Tag: Money Stress

Money Stories: Debt Anxiety Was Taking Me Down, But Cancer Changed Everything

Money Stories:? There were very few things Eleni couldn’t handle. Her mother’s untimely death, the loss of a business, her husband’s injuries, and a special needs son. But managing consumer debt anxiety almost took her down. Then cancer called and changed everything. Adapted from an interview with Eleni Ross.

My financial education was the school of hard knocks…

I don?t remember ever receiving any education in personal finance in high school. I majored in Anthropology in college and frankly, I never thought of taking economics classes because I felt that they were tedious and boring. Everything I?ve learned about personal finance was through the school of hard knocks, just by going through it and screwing up.

I first became aware of personal finances and having a bank account when I was a senior in high school. I had my first job at the dime store in the town where I lived. They paid you in checks, so I had to open a bank account to cash them. After a while, I started getting offers for credit cards in the mail. I think my first credit cards were a Macy’s and a Chevron card.?By the time I entered college, I had a Visa. But I didn?t use it very much. I might buy a pair of shoes, and then pay it off when the bill came.?

Related: Ten Quick Ways to Make Money While Helping the Planet

I was still in college when my mom passed away.

My mom was diagnosed with colon cancer when I was 16 years old. And although she had radiation, it came back and moved to her liver. So, by the time I was college age, mom was undergoing chemotherapy every week. I didn?t want go away to college because I wanted to be there with Mom to support her. So I lived at home and drove to UC Berkeley everyday in a car my mom owned. She paid the insurance and I paid my own gas. I never worried about money then.

Mom left me a small trust and a paid off house…

I was still in college when my mom passed away. I remember that she died in June, right after finals. When Mom died, she left me the house and a bit of money in a trust. There wasn?t a lot of money, but there was enough for me to finish college. And the house was paid for. My uncle was the executor and he would just dole out a bit of money if I needed it.? This is why I didn?t really worry about money then, either.

…but I had no education in personal finance.

After returning to college the next semester, I met my future husband. We fell in love and began living together. He was an auto-mechanic and wasn?t making very much money at that time. After a few months, we actually started to run out of money. ?That’s when I started using credit cards to fill in the gaps.

We started using our credit cards as a type of income.

We started using our credit cards as a type of income. We?d use them to get gas, we?d use them to get groceries, and eventually, by the time I graduated from college, we were carrying some pretty big credit card balances.

Eleni and Rob Ross

After we got married, we decided we needed to fix the house. The house was in significant disrepair. The roof was leaking and the bathrooms and kitchen needed to be redone. We figured we could take a loan out on the house, do some repairs and upgrades, and get a little extra to pay off our credit card balances at the same time.

Our house became an ATM

We live in a very affluent area. Everyone around us drove expensive cars and had expensive toys. To be honest, that lifestyle sort of rubbed off on us. I think it was when we decided to buy a really expensive car that things started to get out of control. The payments on that car were about $500 a month, and the insurance was ridiculously high. But we didn?t really see it for what it was because, by then, we had learned how to take a line of credit on the house. This was in 1999, and it was the beginning of a long spiral.

Related:? DIY Credit Card Debt:? A Guide to Permanent Debt Relief

We wanted to fit in with our environment. We wanted to be like everyone else…We were young and naive, and we just couldn’t see over the horizon. We couldn’t see what was coming.

Looking back, I can see how we began to use the house as an ATM. We?d rack up the credit card debt, and then we?d refinance again. We?d get a line of credit, pay off our car loan. We’d buy a new car and do it again. This became a pattern. But the reality is, we just didn?t need a fancy Mercedes Benz or a brand new BMW every few years.

Keeping up with the Joneses was a trap.

I believe now that we felt really pushed to keep up with the Joneses and be like everyone around us. But we just didn?t get that we didn?t have the money for that. Property values were skyrocketing at the time and it was super easy to get refinancing. Like many people during this time, we would use home appreciation value to justify these purchases. We were young and naive, and we just couldn’t see over the horizon. We couldn’t see what was coming.

Related:? Why We Love Rules of Thumb…Even Though They Suck

Having our son changed everything.

For a while, things were ok. The payments weren?t astronomical and we were both working decent full-time jobs. I was working for an auto body shop when I got pregnant with our son.

Our son was born slightly autistic, and I didn?t want my son to be raised by babysitters. I wanted to be there with him everyday. So I decided to quit my job and go freelance as an independent auto-appraiser so I could raise my son myself. The downside was that my pay was no longer consistent. That’s when things started to get out of control.

I started using credit cards as an income patch to cover our monthly expenses when my pay came up short. I’d refinance the house again to try and manage the credit card balances. But this time, I actually kept it a secret from my husband. I was afraid to talk about our financial problems because I wanted him to feel that everything was ok. I didn?t want my husband to worry and I wanted to be able to raise my son myself.

I was afraid to talk about our financial problems because I wanted him to feel that everything was ok.?

But the truth is, it just wasn?t sustainable and I knew this. My income was inconsistent and the credit card interest rates were climbing through the roof. I was ashamed that couldn’t make it work, but not telling my husband was the biggest mistake I made. Not talking about money made everything worse.?

Related:? Women and Money:? Why Aren’t We Talking About it?

We looked for ways settle our debt…

Eventually, our financial situation forced me to give in and get a full-time job at a high end auto body shop. While I was making an excellent salary, it was an incredibly stressful position, and I had already screwed us with the high interest debt. So not only were we still struggling financially, I had a lot of debt anxiety and was totally stressed out everyday.

I decided to hire one of those sketchy credit settlement companies because I just couldn?t refinance the house anymore.

I also decided to hire one of those sketchy credit card settlement companies to handle the credit card debt because I just couldn?t handle it anymore. The stress of the job, the debt anxiety, and the threatening phone calls from collectors – it was taking a toll on me. When the credit settlement company told me to stop making payments on my credit card bills and pay them instead, the phone calls finally stopped, but my credit score went into the toilet.

Related: Know the Wolf:? Credit Counseling vs Debt Settlement

… and we started a business.

Meanwhile, my husband decided to start his own auto repair business. We knew things would be tight at first, but we had a good business plan. There were some months in the beginning where he didn?t bring in any money at all, and our mortgage began to fall behind. I became scared that the bank was going to foreclose on our house.

This was in 2008, right when the subprime mortgage crisis was exploding, and, of course, I had a crappy subprime mortgage. On top of that, we discovered that our business partner was not only ignoring the bills, but was also actually stealing money from the business! We had to hire an attorney and kick him out. This definitely set us back.?

Finally, my husband’s hard work paid off and the business started to pick up.

For the next two years we were hurting badly. I remember my son even had holes in his shoes. I hated my job, but I was stuck there because we had nothing else. I began to experience constant anxiety. Everything was slowly falling behind but we hung in there. Finally, my husband?s hard work paid off and the business started to pick up. Things were going really well. At last I felt that everything was going to be ok.

A car came out of nowhere.

In 2010, just when our luck was turning, my husband was struck by a car making an illegal U-turn. The car hit his motorcycle and broke his foot. He couldn?t put any weight on his foot. He had to put his leg on a chair and try to finish the cars he had in the shop. He also had to hire someone to help him. As a result, he couldn?t take in any more new business.

Just when we thought we were starting to pull out of financial hell, my husband?s injury brought us right back down. We decided we would have to close the business after all, and when the business lease came up for renewal, we let it go.

Just when we thought we were starting to pull out of financial hell, my husband?s injury brought us right back down again.

Eventually, my husband?s foot recovered and he got a job at a shop as an auto mechanic. But the injury to my husband?s foot had weakened his strength due to inactivity. And shortly thereafter, he blew two discs in his back at work. He was in incredible pain and had to go on disability again. We were back in the struggle to try and cover our mortgage.

Close to the brink: the threat of losing our home.

This is when I tried to do loan modifications with my mortgage company. First I was told that we made too much money. Then they?d say I didn?t make enough money. I thought that my husband?s disability might make a difference, but the bank always came up with a different excuse as to why they couldn?t approve us. I think I tried to modify the loan about 6 times during this period.

Our subprime mortgage had originally been with Wachovia, but it changed hands about 3 times within in a year or so, eventually ending up at Wells Fargo. It seemed that I just couldn?t get anywhere with it. It was crazy. I was always asking, ?Who am I paying now?? By this time it was 2011. And we were finally warned of foreclose.

Related:? Divorce Your Bank in 8 Simple Steps – Who Are You Trusting with Your Money?

By now it was 2011. And we were finally warned of foreclose.

Still, I kept looking for ways out. Our son?s school district had a great program for special needs kids. He even had an aid that attended all of his classes with him to keep him on task. I didn?t want to disrupt his life. I needed to keep my son in that school district. So, even though there was equity in the house that could have dug us out if we sold, I refused to give up trying to save it.

It was Christmas 2011 when I received the phone call that turned everything upside down. My routine annual physical and mammogram resulted in a phone call. I was told I needed to return for an ultrasound, then again for a biopsy. Two days after Christmas, the hospital called me at work, and all I heard was, ?Bla, bla, bla, you have cancer.?

I remember locking myself in the bathroom at work and completely falling apart. Everything stopped. In that moment, sobbing uncontrollably, I just didn?t care about money anymore. I couldn’t even think. I had to have my husband pick me up from work because I was too upset to drive home.?

Two days after Christmas, they called me at work, and all I heard was, ?Bla, bla, bla, you have cancer.?

How cancer saved my life.

Ironically, I still say that cancer saved my life. By the time I got that phone call, I had gained 70 pounds, was stressed out of mind, and my blood pressure was through the roof. If cancer didn’t stop me, something worse may have.?The constant pressure to chase the dollar, to move money around to cover this and that liability, the overwhelming debt anxiety, was slowly killing me. But when I got cancer, all of this just stopped. It was a wake up call. I just let the debt anxiety go.

Because my husband was also on disability for his back at the same time, he was able to stay home and support me through the cancer, which helped me tremendously. It turned out that although I had to have a mastectomy, I didn?t need radiation or chemo. I actually recovered from the cancer in 5 months, and I am still cancer free today.

When I got cancer, all of this just stopped. It was a wake up call. I just let the debt anxiety go.

Learning to let go.

After I had fully recovered, the thought of returning to that high-stress job overwhelmed with me anxiety. This time, I just wasn’t having it. I told my company I wasn?t ready to come back, and they insisted that I get a doctor to justify the extension.

When I talked to the doctor about my anxiety, the doctor told me to take antidepressants and get back to work. But I didn?t want to take antidepressants. So, I started seeing a psychologist instead. I told my psychologist, ?I just don?t want to do this anymore!? He responded, ?Then, don?t.? So, I went in and quit my job.

The doctor told me to take antidepressants and get back to work.?

Now, I knew this was a risk. But I had talked to my husband about it, and he was very supportive of my decision to quit that job. I had been living with debt anxiety and trying to save our house for years. But cancer made me realize, ?You know what? You only get one life!?

I hadn?t been spending enough time with my family and everything felt wrong. What’s more, I started noticing this in other people’s lives as well. I could see that there were a lot of people in our area who drove fancy cars and seemed to have tons of money – ?but who were absolutely miserable. Joneses or not, I knew I didn’t want any part of this anymore.

At this point, I was at constant risk of foreclosure, had no job, no income, no credit, a husband on disability, a special needs child…and only one boob! We finally surrendered and filed a Chapter 13 bankruptcy so we could at least save the house. We were able to make the Chapter 13 payments for awhile and were temporarily saved from foreclosure. But one month, we just didn?t have the money and we missed a payment. The Chapter 13 protection was dropped, and the foreclosure game began again.

I could see that there were a lot of people in our area who drove fancy cars and seemed to have tons of money – ?but who were absolutely miserable. Joneses or not, I knew I didn’t want any part of this anymore.

A silver lining through the struggle

A few months later, my husband?s back recovered and he was able to get back to work. At the same time, I also found a job with a much better work/life balance. I was making about 30% less in salary, but I had full benefits again and a company car, so it sort of made up for it.

While we were now finally both making a steady incomes again, I was still constantly filing for loan modifications to delay foreclosure. I think overall I must have made around 12 attempts over 3 years to modify the loan to save the house.?The truth is, the bank simply wouldn?t let us make payments. I told them I just wanted to reset the mortgage and start paying, but they just wouldn?t take our money. It was maddening. They wouldn?t let us put it on the back end. They demanded all the back payments in full. Something like $75,000. We just didn?t have it.

For the entire year of 2013, we lived like squatters in our own house. We never knew when the rug would be pulled out from underneath us, but it just never happened. There was nothing we could do, but wait and find out. And the waiting was brutal.?

They were going to auction the house in 90 days.

Then, in 2014, we came home one day, and there was the foreclosure notice posted right on our front door. Our biggest fear, realized. They were going to auction the house in 90 days. We had to make a move. We contacted a real estate agent we knew to help us sell the house before it was auctioned, because we didn?t know what else we could do.

How we finally saved our house

The real estate agent told me to try for one more loan modification to buy us more time to sell the house by pushing the foreclosure date. Of course, I wasn?t expecting anything, I was just going through the motions again. But when I got the phone call from the loan modification officer, he said,?Congratulations, you?ve been approved!? I was absolutely floored. Just when I’d finally accepted that I’d have to let go of the house, it was saved.

I got the phone call from the loan modification officer, he said,?Congratulations, you?ve been approved!?

Related:? Over 50 Broke and in Debt:? Starting From Ground Zero

What I?ve learned

Though we?ve managed to save the house, the payments are outrageous. But my son is almost out of high school. We will eventually downsize and move to a less expensive area. I’ve learned some valuable lessons throughout this journey.

I now realize that I’ve always looked at credit as available income. And it?s absolutely not.

The biggest lesson I?ve learned was to live without credit. If I can?t afford something today, I just don?t buy it. I now realize that somehow I?d always looked at credit as available income. And it?s absolutely not.

1. Things are not important.

I?ve also learned not to care what kind of car I drive, or whether I am able to buy the things that the people around me buy. Things are not important. Getting cancer and surviving wiped all of that nonsense away. All that is important is my health, my family, and that we are going to be ok no matter what because we are together.

Cancer survivor Eleni Ross and son

2. People need to talk about money problems.

Everybody has money problems. Even people with money have money problems. But people don?t talk about it. You could even say that people with more money have even more money problems.?

Related:? Why We Can’t Save

3. Some decisions are in your control. Some are not.

People don?t want to talk about money because they?re ashamed. But they shouldn?t be because, well, shit happens. You make some bad decisions. Things come up. Situations change. And some things you just can?t control.?

You can?t control getting cancer. You can?t control having an autistic child. You can?t control a Prius making a U-turn around a blind corner when you?re coming around on your motorcycle.? But you can control whether or not you buy an expensive car just to try to fit in. And this is the stuff we need to talk about.

4. Take control of your money before a crisis hits.

Unfortunately, for many of us, we are somewhat blind to our financial mistakes until a crisis hits.?

Unfortunately, for many of us, we are somewhat blind to our financial mistakes until a crisis hits. We go along, trying to keep up with the world, living overextended lives and trying to manage our debt anxiety. We need to get over this money shame because, seriously, I believe it has the power to ruin your life.

Related content: What I Wish My Clients Knew When They Were Younger

5. Gratitude is powerful. Realize how lucky you are.

Today, I am not ashamed to share my story, because I hope that others can learn from it. I didn’t know anything about personal finance before I began this journey. Now I do. But everything that has happened to me has made me realize how lucky I am – to have my health, to have my family, to have my life. Those are the important things. And they have nothing to do with what kind of car I drive.

– Eleni Ross


WellWallet Money Stories is ?a place where real people share their stories of financial struggle, loss, perseverance, and triumph. If you have a money story that needs to be told, please submit it to info@wellwallet.com. We will never publish your name without your permission. You can use a pen name or choose to remain anonymous. Or you can submit photos and go fully candid. It’s up to you. We all have money stories, and we need to talk about them. It is through sharing our stories that we heal, grow and learn from each other.

 

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Your Money In The News – April 8th

This month:? Would you trade your Social Security payments of tomorrow for student loan debt relief today? – The Student Security Act,? 9 tips to lower investment taxes, How will Federal interest rate hikes affect us in practice? Is there a holistic solution to the 401(k)? and more…

Student Security Act:? Would You Trade Your Retirement Benefits for Student Loan Debt Relief? – Detroit Free Press

What if you could trade your future Social Security retirement payments for student loan payments today?

Would you do it?

In a survey of 943 student debtors conducted by LendEDU, 46.3% said they’d be willing to delay their retirement age 22 months, in exchange for $12,000 off their student debt. And more than 30% said they’d trade any amount of retirement deferral time required to wipe out 100% of their debt.

In 2016, Social Security projected that it would run out of funds in less than 20 years if something isn?t done.

This doesn?t give millenials a very bright picture of their future in terms of retirement. Couple this with the fact that 5 million Americans are currently in default on their student loans, with the default rate expected to approach 40% by 2023, and trading Social Security benefits for student loan relief doesn?t seem like such a bad idea.

Enter U.S. Rep. Tom Garrett?s proposal?H.R.1937 – Student Security Act of 2017.

The Student Security Act would allow student loan borrowers to knock $550 off their outstanding principal for every month they agreed to postpone their retirement, thus delaying their eligibility for Social Security benefits. Garrett says the Social Security Administration estimates that his proposal would save it $725 billion over the next 75 years ? in addition to whatever reduction in stress-related illnesses resulted from relieving tens of millions of students of their massive student debt obligations.

While it seems risky to to borrow from your ?future self? over the long run, is it any surprise? Isn’t that the same posture our elected representatives in Washington have adopted toward practically every fiscal challenge they confront?

The 401(k) Illusion; So, How Are We Really Doing? – Harvard Business Review

What happens when an entire generation, many of whose members have worked hard all their lives, suddenly have little to show for it at retirement age?

While the move from company pension plans to employee directed contribution plans (401k) in the 1980?s may have helped companies better meet their quarterly financial targets, it has placed an unmanageable burden on employees.

As a result, the retirement situation has changed dramatically for American workers. Baby Boomers and Gen Xers are currently at risk of not having enough to maintain basic living standards at retirement. And this risk is intensified explicitly by the insanity of rising health care costs in our country.

The problem with 401(k)s:

  • 401ks earn less on average due to high administrative expenses and limited investment strategies.
  • Employees often do not have the investing expertise to manage their own plan and therefore earn substantially lower rates of return then professionally managed plans.
  • At retirement age, employees often do not have the expertise to decide how to withdraw funds, determine a spending rate, and map out a distribution or investment strategy.

Related content: ?Take Control of Your 401(k)

We need a holistic solution.

In their book, Rescuing Retirement, authors Theresa Ghilarducci and Tony James propose such a plan. Their ?Guaranteed Retirement Account (GRA)? requires no new taxes, does not increase the deficit, and actually reduces the administrative burden on companies that sponsor plans. They believe that while business leaders should be coming up with solutions to address the burden they?ve created by pension changes, public policy must also play a role. Check out their proposition. What do you think?

They Rip Off The Most Vulnerable: ?Credit Repair Scammers Strike Again – WTVQ

Scumbag ?debt-relief? scammers are calling people in Kentucky, hustling them to pay a fee in exchange for “a promise” to lower or resolve their debt. Someone recently sent a recording of one of these calls to the Attorney General of Kentucky, who thereafter issued a warning. This particular company is calling itself ?Financial Planning Card Services,? and in the recording, it claims to be able to negotiate your interest rate on your credit cards with any major bank to as low as ?.wait for it?.%0.0. For a fee, of course.

Related content: ?Know the Wolf:? Credit Counseling vs Debt Settlement

The FTC prohibits for-profit companies that sell debt relief services over the phone from charging a fee before they actually settle or reduce a consumer?s debt. And this is because they usually do not settle or reduce a consumer?s debt. In fact, if they do nothing at all, it may be better as they usually make things worse.

The FTC has brought scores of law enforcement actions against these bogus credit-related services and even has a list of Credit and Debt Repair Scams press releases describing them. But it doesn?t stop them from happening. Ranging from credit card, student loan, mortgage and auto loan modification schemes, desperate consumers continue to get duped again and again. Don?t fall prey to these scams.?

The Fed?s Interest Rates Hikes: ?How will they affect us? – Credible

If you are looking to buy a house, borrow money for college, or are trying to pay down credit card debt, an increase in interest rates will affect you directly. This in-depth article tells you how, and what you can do to try and ease the pain. Some takeaways:

Credit Cards

Rates on credit card debt are typically tied to indexes that track the Fed?s moves closely. One option for borrowers whose rates increase is to consolidate their balances into a fixed rate personal loan.

Related content: ?How to Get the Best Personal Loan

Student Loans?

While rates on federal student loans are fixed for life, rates for new borrowers are adjusted annually. So students taking out loans for this fall can expect to pay higher rates than in recent years. Rates on federal student loans to undergraduates can?t exceed 8.25 percent. The cap is 9.5 percent for graduate loans, and 10.5 percent for PLUS loans. Borrowers who do have variable rate student loans may want to look into refinancing with lenders who offer fixed-rate loans.

Mortgages

If the Fed keeps raising short-term interest rates, mortgage rates may follow, but not as rapidly. Fannie Mae projects that rates on 30-year fixed-rate loans will rise modestly this year and stabilize in 2019. Borrowers with variable-rate loans can lock in today?s rates by refinancing into fixed-rate loans. However, avoid stretching your finances by buying prematurely merely to lock in today?s interest rates.

Debt and Stress: ?Should Lenders Help to Lessen the Burden? – Payment Week

Stress and debt are inextricable. But Americans alone are currently looking at a 7 year high in overdue credit card payments, and that kind of stress is palpable.

Of 1,000 debtors owing an average of $13,884, 88.6% reported stress levels directly related to their debt. What?s more, 38.7% felt their debt had stressed their relationships with friends and family.?

While over 60% believe they?ll be debt free at some point in the future, there is a fairly large chunk of people who don?t believe that they will ever be free of debt. This is bad news for lenders who will take a loss if discouraged debtors simply give up.

Related content:? Over 50 Broke and in Debt:? Starting from Ground Zero

Should lenders become more proactive in helping people repay their debts by offering more flexible repayment options such as extending terms or reducing interest rates?

Debtors want to be debt free, lenders want to be paid. Perhaps a more cooperative relationship towards accomplishing this common goal may help Americans rid themselves both of their high stress levels, and their sense of hopelessness that they will never get out from under.

9 Ways to Lower Your Investment Taxes – The Southern

With still one week left before the 2017 tax deadline, here are some final pointers on finding tax savings in your investment tax calculations.

  1. Shift Toward Capital Gains ? It’s preferable from a tax perspective to have investments that rely on price appreciation for returns instead of income generation. Returns on the investments are taxed at the capital gains rate (10-20%) while returns on income generation are taxed per the standard income brackets.
  2. Qualified Pass-Through Income ? The recently passed Tax Cuts and Jobs Act (TCJA) allows a 20% tax deduction on qualified pass-through business income for tax years 2018 through 2025. Be sure to take advantage if this applies to your situation.
  3. Take Full Advantage of Retirement Accounts ? Contributions to retirement accounts are either tax-deferred or tax-free, depending on whether they are funded with pre- or post-tax dollars. Contribute up to the limit or, at the very least, contribute up to the limits of any employer-matching program. If you haven’t fulfilled your 2017 IRA limits, you have until the tax-filing deadline April 17th to make designated contributions to the 2017 tax year.

Related content: ?How to Reduce Your Taxes, Save for Retirement, and Save the World

  1. Allocate Your Investments Wisely ? If you have a blend of accounts, allocate your investments with taxes in mind. For example, stocks that provide dividend income are better applied to a tax-advantaged account to get the maximum compounding effect and avoid taxation on the dividends as ordinary income.
  2. Control Emotions on Stocks ? Resist the urge to sell during market drops like the recent correction ? especially with any stocks or mutual funds that you have held for less than a year. To receive the lower capital gains tax rate on the proceeds, you must have held the stock for at least one year prior to the sale.
  3. Use Tax Loss Harvesting ? Are some of your stocks underperforming? By “harvesting” losing stocks and selling them off, you can offset up to $3,000 of other capital gains and/or ordinary income. If losses are greater than $3,000, you may be able to carry the excess loss forward to neutralize gains in future years.
  4. Choose Passive Funds ? Active fund managers must make more trades to stay ahead of the pack in returns. This increases the turnover ratio of your funds and subsequently raises your capital gains taxes. (It could also put you on the hook for more trading fees.) Passive funds are designed to track performance of a given index, and therefore they require less trading than an active account.
  5. Check into Health Savings Accounts (HSA) ? Assuming that you have a high-deductible health plan (HDHA) and are not enrolled in Medicare, you may contribute funds into an HSA account to pay for qualified medical expenses. The money is invested on a tax-deferred basis and withdrawals for qualified medical expenses are tax-free.
  6. Consider Municipal Bonds ? Municipal bonds have a “triple” tax benefit because they are one of the few investments that are exempt from all three levels of taxation on their earned interest ? federal, state, and local (assuming you are buying local bonds to gain the local exemption). They can maximize tax savings on the lower-risk investment portion of your portfolio.
  7. Make Charitable Stock Donations ? By donating appreciated stock to a qualified charity, you receive multiple tax benefits. You can deduct the full current market value of the stock and avoid paying capital gains taxes, regardless of the amount of appreciation.

Make sure to make the most of any tax breaks the government offers. It certainly won’t lose any sleep at night when taking your extra tax dollars should miss these opportunities to pay less.

 

 

 

 

 

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When Your Perfect Marriage Becomes A Shambles…

?…and your financial stability is built on a fault line.

Does anyone remember the earthquake that shook the East Coast from Georgia to Massachusetts in 2011?? The one where the epicenter was in Virginia?? Everyone was shocked, except those who knew that Virginia (and the East Coast in general) is on a major fault line.? Apparently, so was my marriage, and, incidentally, my finances.

You go from being happily married, thinking you are financially stable, planning on buying an amazing house with your husband, to living in your sister?s guest room, having fled your home and friends because your husband has fallen out of love with you.

On top of it all, the stress of trying to save a marriage that you didn?t know was already in ashes nearly killed you.

So now what?? You have to deal with the emotional trauma of what you thought was an amazing marriage falling apart. You have zero retirement options.? Why?? As someone in academics, you have never had a full-time job in your entire life.? And, you?re 40.

Facing the facts

When I arrived at my sister?s house, one of the first things we talked about (and everyone talked with me about), was money.? How am I going to feed, clothe, and shelter myself?? What am I going to do about retirement?? What am I going to do about health insurance?? This was incredibly stressful to me.

There were some days when I just couldn?t take it and would burst into tears (again). Otherwise, I would just say that I wasn’t able talk about this right now, and walk away.

Well, now I am several months away from the initial split. Finances are something that need to be discussed and figured out.? Yes, I will be getting ?maintenance?, which is the same as alimony. But that is only for a few years and I will be taxed on it. That means it’s not as much as it seems.

Then there is the issue of retirement.? I am entitled to half of our assets.? I was thinking, ok good, this will be helpful. He?s had a 401k for a while.? Guess again, honey.? At mediation I found out there was less than $10,000 left in that account.? $10,000.? That’s a good amount for a basic savings account, but that is NOTHING when it comes to being able to retire, like, ever.? How did this happen?? Well, that’s a story for another day.? The point is, I have ZERO retirement set up, because Social Security is also a joke.

Financial security?? What the hell is that?

Now I have to start getting my ducks in a row, not only because he never did, but because I no longer have that joint income.? I will admit that I am afraid and somewhat ashamed to go to a financial planner for help.? Why? The state of my finances is abysmal.

You know how people avoid the dentist because they don?t want the dentist to give them a hard time about not flossing?? This is how I feel about going to the financial planner.

I am going through the worst time in my life, and I really don?t want to hear about how I should have done a better job with money.

Will a decent person/financial planner (I?m hoping that?s not an oxymoron) shame me to my face?? I hope not.? Hopefully, at worst, she will roll her eyes internally, while smiling and comforting me, and telling me that it will be tough, but doable.

I am absolutely terrified that I will be told that I will never be able to retire unless I somehow get a serious job in the near future.? The other unappealing option being that if I do retire, ever, I will be on food stamps and supplementing my ?income? by teaching Tai Chi at the community center indefinitely.? Nothing wrong with teaching Tai Chi.? I do teach it already, but I don’t want to have to do it in order to be able to buy food.

Just like Gloria Gaynor: I will survive

But here?s the reality.? It is the same as the dentist.? The sooner you go, the sooner, yes, you may get bad news, but the sooner you can start planning.? True, it is possible you will have the financial equivalent of getting your gums scraped in that first visit.? However, the earlier you know where you stand, the faster you can start working toward some semblance of financial stability.

So suck it up, Buttercup.? My life blew apart this year, despite doing everything in my power to keep it together.? I may not have any control over the direction my marriage went, but at least I can gain control over my financial future.


This article is part of a series that chronicles the real life journey of Lillian Epps, a woman navigating a recent divorce. The stories are real. The names have been changed.?Photo by?Jonat?n Becerra

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