I received an email from a colleague of mine who was laid off two months ago. It was a tale of woes. X is a 62 year old white handicapped female. She has been unable to find full time work in our industry and is waiting to start a part time job working eight hours a week. Since she is handicapped she wants a position that will enable her to work from home. Most potential employers are seeking a person who can call on customers and not a back office person. X had $10,000 in her 401k but has spent the money on attorney fees to clear up an issue with her husband who is confined to a mental institution. X has no other savings but is collecting unemployment. She has filed for a company pension and social security disability but it will be several weeks before payments will arrive. X has no money. She is a diabetic and has a six-month supply of insulin. She’s afraid she will not have money for the drug co-pay when she needs insulin. Since she has refinanced her home numerous times there is no equity left and probably owes more on the house than it is worth. On her most recent refinance an escrow account was not set up and she is now in arrears on her taxes. The local tax authority is sending collection letters. She has also missed this month’s house payment. To make matters worse X has been subsidizing her daughter and son in law’s household to the tune of $1,500 per month. X had been buying food, paying for cell phones, paying the electric bill and her son in laws $650 truck payment. Now that the subsidy has stopped the cell phones have been turned off for non-payment, the electric will soon be shut off and the truck is being repossessed. Knowing her position with the company I would guess that X was making $90,000 to $110,000 a year plus bonus before she was laid off.
I have mixed feelings about this situation. I fell sorry for her current financial situation and the mess that her life has become. I know it is difficult to find another position at her previous salary without a college education. I know she faces an additional challenge because she uses a motorized cart and wheel chair. However, how does a 62-year-old person only have $10,000 saved when they have been making good money for years? I’ve had many conversations with X over the years and she has always lived check to check. When bonuses were paid she would spend the money in a week. She took lavish vacations with her daughter, son in law and two grandchildren. X enabled her daughter to live beyond her means by subsidizing her household and now that house of cards if falling too. The company has been laying off people since inception when it was burdened with over a billion dollars in debt. Countless peers have been booted out the door before X so why didn’t she prepare herself financially? Why didn’t X take this as a sign to save some money and force her daughter to live within their means? Her mentally disabled husband’s mother left a trust that takes care of his expenses so X can’t blame him (the trust will not support X). How is it that X never learned fiscal responsibility? Was she chasing the American dream or just trying to keep up with the Joneses?
The Corporate Slave 
Or maybe just trying to keep up, period! My family and I are living proof that it can all go horribly wrong with absolutely no warning. Thankfully our situation hasn’t been as dire as X’s is but I could easily see it happening to us at this point in our lives. Ron has been looking for work for two years now…there’s just nothing out there. I have a college degree but still work at a job that requires a lot of skill but pays Crap. There’s always a corporate excuse why they can’t give you more…never mind they cut our hours yet still expect all the work to get finished and then some. I’ve had my 401k for years and it still sucks thanks to the stock market crash of 1999/2000 followed soon after by 9/11…that alone took me almost 4 years to recoup what I lost! I won’t even mention the skyrocketing costs of just getting by with the basic essentials! Yes, I completely understand how X is where she is…lavish vacations or not.
I bet you are fiscally responsible and do a good job of managing your money. You would not be able to support your family on one income if you squandered your money. X has never learned to manage money and always sought immediate satisfaction without regard for the future.