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?