doing so is really making me think twice about it!
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Yes, Yes, Yes! At my company if you go on COBRA you pay an incremental cost over what your employer was previously paying. The additional percentage is to cover the incremental cost of managing you. Health insurance is expensive. The only people for whom it isn’t are those who have not demonstrted any illness, and are relatively healthy now. Although, there is no telling what will happen to their premiums should they get sick.
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Right. And total cost of COBRA its set by law at max of 102% of the actual cost, with the 2% to cover the company’s overhead.
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Wow, $5,500 per year? I manage a two person NFP and our BC/BS invoice is $3,700 a month. Of course, both of us are in our 50s and it would be considered by most a generous plan. I am actually quite surprised our Board has not asked us to participate in the cost in some fashion…am I the last person in the USA with 100% employer paid health care?
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We’re in NYC w/ a FT staff of 8-10. The cheapest plan we offer is an Oxford EPO with a deductible + coinsurance (OOP max of $3,000/year). It’s about $475/month and we cover 90%. We also pay for a small life and LTD policy for FT staff.
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Healthcare, retirement, college costs…
College costs are a temporary issue – one child is through with no debt thanks to a great state school system and planned savings. The other just started at a private college with higher costs – but with decent financial aid.
We are downsizing now that there are no more kids at home and hope that moving to a smaller place closer to a city will help with COLand paying for college as well as enhance our quality of life.
That’s the next 10 years until retirement, at which point we plan to move again – back to Europe (where we are from originally) at which point healthcare will not be an issue (Yay universal healthcare!)and our retirement savings should go much further.
So long as we stay employed and earning at our current level this should work out – but how likely is that? I’m trying to get to a point where I’m not trying to have contingency plans for contingency plans – otherwise my biggest concern is going to be affording mental health care!
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This might seem like a real stupid question however, Who pays for the universal insurance? I have traveled to Europe a few times and from what I remember the taxes were quite high.
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Yes, taxes are higher in Europe and Australia than they are here. I know in Australia, there is a 1.5 percent income tax (except for low-income people) that goes toward their health care system. High-income folks pay an additional 1 percent, so 2.5 percent total.
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This should help you to compare, here are our income tax brackets in Canada:
15% on the first $42,707 of taxable income, +
22% on the next $42,707 of taxable income (on the portion of taxable income over $42,707 up to $85,414), +
26% on the next $46,992 of taxable income (on the portion of taxable income over $85,414 up to $132,406), +
29% of taxable income over $132,406.
We have (what I consider to be) a really wonderful health care system, which is covered by the above.
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From the Fraser Institute:
“In 2010, a Canadian family with an average income of $72,393 spent 41.3 per cent of its income on taxes, while spending 34.0 per cent on the necessities of life: food, clothing, and shelter.”
http://www.fraserinstitute.org/publicationdisplay.aspx?id=17445
See figure 2 on the CBPP site for a comparison across countries:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3151
I suspect that more people will find one of their #1 pressing problems in 10 years might be rising income tax rates. And inflation… and poor equity markets… and reduced social security…
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Rising expenses on healthcare and education have prevented me from going back to school or taking more career risks (ie taking a job that might not offer health benefits, or starting my own business). So I feel somewhat stuck in a low income bracket at the moment, as I seek to keep my healthcare benefits and to keep my student loans manageable.
When candidates/MOC’s talk about ‘canceling all student debt’, I feel outraged. This idea is crazy for so many reasons, but especially, many of my friends have made the responsible choice to put off school until they can afford it, or to go to less prestigious institutions because it’s what they can afford. If people cancel all student debt, it just entitles those who either 1. Were privileged already and went to Ivy League/private, or 2. Made irresponsible spending choices, going to school when they really couldn’t afford it. I know many people in both categories, many of whom live at an outrageous standard of living while in school and just think “I’ll pay it back later.” It punishes those of us who are trying to be prudent about our spending.
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Yes, that’s my boat too. I’ve done a lot of research for a possible career change, and we’re trying to figure out how to get me the degree I need to get a certification in the new field.
The tricky part is that the first year of the program is incompatible with working — there are only a couple gaps of four or more hours during the school week, and with a school-aged kid I think it’s important to be around on the weekends. I could maybe squeeze in a little freelancing, but that’s it.
So we’re trying to figure out whether we should take out loans (the new career would come with a pay raise that should be equal to the loans we’d take out), or if we should save up for the degree before I start (possibly doable, but will take a long time). And if we get loans, do we do student loans or a HELOC?
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I’m having the same problem, Victoria! I wish more programs offered evening hours!! I wish you all the best!
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Uh, people who were privileged already aren’t the ones with student debt. It sounds like who you’re really mad at is people of your own socioeconomic class who had the bad taste to try to get above their station. You might want to think about what that type of attitude does for upward mobility in this country and think about replacing it with the idea that we should work towards a country in which anyone has the educational opportunities that they’ve earned, regardless of their parents’ income bracket.
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I don’t think it’s an issue of “getting above their station,” I think it’s an issue of 1) Misusing student loans – i.e. taking a month-long European vacation for “cultural experience” or buying a brand new Hummer instead of an affordable used car for “commute to school” (I know people that did both) and 2) sending a message that you don’t have to be responsible for your actions. If you have the grades to get into an Ivy League school and need to use debt to do it, or even if you decide to go to Europe, that’s totally fine, but knowing it is a choice that you made, you should have a realistic plan to repay that debt that does not entail banking on your debt being forgiven by the government (aka taxpayers).
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I agree with the term ‘misuse’ of college loans and here’s the one that irks me the most. A few months ago on a nightly news broadcast a graduate was moaning about owing more than $200,000 for her degree. She kept whining about it taking ‘forever’ to pay back once she started earning her $40,000 yearly salary. and it would be so much better if the government should forgave the loan. She didn’t need the loan forgiven–she needed some common sense. Actually, I think a lot of people need some common sense. My biggest financial worry? That my tax dollars are going to have to support selfish people like this lady.
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@Katie, I would love to see education be free, or at least affordable for us normal folks! But to retroactively cancel loans is not the way to do this.
Also, upper middle class people do take student loans, both for themselves and for their children. They take student loans so that they can use the cash at hand for more immediate costs, such as purchasing homes, cars, starting a small business, or paying medical bills. This is often a wise decision, as student loans have lower interest rates than credit cards or bank loans, and these people typically do pay off these loans within the allotted time. In fact, they themselves would find it strange to have their student debt suddenly cancelled by legislation.
Clearly, many of us have huge barriers to overcome in getting our education in order to make a living. We strive to get an education while maintaining responsible spending habits, carefully planning how we will pay the money back and making years of personal sacrifices to make it happen. Things like living with roommates, living in old apartments, longer commutes, shopping second-hand, doing our own sewing, and working 2+ jobs are normal for us. For the government to say, “These sacrifices were all in vain, as we would have cancelled your debt anyway” is absolutely unfair to responsible, hard-working citizens.
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I agree. It kind’ve makes my blood boil too…since my husband and I worked hard and sacrificed to finally pay off his student loans this year.
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I’m with Holly. I graduated from college in 2003, and will celebrate having my loans in their entirety paid back ten years later– Only to watch, potentially, a million other people celebrate that they didn’t have to pay their loans back. What a disappointment.
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I am very hopeful that it doesn’t happen. Regardless of whether people were irresponsible in taking out those loans or not, we cannot ask taxpayers to bail everyone out of their student loan debt. My children and my children’s children would surely be footing the bill down the line since the government would just have to borrow more money from China to make this happen.
Additionally, what would it really solve? It would only benefit people who currently have student loan debt. It would do nothing to make college more affordable or to change the amount of debt that people choose to take on in the future.
It just doesn’t make any sense to anyone who doesn’t stand to benefit from it.
I do feel terrible for those who have crushing school loan debt. College is ridiculously expensive and I think it’s a shame that students have to borrow so much money just to get an education.
I do feel bad, I just don’t feel that it is my responsibility to pay for it. We have paid off tens of thousands of dollars in student loan debt, car loans, and credit card debt over the last 8 years…and now we are debt free aside from our mortgage. My suggestion to anyone in debt- tighten your belts. Cancel your cable television. Get a cheaper cell phone. Get a second job if you need to. Get a few roommates. Drive an older car or take public transportation. There are so many ways to lower your expenses in order to put more money toward your student loans. No one is going to solve this problem for you.
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Could you send me links to articles about candidates or elected officials who are talking about writing off all student debt?
I understand that there’s talk about making it more difficult to get money, that there’s talk about the MANY for-profit schools (many of them online or “Institute” “colleges”) that are making a fortune from accepting students who are extremely unlikely to graduate and basically soaking up their money until they are kicked out with lots of debt and few skills.
I know of programs where you can get some debt forgiveness or a certain level of debt forgiven if you agree to work in certain parts of the country for 5 or more years.
But, how many people are calling for full forgiveness?
Certainly, as with any loans there should be a lot of disclosure and with student loans, a lot of accountability before more money is given. But think of the horrible mortgages written — I see plenty of room to blame both the people/financial institutions who wrote those loans, the many people who willingly signed on mortgages that they were CLEARLY never going to be able to pay off even if the market hadn’t crashed, and the government with regulations lax enough to allow that situation to go on, unchecked, for so long.
Besides, most debt can go away in bankruptcy — student debt can’t right now. So I guess I’m not sure where all the angst is coming from?
To put it in perspective, I have two kids currently in college. One attends an out-of-state state college on an excellent scholarship and our savings for him will cover the rest. The other attends a state-affiliated university in our state and his scholarships also cover a lot of the cost and our savings the rest.
So, no interest and no debt accruing. And we feel very lucky. Could we buy more stuff and take big vacations and the like if we hadn’t saved? Yup. But not having debt and having kids who will graduate without debt seems worth it.
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Paying off old credit card debt along with new debt we had to take on.
We had a Baby Emergency Fund of $1K while making serious headway into old credit card debt (along with $1500 in an “irregular expenses” account and $2K in a house repair account) – then an overpowering stench of mildew on the back porch revealed the porch roof was shot, which revealed the main roof was just beginning to fail. At the same time, the car needed $1500 of repairs. Because the time to repair the porch was dragged out and the cost uncertain (it turned out to be nearly double the original estimate), the car repairs along with other expenses that would normally have come out of the irregular account went on credit.
The roof (and gutters) cost $7000 to fix. Not enough equity in our home to get a loan; fortunately my brother offered $7K with 0% interest. I insisted on a written contract with the agreement to pay $200/month; so far 2 payments made and family relations are intact. I just received the bill for the mold removal and porch reconstruction (it had to be gutted) – total is about $4K. The irregular fund was emptied to pay for heating oil (a standard irregular expense) and my son’s after-school activities for the year. I just used a credit card to pay off the company that did the porch and will use the remaining savings and a paycheck to pay off that card (high interest and evil bank).
The next move is to rebuild the Baby Emergency Fund and the other savings accounts up a little, and go back to paying down the other credit card. And definitely pay back my brother. Hopefully no more $11K emergencies for awhile.
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The issue that concerns me most is definitely healthcare. Our premiums have gone up between 10-30% every year for the last 8 years we have been married. I cannot imagine how this can continue in the next 5, 10, or 20 years. If it does continue, I cannot imagine what the consequences will be.
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Our most pressing issue is saving for home repairs. Our master bath needs a new shower, we need to instsall a new fence and need to start looking a t a new deck. There’s only so many things you can save for & all of these are big ticket items. So, we just continue to throw money at saving for the said things and go after what needs to be done most.
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Starting to save for retirement… I had saved up $3k while I’ve been in grad school, wanting to start a Roth IRA, but that ended up being my car downpayment last year when the Subaru died. Also I am currently doing an internship where I get an “educational stipend,” which means no W2, which means it doesn’t count as earned income. One more semester of school and then I can hopefully find a job with earned income so I can finally start an IRA.
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(1) I feel as though I am underemployed and I am frustrated that I cannot find a second job. My primary job has excellent benefits and it is stable. However, the hours are weird so it is difficult to find something to do on the side. We live, what I would call, a comfortable lifestyle but I would like to earn more because you never know what could happen and we are in the midst of purchasing our first piece of real estate. Thus, I’d like to slowly rebuild our savings.
(2) If I stay with my current job (or somewhere else within the union) for five years, I will be vested in the pension. If I leave before that, I have nothing to show for it. I have NO clue what I am doing in life so it’s hard to make a decision relative to that. Because of this, I would like to start focusing on my own separate retirement soon. I would also like to go back to school but for what I don’t know.
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Our most pressing money issue is that my health interferes with my career life. My doctor has repeatedly told me to go on disability for my heart, fibro, and other issues. But I struggle to justify that. There are days I can work. So I’ve become a job-hopper trying to find a job that can handle my health issues. I just see so many people with missing limbs, in wheelchairs, with mental/emotional problems, that get out each day and make life work for them. I keep pounding my head against brick walls trying to make my life work for me. There has to be a way! What the heck am I missing? It’s so darn painfully, exhausting.
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I think your desire to work to support yourself rather than sit back and take the easy way out is incredibly admirable. I think in a utopian world, everyone would have your attitude/drive and the programs designed to help us when we need it most would not be faced with many of the difficulties they are today. That said, if you do come to a point when you are simply unable to do more, don’t run yourself into the ground out of pride
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Rose, I learned that it does me no good to compare myself to others when it comes to what I can and cannot do. Yes, there are people who are in wheelchairs and are much, much more incapacitated than I am with the same medical condition who can do XYZ, but my problems are my own and no one else. We have our own limits with our bodies and minds that cannot be compared to anyone else. What one person can take may be intolerable for someone else and vice versa.
And just like the “Joneses” post yesterday, we don’t know what’s going on behind closed doors. That person who’s able to work full-time with missing limbs may not have a choice at all. I’ve known people who can barely move that weren’t approved for Medicare because of some bureaucratic reasons so they HAD to work. I’ve been in MS support group meetings where people cried because they were so tired of having to do everything while dealing with a major chronic illness. They may smile and never complain (because that’s the noble thing to do), but they are hurting inside and it all comes out in the safety of the group.
The flip side is that some of those superpeople may receive a lot of support from friends and family that we don’t see. I know if I made myself work full-time so much would not get done: cooking, cleaning, self-care, even managing my financial life because I would be so beat at the end of the day/week. There is no one else that would do it for me unless I paid them.
Be good to yourself.
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Yes, what Carla says. Do not compare yourself to others. I have health problems as well (the CFS/Fibro complex). I am doing better now so I am able to work full time, though it is very difficult (work gets every ounce of me) and wouldn’t be able to do it without my very supportive spouse who helps with (well, more honestly does) almost everything else. But I was completely disabled for more than a year. I never expected this because my job was intellectual not physical and in my ‘youthful’ ignorance never imagined that an illness could rob me of my cognitive abilities. But it can and for a time did. This illness affected what I could do day to day more than I believe loosing my legs would have done. Did I look very disabled? No. Was I very disabled. Absolutely.
So this is a long overly personal way of saying, don’t judge a book by it’s cover. There are a host of invisible illness out there (including yours!) that profoundly affect a person’s ability to function. And many people try their best to hide just how difficult things are (again as Carla says) for a whole bunch of reasons.
And a second “be good to yourself” as well : )
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Penny, thanks for bringing up Cognitive Dysfunction. I have it caused by the MS and its a beast. Your intellect is still there, but short-term memory, thinking, and reasoning is affected.
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Rose, pushing yourself when you have the health problems that you have could easily lead to far more serious disability down the road, or even a way more premature death. You really need to listen to your doctor, and your body. You have worked for and paid into disability insurance, and you should utilize it when you need it. And it sounds to me like you need it.
Also, stop to think about the entire picture. If you push yourself so hard now and end up far more seriously disabled, you’ll end up becoming dependent on family members, which is extremely hard on them and your long-term relationships. When they can’t take care of you any more and you end up in a nursing home, which is not the most happy of prospects, you’ll most likely end up on Medicaid, and that will cost the taxpayers far more than having you take care of your precarious health now.
Please, rethink your situation and ask those who love you what they think about it. They are more objective about your situation than you are.
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Buying food. Both my husband and I are disabled; we have no debt, a little in savings and his health insurance just ran out. We are without it for one month and then a county program will help us. His last LTD check was 1100.00 for one month. The last week of Oct is going to be a squeaker, but I’m glad he’s still with us and seems to be stable as far as his health is. small blessings are the best.
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Thank you for reminding me to up my contribution to Harvesters Community Food Bank.
Sorry for what you are going through.
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Underemployment and medical expenses are the biggest issues we are facing.
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#1 Money for the unexpected.
I have no debt, but no savings either. Just when I think I’m getting ahead something unexpected comes up. I try my best to have savings for pre-planned spending (ie. new tires in 3 months or new fridge in 3 years), but something ALWAYS seems to come out of the blue that I never thought of, and I’m back at square one.
#2 Money to Start a Family
How do people do it?!?!
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Paying off credit card debt incurred this year from dental expenses (even though I have dental insurance). My industry is a little shaky right now so I don’t feel comfortable taking the money from my emergency fund. Right now it’s a current balance so there’s no interest, but that will kick in next month. I am planning not to charge anything else on the card and pay it off by January. It’s an Amtrak Rewards card so at least my debt is earning me free travel…
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Most pressing issue is keeping up with bills. Both of us over 60, they cut my hours and pay and my husband lost his job. They cut all hours of us older folks knowing that we cannot easily go out and get another job. Keeping up with bills is tough, we don’t have much to cut out and expenses are climbing quickly. They also threw me and my husband off the medical insurance. We are much worse off then 4 years ago.
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The most pressing problem is tax debt and medical bills. Our small side business got hit hard with right before the recession and we were forced to close the business. My husband lost his regular job 6 months later. He took a lower paying job(lost 1,600 a month but the health benefits help make up some of that loss) We are paying off the tax debt and will be done in Feb!! yay!
Medical bills are always accumulating but we are trying not to go in for every little thing.
We have learned to live on less while still putting some er money away. Kids will be off to college in the next couple years so we would like to have less debt by then because we will try to help them as much as possible. I would like them to be debt free as long as possible because even the younger generation will struggle finding a job and I want better for them.
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As a 44 year old, my most pressing financial issue is balancing retirement savings catchup with spending to have fun now. I’m a bit behind on retirement savings, but nothing too serious (I have 2x my income saved as opposed to the recommended 3x). So I need to find the right balance between frantically saving and making sure that I’m enjoying the life I have right now. There are no do-overs!
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Most pressing would be the need to sell our house, but the horrible housing market. We now have 3 kids and only 3 bedrooms so it’s getting pretty tight. We could probably get a great 4 bedroom house in a better school district for a very affordable payment right now, but if we can’t sell our house, there is no way we can afford two payments.
I’m torn about what things to fix/upgrade so that we have a better chance of selling (need new floors and probably need a coat of paint throughout). But I’m afraid to make the changes and then the house still won’t sell and we’re still packed in like sardines.
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My most pressing financial issue is to pay off my student debt. I am working on that every month, paying more than the minimum payments and budgeting in order to eventually be paying $1000/month on my loans.
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I can’t decide whether to purchase a new Bugatti Veyron Super Sports or an Aston Martin One-77?
Any feedback would be helpful? Not quite as important as some of the other issues posted but still pressing for me.
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I am debating whether to borrow one or two trillion dollars from China and other countries this year.
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I’m in favor to drastic cuts to the Government, and paying off the national debt. I’m no fan of Obama. However, the China owns a very small percentage of the debt.
The majority of the debt is owned by US funds like Social Security and Medicare funds (which is why they don’t grow fast enough to keep up with inflation). The next largest group holding US debt is American businesses and individuals (who bought bonds). There is a lot of it held internationally, and among those China has the most. That however doesn’t mean the China can call on those loans — as they are in the form of bonds that have known maturity dates, and can’t be “cashed in” until then.
I am not saying that owing 16 Trillion dollars to anyone is a good thing (its not), but China isn’t the issue with the debt. China is a problem with how much US currency they currently hold. It would be problematic, to say the least, if we ever have a large dispute with them, and they not only stoped producing goods for us, but also flooded the market with US bills (devaluing the currency). They are not likely to do this as their dollar is pegged to ours, and they need our manufacturing for their economy to work.
Paying off the national debt would be a very good thing, and should be the focus of whatever administation comes next. The problem is Romney is defense keysian, and Obama is a social keysian. Neither have a plan that will result in a balenced budget, and neither budget proposal makes anything but interest payments on the national debt.
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Either is fine, since they produce JOBS. Someone has to make your car, and if I worked for either of those companies on the US end (yes, even foreign companies have US workers here in the states), then your purchase means that I stay employed.
Oh, and I should mention this: I am a freelance graphic designer / artist for the time being. When I hear about rich people spending, I get excited. Why? Because often my clients are rich people with nothing better to do with their money than to buy one of my wildlife paintings, which means I have money for food and rent this month.
So if I hear that “Mitt” is looking to spend a lot of money, it means that there’s a possibility that is dollars in MY pocket. Please rich folks, spend more of your money, especially on frivolous stuff (like art!) It means that I, the working class, stay employed and have money for rent and food.
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Our most pressing financial issue is health insurance. My husband gets insurance through his current employer. He is working under a grant that ends within the next couple of months. He works in the healthcare industry. Every other job that he has been offered has health insurance, but the employee expense (for a family of 4) is so outrageous that we could never survive.
We have looked at four different job opportunities, but have no viable options because we can not afford to pay more for our health insurance premiums ($850-$1200/mo) than we do for our mortgage.
It seems that employers are passing more and more of the health insurance costs onto employees.
We have medical issues that keep us from getting our own private insurance, as one potential employer suggested.
It is very sad that my husband can not pursue his career direction of choice because of the insurance piece. I am frustrated that our life decisions are being decided by our health care coverage options.
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Right now is paying off the reminder of my medical debt that I racked up from 2009 – 2011. That medical debt also includes a huge dental bill since I did’t have coverage when I had some work done.
And though this is not a pressing issue, I do want to be independent of SSDI and my life/accident/disability payments which is for life. I am able to work part-time now and hold on to my benefits, but I want more than crumbs. I AM thankful I have what I have though because I know many people in worse situations who have nothing.
I would also like to go back to school, but that’s not happening anytime soon – not in my situation. Though I love learning, I could not justify spending that kind of money knowing I would not be able to even work full-time to pay it off. My compromise right now is taking free classes through Coursera.
I am better off now than I was 4 years ago, but not because of the current administration. I do know if things do change on November 6, I will be worse off 4 years from now however.
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How do you like Coursera so far, if you don’t mind me asking? University tuition isn’t in my budget right now, but there are some free online courses I think would help with my career. Most of what I’ve learned since grad school has been self taught, but I think it would be nice to have some structure.
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I absolutely love Coursera. There are a lot of great professors and a huge support network through the individual class forums. Like any class you still have deadlines, tests to pass, papers to write, etc, but access to information and teachers that would normally be out of reach.
I would give it a go; you can always drop a class that’s too challenging.
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Building our savings back up.
After years of hard work to pay off our debts, we were so excited to purchase our first home. It’s older and needs some sprucing up, but solid. We also now have a baby (surprise!). Still living as frugal as possible to build the cushion back up for unexpected emergencies, college, etc.
In order to achieve our goals, my spouse and I work nearly opposite schedules to cut down on childcare costs. It does take a toll on us from time to time, though, because we really like being around each other!
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Personally, I would like to learn more about investing other than retirement-specific accounts. Also, I struggle with how best to help my family with their money troubles — parents just sold their house and are currently divorcing with (a) Mom in big debt, refuses to budget, and only recently re-employed, (b) spendy Dad who thinks he’s frugal, never pays bills on time, and was recently laid off, and (c) brother who’s currently borrowing a bit of money from me but working hard to make ends meet on an ongoing basis. They each have their struggles and ask for help, but I spend a lot of time giving advice that has been requested only to see them not follow through. Also, with Dad’s lay-off and parents basically broke, they cannot afford COBRA and have an immediate need to find alternative, affordable health insurance due to ongoing medical issues.
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I am 25, almost 26, annual post taxes and benefits base income of 56k in the Bay Area. I have just under 80k in student debt at a weighted 3.9% interest.
I would like to be debt free, I would like to save for retirement/taketimeoffwithfuturechildred fund, and I wouldn’t mind saving up for an engagement ring, just in case haha. How does one balance these three conflicting goals?
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If you figure out how to balance please do report back for others like me
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YoungWorkerBee, you prioritize. YMMV, but in your shoes, I would first focus on retirement – because you are young and investing a little now will pay off MUCH more handsomely in 40 years than if you wait. If your employer has a 401K match, put at least that much away. Otherwise, 10% is a good start. Then tackle your student loan debt. The ring is dead last; you may either not find the right person for awhile, or s/he may not even want a ring. Or you may find you’ve inherited a ring that you can use or one for 10% of the original cost at a pawn shop, etc.
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@YoungWorkerBee: Five years ago I was in the same situation. Now I’m 29, married, own a townhouse, and saving up for kids. My husband and I did 4 specific things in our early-mid 20s to help set ourselves up comfortably despite living in an expensive metro area on average salaries:
1. We immediately started setting aside money for retirement. My retirement contributions (10%) are automatically deducted from my paycheck, so I’ve never seen this money and don’t miss it at all.
2. Keep housing costs low. This is the single biggest area where our savings came from. Take advantage of the fact that you’re young, single, and highly mobile. When else in your life are you going to be able to split housing costs with your parents or friends? Certainly not when you’re married with children.
By my calculations, the decision to live with parents (me) and split costs with roommates (him) saved us at least $1,200/month versus each of us having our own 1-bedroom apartment. After 5 years, this added up to at least $48K, which we put toward our downpayment.
Bottom line: live like a college student for as long as you possibly can, because your housing costs will only go up once you get married/have kids.
3. Drive an old but reliable car for as long as you can. Think about it: you could buy several diamond rings for the cost of a new car. In fact, you could do a lot of things with that money. My husband is the perfect example: bought an old Chevy for $1000 cash in 2001, still drives it today, but now he has paid off his student debt, I have a diamond ring, and he had enough savings left over to buy his dream car with cash.
4. Build your career and keep learning new skills. We were able to save more because we earned more. I’ve been promoted 3 times in 6 years. My husband’s salary has more than doubled because he is constantly learning new skills and he never says no to an opportunity or project. The key is to channel that extra income into savings, not lifestyle inflation. (see #2 above RE: college student lifestyle)
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Our most pressing issue is paying off our second mortgage, which we took out to buy a car two years ago. Also- we decided to do a couple expensive things this year and so we need to build our emergency fund back up.
It’s not bothering me too much though because our tax refund in February will take care of most of the rest of the second mortgage and that’ll free up our monthly budget.
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I am thankfull I never had credit card or College debt, but didnt have a decent income untill I was 28, so at 42 I’m behind on retirement. I have a small IRA that I need to roll over into my 401k and some company stock, that and the fact that I’m on Fedral Railroad Ret. and not SS will help tremendosly when I pull the pin. (For those that dont know; Railroad Ret. blows SS out of the water.) I know I need to raise my 401k contribution and keep putting cash away. I fear economic turmoil in my retirement years more than about anything. We cant do anything about our health other than leading a healthy lifestyle so I cant fret about that. I will be able to fully draw RR ret. at 60 but dont know if I will be able to afford it. Healthcare and ones ability to pay for it is the 500 lb. gorrila in the room. Dont have nursing home ins. as it is damn expensive, and will I need it? Many here mentioned college for kids. Mine is only 6 and she will get some help from me however I can, but I will not bankrupt myself to put her through 4-6 yrs of school just so she can go to work at a Kum & Go store. I have seen it happen and that scares the crap out of me.
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LTCI is very expensive.
http://insurance.mo.gov/consumers/LongTerm/insurance_costs.php
I worry about it some. But I am afraid that even if we could afford it we would be denied. I think I will try to concentrate on improving my health and making our house as user friendly as possible.
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Honestly, my most pressing financial issue is staying focused on my financial goals. We are paying down credit card debt and saving for a house (focused about 90% paying off debt, and 10% saving…I know that’s probably not the “ideal” model and it should all go to debt first, but it was too depressing to never see our little nest egg grow, so I guess we’re paying a bit more on the debt but purchasing a little sense of accomplishment, too…don’t judge!). We’re really good at going all-out throwing every extra penny at these two goals for a couple months at a whack, but inevitably, it seems, we get side-tracked by something and lose the laser-focus and vigilance required to meet our plans. So then our discretionary spending rises a bit, we pay less on the debt and save less for a couple months, and then we realize it and get all fired up again. So figuring out a way to stay on top of our goals without beating ourselves over the head with our finances daily…that’s my issue.
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Our most pressing financial concern is paying down our student loan debt. I was the first person in my family to go to college, and it was drilled into my head my whole life that I HAD to go to college at any and all costs – my family saw it as the only way out of the cycle of poverty. They’re probably 85% right, however, I really wish someone had recommended I NOT go to private school. My loans are excessive. But we don’t carry any other debt – old used car, and credit cards are only used if we know when and how we’ll pay them off.
In general we’re really doing just fine – good jobs, decent pay, and health insurance. We just have to get the loan bill down so $800 isn’t going out the door every month! We’re putting all of our effort here and have made really good progress this year and we’ll keep on working at it.
In short – we (and our families) are better off now than we were 4 years ago. Though I’m a firm believer that the president can’t effect the economy as much as people like to think. However, he can determine what kind of safety nets exist and for that reason I’m happy with how the last four years have gone.
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My biggest concern now is affordable housing. In my city, there is less than a 1 month supply of houses and those are getting bought up by cash investors.
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My biggest issue is saving for a down payment. I know that that’s an awesome “problem” to have, but it’s still a problem nonetheless.
My savings account doesn’t keep up with real inflation, bond yields are almost 0 (thanks Ben), and the stock market is dangerous to begin with for savings, let alone the fact that it’s on heroin right now. So, I have no place to reliably and safely grow my savings. Thank goodness I’m not reliant on fixed income for everyday expenses!
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Student loans.
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We’ll be dropping down to one steady income next year, and hopefully bringing in some irregular income. That’ll be a new challenge.
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My most pressing issue is that my husband recently had to move to part time work due to a disability, and my children are feeling the impact of that same disability. I should be moving to a shorter workday to be there for the children, but cannot do so on my husbands lower income.
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Finding a new job. Preferably that pays more.
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My most pressing financial issue is my lack of a passive income portfolio. I want to accelerate my portfolio but it is challenging when you are tied to a 9-5.
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My biggest issue is paying off medical and vet bills. I’m back in school and living very frugally, but it’s hard to make any progress on the bills with so little coming in. Luckily I don’t have any other debt.
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I am keen to see my home equity go in the right direction. I have a 6.5% interest only mortgage which I plan to refi to 3.125 for 15 yrs. I will have to pay PMI for awhile but I don’t think I can make much progress on the principal otherwise.
I am better off than I was 4 years ago on most fronts.
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The paragraph about the Australian health care system covering Australians travelling abroad for a fee paid to the government is unfortunately for me, not correct. If Australians want to travel abroad they purchase a private travel insurance policy to cover their health care costs overseas. I don’t know where the original poster got that idea from.
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I only have my two year degree and I have debt on it. Although I grew up lower middle class/poor, I’m grateful that I have this opportunity.
However, I graduated during a broken economy and settled for a job where being able to afford food and gas was a sign from God for me. I read these responses and wish my only concerns was if/why I couldn’t max out my IRA or homeowner’s insurance. God will provide you as you already seem like you have your financial house in order…
For me, paying down my debt will be a weight lifted. I pray to God and trust in his faith that he’ll guide and save me.
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I just want to make the comment that “free” health care is not free. Taxes pay for it & in our country when 47% of the people aren’t paying taxes, then the 53% of us that are will have to shell out more money for them.
My most pressing issue is retirement. I need to beef that up & educate myself more on investment strategies.
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This is a great topic, and very timely for me. I am 1 year out of a major financial turnaround, so my biggest concern is rebuilding my finances, so I can continue to move forward. 4 years ago, I owned a house, a car, and was solvent, more or less. Last year I finally accepted that I could not afford the house, and the car (having been paid off a year earlier) had transmission probs and needed other costly repairs. I drove it till it was just about dead, and then sold it to an auto auction, who gave me a decent price, in spite of everything. So I was house-less and car-less. I moved in with a family member, which was a good move, and I help with all of the expenses. I’m paying a lot less than I did when I owned the house, so I’m able to save every month. I usually borrow someone’s car when I need it and insist on putting gas in their car as thanks for the favor. My life and work are now based from home, and it’s really been an adjustment. But ironically, I’m much better off now than I was 4 years ago. I don’t have a seriously underwater house. I don’t have an ailing car. I save and budget and track my spending and saving all the time. Tracking has really saved my financial life. It keeps me from making impulse purchases and using coupons that I really don’t need.
Any words of wisdom I would have would be to:
1) Look at your housing situation and ask if you can really afford it. Can you do better?
2) sign up for a blog like this and take notes on how others are coping.
3) Track your spending constantly. I’m a life-long thrifty person and I can still over-use coupons and spend a little too much. Try to go days without buying ANYTHING. That was a real eye-opener for me.
4)Track your savings. Adding to it whenever you can will really bring your mood up.
5) Sell stuff you don’t need. I have a set of Hausenware cannisters that will probably net about $50. I never use them. That could be money in the bank for my next car. Getting rid of stuff also helps with decluttering.
6)Take care of your health and add balance to your life. Do things you really enjoy. Spend time with people you love, until they start to annoy you, LOL.
7) Get out of debt, as soon as you can. It’s a real slippery slope.
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My most pressing issue is planning. My husband and I have been married two years. We both have good jobs/incomes, and the only debt is mine, on the mortgage for the condo we share (I bought it years before we were married and it’s remaining my asset, at least for now). We both have strong emergency funds, though I have much more in other savings than my husband. We spend on eating out, travel, and a bit of shopping here and there, but are not reckless spenders.
We have simply not made planning a priority, so I know we are “leaking” money in some ways and aren’t setting ourselves up for the future as well as we should. I have three, yes three, 401ks, only one being the current company. We don’t have wills or any associated documentation. We have gone back and forth on buying a house. We have vested stock that we’re sitting on, wondering if we should sell. We don’t yet have kids but are trying, so that’s looming out there (not only the cost of a child, but possible infertility treatments; we are starting late).
We both work 50+ hours a week and travel for work. We have simply not made this planning a priority. It feels like there is so much to tackle, it’s tough to begin. However: we recently bid on and won three hours of financial planning as part of a charity auction, so I’m hoping that is the kick start we need to get us going.
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My most pressing financial issue is increasing my entire net worth – savings, retirement, etc. In September 2008, at the start of the economic downturn, I was $57,000 in debt. I was in my mid-30′s, and I had $0 saved for retirement. I did not own a home, so I wasn’t underwater. All of a sudden, the market crashed and people were losing their jobs, homes, everything. It realy shocked me out of my funk, and I started working like a fiend to turn my finances around. Today, I have a net worth of over $150,000, and it’s the first time in my adult life that I have a positive net worth. I was sucked into student loans and credit cards from the time I was 18. I hope to have $250,000 by the time I turn 40. It’s not much, but I will still have 25 years left to work. I hate to say that watching others suffer through their financial problems really helped me, but I didn’t feel so alone anymore. I’m grateful for the wake-up call.
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