But regretfully, my neighbors think it is. My lovely neighbors have been having issues and some money problems this past year. I'm getting concerned about the money problems. So many red flags are being tossed up it's scary!
At a holiday party, one of them won a home theater surround sound system. A very nice one I might add. They have an older TV and have said that they wanted to replace it. Two weeks ago they got a delivery of a 40 or 42" Sony Flat Screen Plasma TV. I was given their old surround sound system (still not installed, I need a new set of wires to connect to the TV). I offered to give them some money for it and they said no.
Fast forward to Wednesday night. I stop over to drop off a six pack and some of their mail that ended up in my mail box. The six pack was a thank you for the surround sound and in my mail was a disconnect notice from the local electric company for either this house or the apartment they are footing the bills for for their oldest daughter. Our local electric company sends out envelopes with a large IMPORTANT NOTICE on the front so you won't miss the disconnect notice.
We get to talking since I've not seen them for a few days. Here is the very scary part. My neighbor tells me that she owes $900 to the IRS and she is paying it by credit card. And she then tells me it's great timing that they got this new credit card since they have no money set aside to pay the IRS. She also tells me they put the new Plasma Flat Screen on the credit card as well and she will go to the bank, get a cash advance and pay the overdue electric bill, plus a few others.
Seems my neighbors got a new credit card about a month ago and have been having a grand time using the card. Hence the new TV. I was caught speechless. It's pretty hard to leave me speechless, but I was.
A couple things bother me
1) My neighbors husband has been running his own business for a number of years, they don't pay quarterly taxes, so each year at tax time they know they owe money and each year they put it on a credit card. They do no planning during the year to save for the payments or make any kind of estimated payments each quarter. They asked me what I did about my part time cash jobs I declare and I told them that I set aside a portion of money each quarter and pay estimated taxes so I'm not caught totally out come tax time.
2) Their oldest daughter is going to college and has moved out of the house to her own apartment. Her parents, my neighbors, not only help pay tuition, but have also picked up a large majority of the apartment expenses BECAUSE oldest child is either unwilling or unable to work more hours or get a cheaper place. My take is she is unwilling to work more hours or get a better paying job because it is easier for mummy and daddy to pay the bills. Like most 19 or 20 year olds, she would rather hang out with her unemployed boyfriend and listen to music. I see her at the house a lot eating meals,doing her laundry and oh, yeah, leaving the electric heat on 70F when she's not home.
3) My neighbors have been thinking about a new TV for a few months. I can attest to the fact that their old TV was starting to die. It may be time for a new one, but a new 40 or 42 inch plasma bought on credit?
4) They have no savings account and have already maxed out a HELOC and another credit card. They now consider this Credit Card their savings account.
I'm sure there is more I can add to the list.
I know how we all choose to spend our money is our own business, that's what makes personal finance personal. BUT it is distressing to see the above. Especially since I've had frank discussions about my own finances with my neighbors. My neighbors wife has asked me on a number of occasions what I'm doing with my money and budgets post Bankruptcy and I've told her that pretty much I live a cash only life and budget/plan for my expenses. Like my March trip, which was all in cash, save for a limited amount of items I put on my credit card, but them promptly paid off within three weeks of returning home. My new TV was paid for in cash once I saved up the funds and I set a price limit. I will have the money by the end of next week to FINALLY purchase a new lap top, again with cash.
The very scary part is even with the best of intentions, I know my neighbor won't stop buying things with the new card. I've seen them burn through a $20,000 HELOC and for what ever reason, they have a really hard time saying No to their kids and seem to be constantly forking over cash or buying items for both girls. All I can say is a new credit card is not an E-fund.
8 comments:
It makes me both angry and sad to hear that.
I want to say: Well...... it's not OUR money, but it makes me feel like we're not helping our fellow persons and doing our part to help them in any way we can.
Yet, how do you bring that up? "hello, I've noticed that you are in financial trouble and I'd like to help"
First, they have to get out of denial (step #1)
Second, people feel way more comfy with a stranger not with their neighbour who will judge 'em every single day before, during and after..
*sigh*
Third.. some people don't wanna do it. They don't want to budget, they feel restricted and sick. :(
Hard questions. But we cannot brainwash or force anyone to do anything they don't want to do. I just wish there was a non-threatening way for us to offer help without sounding bossy or preachy.
FB- I think one reason my neighbor has asked me about my BK and what I do post BK is that I had this horrible feeling they wanted to also file. UNTIL I told them that they might have to sell the girls cars (which are in the parents names), maybe sell their house, that back taxes are not discharged and the student loans they took out for their oldest child are also not dischargeable.
Yes they are in denial and I try not to judge them nor do I want to be preachy, it is their money, but you are right, they don't want to budget and I don't think they realize that I work 6.5 days a week so I can take vacation, get a new TV, new computer-but I pay cash and not credit. It's a choice I've made. Ah well, I keep hoping for the best for them.
Wow you have some interesting neighbors there.
I wonder when they will get serious and REALLY want to do something about their situation. Until then all you can do is pray for them.
lulu-they are interesting, very nice, very caring, can be a lot of fun to be with but very careless about money at odd times. They scrimped and saved up to be able to get their house, then a few years later refinanced it and blew through the HELOC. Some money went back into the house-new windows,new roof, some other repairs. I know a lot of money went towards the kids, new laptops for each of them, buying an additional car (4 people, 4 cars), and other things. How do I know this, they tell me far too much.
You said it yourself: It's not your business. I know it's hard to remove yourself from a situation that feels personal to you -- you've been there and you know where they're headed if they don't stop behaving the way they are. And you seem to think they are decent people. BUT they are adults and not your responsibility.I don't mean to sound heartless. (Really, I don't.) In the end, their business is just that: their business. Sure, we've learned the hard way. Maybe this is their lesson to learn.
This is a sad situation but the truth is they are not "sick and tired of being sick and tired" (isn't that Dave Ramsey's quote). You can't want it for them. They will learn when the CREDIT CARDS run out. Just wait until it happens and be there for them to cry on your shoulder.
You guys are right, I can't control what they do. The shoulder, beer and tea will be available when it's needed....
That's amazingly sad that they can't keep from spending on their credit card. Not only that but I'd take a bet that this is either their 2nd, 3rd or 4th card they've maxed out. I hope they have a plan for repayment on each of these things.
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