Don’t judge each day by the harvest you reap, but by the seeds you plant.
― Robert Louis Stevenson
Linda was widowed at 34 years old and now a single parent raising two children. One an honor roll student in her sophomore year of high school and the younger a trophy recipient in junior high track and field. Pole vaulting is his favorite area to compete. By outward appearances, things look good. Her job as an insurance agent brings in a decent paycheck. So why isn’t there money enough to make ends meet without piling up credit card debt? Debt keeps growing but her income has plateaued.
At the time I met Linda, she was overwhelmed by the state of her finances. She’d taken financial classes. What was she doing wrong? What could be done to set things on a better trajectory?
Judging past mistakes does far less good than simply reevaluating financial choices that have already been made. Judging oneself negatively is counterproductive to change, and can result in depression, while contemplating what has influenced spending habits up to this point proves helpful to bettering the current situation.
Several valuable insights came out of our coaching session. For starters, Linda is now a sole provider. While Rich was alive, there were two incomes. The home they bought for their family eight years before his unforeseen death had qualified for a $375,000 mortgage based on a two-income household. The lender required a mortgage insurance policy be bought that would benefit the lender. But being young and healthy they saw no need to buy mortgage life insurance that would pay off the mortgage should the purchaser pass away. In hindsight, that would have been beneficial to the stability of their family’s financial future.
Thankfully, Rich’s $100,000 term life insurance policy helped his family until those monies ran out six months ago. Some serious decisions are needed to put this family back on solid financial footing. We came up with three options: The first option is to sell the house and use whatever equity remains to settle into more affordable housing. For the sake of the children, the goal is to remain in the same school district. Both are excelling; so the less upheaval, the better. Another possible option is to investigate refinancing the mortgage at a lesser interest rate. This could lower the monthly payment enough to allow them to remain in the home they love. The third way to find added cash flow each month would be to rent out a room to a trustworthy individual.
Don’t waste time thinking about the “What ifs”. What if Rich hadn’t died so young? What if there had been a mortgage life insurance policy? What if the Lexus hadn’t been bought? What if a used car would have made more sense?
Accept your circumstances. No “what if” can erase anything that happened in the past. Stop beating yourself up, climb out of that pit of judgmental thinking and look at a list of possible solutions. This might be the perfect time to sell the luxury car, dump that big payment, and get behind the wheel of a more modestly priced vehicle.
Remember, debt is a temporary condition. Speak up. Communicate inner struggles with a trusted partner or friend. Don’t remain silent.
With your help I can advance against a troop; with my God I can scale a wall. 2 Samuel 22:30 NIV
