Due to the giant snow storm in my part of Canada today my plans for my day off were cancelled and I ended up having a long phone conversation with a good friend who doesn’t use computers and isn’t aware that I have a blog. The blog is a bit of a secret because my employer would not approve and I have not told most of my friends and relatives. Anything about my friend’s finances are no secret to my blog-aware friends as she does not keep many secrets.
She and her husband are both in their early 50s, she works part-time, he works full-time and they do not have work pensions. They also have very little savings but today she told me that they had booked a Hawaiian vacation to 3 islands and planned to see everything and do everything. I am not sure what everything in Hawaii is but I think it is expensive. Especially when they are flying from our part of the world which is about 4,650 miles/ 7,483 kilometers away as the crow flies and even further when you are in airplanes. “How can you afford it?” I asked. I asked because I am very familiar with her financial situation. “I put it on our line of credit of course” she replied. “That’s what it is for”.
About a year ago she was very angry and disappointed by what was going on in her social circle. People they have been friends with for decades have started to retire, or announce retirement dates, book lengthy trips, sell their homes and move to vacation properties and all the other things that people with well planned futures do.
She announced to her husband that she was going to retire too. He wondered how she had planned to do that and how she would continue to enjoy meals out and long weekend shopping sprees to American cities just over the Canadian border. She was not very happy with him.
Her failed retirement announcement led to our first luncheon conversation last year about money and retirement planning. She asked me how come those around her could afford to retire and she couldn’t. I explained that her other friends had probably saved for retirement for years and that some were also lucky enough or smart enough to work for employers that had pension plans. She was not aware that all these years, when she and her husband had been spending every penny, her friends were squirreling away money.
She just thought that when the time came to retire it just happened. She explained that her parents had retired and lived well. I mentioned that because her father had worked for a major utility company he probably had a pretty good pension plan.
We chatted about saving and planning for retirement and she decided they should start to plan. That was last year. This year there is a line of credit.
I wonder if we should have a little chat about the dangers of lines of credit when she returns or if I should just mind my own business?
Your advice won’t help her as she probably won’t listen or appreciate your advice. If you want to keep her as a friend, just be there when she needs a shoulder to cry on.
She is a good friend but I do not think she is interested in changing or learning. I am not good at listening to people complain about problems they created and do nothing to fix.
Wow, just wow. Sadly, I think people like this are more of the norm than the exception.
In America, a lot of the older folks have pensions to rescue them from their poor decisions and lack of savings. I fret for younger folks though. I hope Wal-Mart is hiring lots of greeters in about 40 years.
One of the saddest things I saw was an 80+ year old lady working at McDonalds a couple years ago. I worked there when I was 14 and remember how miserable the job was. My knees would ache after standing for 8 hours. I can’t imagine that this lady was doing this job for any other reason than she needed the money. I think about her often and it motivates me to save until it hurts.
I stand all day and I don’t think that I will be able to do it for decades more.
I always hope that those older people are working because they want to. That it gives them social interaction and keeps them busy. I don’t like to think that they are working because they have too.
“I always hope that those older people are working because they want to. That it gives them social interaction and keeps them busy.”
Yeah, that is what I tell myself too. Boy oh boy though, I hope it never comes down to working at a fast food joint or Wal-Mart. Ugggh.
I guess I would pick the fast food joint over Wal-Mart if it comes down to it. McDonald’s and the rest usually give a meal allowance for each shift so I could be paid and get a free lunch.
I have a friend like that and have learned that if you start going there and don’t MYOB, it’s just crazy making. Mid-40′s, makes a decent living but has zero impulse control and has the zero retirement money saved and mid 5 figure CC debt to go with it. I’ve also learned that this kind of person’s definition of NEED is far different than mine. I’ve never classed a Disney cruise as a “must have or surely I will die”.
They’re your friend, you don’t want them to suffer. But there’s suffer (a bit) now or suffer later. They’re choosing to suffer later, you’re choosing it now. It’s simply an inability to delay gratification.
You’ll just have to bite your tongue in 10-20 years when they start bitching about not being able to make it on CPP and OAS and how it’s so unfair that they have to keep working to keep the bills paid and moaning about how they’ve been so “unlucky” compared to other people.
I am not good about biting my tongue but you are right. I will not put up with a lot of complaining when they are broke later and can’t afford to do anything.
There should be an exam that comes with a line of credit. Some sort of financial competency exam. At the least there could be a one hour course in how interest charges are calculated and how much that line of credit purchase might cost them in the years it takes to pay it off.
Would it damage your relationship if you lectured her about it?
She is pretty blunt and if she didn’t want to talk about something she would just say “I don’t want to talk about it”. I haven’t decided what I will do. If I talk about my own finances she usually talks too.
I hope my employer doesn’t find out about my blog as well. I could be in deep trouble! I don’t post anything negative or anything like that, they just wouldn’t like it.
I forget Johnny, where is you said you worked again?
The military! Marines to be specific.
Not at all what I expected so it leaves me wondering if the letters LOL aren’t needed here.
lol, its different, but its still a job!
I have it narrowed down to 2 jobs I think you do. Bartender at Hooters or cosmetician at a funeral parlour.