One Snarky Chica with Issues

Now that I have started to get a grasp on my finances, it pains me to see other people doing things that are no so smart. When I see this happen I assume that they just do not know any better. I was once financially illiterate, so I suspect that might be the problem. And I sure wish someone had enlightened me at the time!

With that in mind, I like to take the opportunity to offer some helpful advice. That is assuming that it is someone that I know who won’t get offended by me offering advice on their finances.

What I have discovered lately is that these people are not financially illiterate - they are financially retarded.

My parents get the gold medal in the financially retarded olympics. Growing up my dad made six figures most years. My mom stayed at home. They owned a home that was paid off. Over the past five years or so, they thought it was a good idea to buy two condos on the beach in Alabama as well as a luxury car, which they traded for another one. Their first condo has a mortgage with a decent rate and a decent payment of around $800 a month. Their second condo has two mortgages and they are paying out around $4,000 a month on it. They are trying to sell this one and also renting it out. When it rents out, it still does not cover the mortgage payment. They have taken out a HELOC on their paid off home to make the payments on the second condo. I suggested that they sell the primary home or the first condo since they have been trying to sell the 2nd condo and can’t. They actually have equity in these two properties though.

They refused. They cited needing a place to live for keeping the primary home and needing a place to retire to keep the 1st condo. They are 55 and 56 years old. My father is not well and made so little money this past year that my brother got pell grants to go to college. And they have a total of $7,500 in an IRA for retirement. My dad is self-employed, so that is it for retirement. The only good thing is that they have zero credit card debt.

My gf’s mother takes the silver in the financially retarded olympics. She recently got divorced (for the 3rd time from the same man) and moved in with a sibling because she cannot afford to pay rent on an apartment. She looked - but the cheapest place was $550 a month. She is a chain smoker ($$$), she just bought herself a new 32″ HDTV and a Wii (why?), bought tickets to go to Vegas for the summer, frequently goes to casinos nearby, drives three hours each weekend to visit grandkids and has gifts for them each weekend. These are not small gifts either. She just promised the oldest one an X-box the next time she visits (which will be next weekend). She is 55 (?) and had around $15,000 saved for retirement. She is in a lot of debt, despite declaring bankruptcy a few years ago. And she does work as a teacher, but just changed to a new school after the divorce and is really counting on a pension for retirement. Sure hope she does not lose her job before she retires.

And a friend of mine takes the bronze in the financially retarded olympics. She lives with her parents and has for the past six years. They do not charge her rent. She makes $45,000 a year. She does not participate in her work’s 401K nor does she save any money. She paid off her car last month and promptly bought a Wii - on ebay - for $500 - instead of going to the store and paying $249. She complains about never having any money and living paycheck to paycheck. She, somehow, has a few thousand in credit card debt. She proudly tells me how many DVDs she owns (898 last I heard) and spends most of her spare time at the mall. She’s 30 years old, time is on her side still with compound interest - I’ve been telling her this for some time. Retirement savings? Just around $3,000 that her work put in a pension for her. She also has a weakness for the casinos near her home.

It is sometimes quite frustrating watching people waste money like this when I have debt, debt, debt. I would love to have their money that they waste to use to payoff some debt! Oh well, at least I am no longer financially illiterate and definitely not financially retarded!