Monday, December 15, 2008

Prepared for a "rainy day"

Just bumped into the blog and found a post about a woman who hit a rough spot when she lost her $70,000 per year job.

Why is her story noteworthy? Primarily, I think, because of how quickly she ran into trouble.
When she was laid off in February, Patricia Guerrero was making $70,000 a year. Weeks later, with bills piling up and in need of food for her family, this middle-class mother did something she never thought she would do: She went to a food bank.
A few additional facts:
  • Guerrero is estranged from her husband.
  • Altadena is an expensive place to live.
    • Altadena's cost of living is 44.99% higher than the U.S. average.
    • The income per capita is $33,527, which includes all adults and children. The median household income is $70,673.
  • She has had to take extreme measures to pay for her interest-only mortgage of $2,500 a month.
  • She used her tax refund to help pay many of her bills for the first two months, but now that money is gone.
The author of the post comments (among many other insightful points):
People need to learn to spend less than they earn. Doing this gives an even bigger cushion when financial trouble hits. Seems like this lady was spending exactly what she earned (maybe more -- we don't know what her credit cards look like.)
A reader, then, comments:
This is a good example of the fact that everyone must expect the "unexpected." If we all took the advice of our Grandmother and saved for a rainy day, we would be better prepared for these events. King Solomon said "only a fool consumes all he has."
???!!! Where is that verse? Check out Proverbs 21:20:
In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.
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