Last week, a guy came to my office and asked if I was the Wil Stanton that taught Personal Finance. He had a problem that he needed help with, and he didn’t know where else to turn. He and his wife have a mountain of debt, and they are afraid that they can’t get out of it.
As is standard in these circumstances, I asked him to bring in copies of all of his bills, along with copies of all of his income for a month. In order to find out how bad things are, I have to be able to see the entire picture. What he showed me was 19 credit card and unsecured loan statements where the MINIMUM PAYMENT on each added to over $7,000.00! I noticed that he only brought in credit card statements, and not rent, utilities, or anything else. That’s when he told me that he and his brother-in-law had bought a house together and his portion of housing expenses were another $4,000.00.
He only makes $3,000.00 a month…, his wife doesn’t work because she is caring for their one-year old son…, and he is only 32 years old!
I’m not going to go into the details of the plan we are working on, but I will tell you that there is no good answer for him. He is really screwed here, and all of the ways out will keep him screwed for a long time. What is important to note is that he is just now learning some of the basics that young people need to have drilled into them if they are to avoid this same situation:
- Keep track of your spending
- Try to avoid wasteful spending
- Communicate openly with your spouse, family, or other people who might be able to help when you are in a bind
- It doesn’t matter how bad you think things are, there is always a way out as long as you keep following the principals of personal finance that Finance For Youth teaches.
I’ll try to keep you updated on my new friend, but I don’t know that he is going to be able to remain strong enough to keep doing what I told him was the first steps to financial recovery.