I was motivated to blog after reading about a study out of the University of California, Davis that claims that overspending is what leads people into personal bankruptcy. Over-spending. Should we congratulate them for mastering the obvious? Don’t get me wrong, I know that people spend more than they can handle (this might actually come as a tremendous surprise to the folks at UC…but many businesses, and governments, such as the federal government of the United States, do the same thing). But the conclusion of this study is far from fair.
Yes, you can “overspend” at the grocery store. Or, you could simply accept the fact that white bread, corn flakes and string cheese are a mainstay on the household diet. That will work so long as you put money aside for delightful health conditions that will arise from such a ridiculous diet. And I know….I LOVED string cheese (note my use of the past tense). Eating healthy, or at least trying to, costs more. We can all eat cheaper and die younger. Many rightly choose not to.
Sure, you can go overboard buying clothes, but quite honestly, I have not represented too many people who have looked me in the eye and admitted that the reason why they were in bankruptcy was because of their clothes. I do not have kids – but I am told that kids are constantly outgrowing their clothes, and I have represented many people with growing kids. I imagine mom could make the clothes cheaper. But then again, in many cases, mom works. Or, perhaps they have stronger talents in other areas. I am actually glad that my mom didn’t make clothes. I simply cannot imagine how much I would have been mocked.
I also have not represented anyone who overspent (or to my knowledge even had) plastic surgery. I have not represented any bankruptcy debtors who have had far, far too many chemical peels. On the other hand, I’ve represented folks who didn’t count on the fact that one of their kids might become diabetic. I’ve represented folks who didn’t quite count on the injury they suffered at work, or just the slip down the icy back stairs, or the years of chronic pain that lead to depression, addiction and agony.
I recall a couple that spent much of their adult lives living well, until one of them became ill. Very ill. It can be a difficult process to accept that more money must be spent on medicine, doctors, specialists, equipment, visiting nurses, home health aides, housekeepers…who can help with caring from the chronically ill. Plus, it was the primary breadwinner that became ill.
And to be blunt, I cannot imagine what it will be like for me. I know that sounds fatalistic. But if I have learned anything from my clients or my family it is that either I will have to deal with a long term illness myself, or I will have to deal with the illness of a loved one. I imagine that for some, it might take a long time to adjust. I don’t know how I would – or will – handle it.
There’s also this nagging thought I have is that despite the proclamations from certain “Washington-Folk” that the economy is just getting better, income has not risen at the same rate as food and fuel. Of course, if you take food and fuel out of the inflation calculations, then perhaps it’s ok for those “Washington-Folk” to assure the populace that everything is a-okay. And….if people are in debt, it isn’t health problems, it must be because they are overspending.
Riiiight.
There are people who overspend. There are also people who make regrettable financial decisions (myself included). Most of these people are not evil; they are simply human. The bankruptcy process – much like a church confessional – offers a chance at redemption. It’s not a reason to mock those who have not sinned. Yet.
There are also far more people who find themselves in circumstances they did not control. They or their family members got sick. Maybe it’s cancer, a heart attack, or something more progressive and prolonged, like ALS or Parkinson’s. They or their family members lost their job, or got injured at the job. The bread-winner of the family died. No, I don’t have numbers or cold statistics. I have only my own experiences with my clients. And I think it’s profoundly unfair to slap on them the politically sexy label of “overspenders.” Personally, I’d rather discuss why health care is so expensive and why the food we need to eat to keep us healthy and happy is so expensive, and why the food that makes us sick is cheap. I’d like to hear about studies explaining why the “values” of real estate rose at a far higher rate than incomes, while our political “leaders” proclaimed that the economy was doing just great. I’d like to hear some honest discussion of how and why people find themselves in my office.
I thought about making a comprehensive list of those things that push people into bankruptcy. I really had a tough time trying to list them all out. On one side of the spectrum, we have gross over-spending and financial shenanigans. On the other side, we have the “shit happens” debtors, where sickness, job loss and those who have or are going through life’s unexpected events can bite any one of us in the fanny. The rest of fall somewhere in the middle.
My point? Say what you want about over spending and financial shenanigans, most of us (including yours truly) are one health crisis or other life-changing event away from financial chaos. There really is only so much planning you can do. “Overspending” has nothing to do with it. It’s called life. And it’s what we didn’t plan for that leads many into the bankruptcy arena. And yes, I really think it is that simple.
Related posts:
- When Parents are in Debt
- Talking to the Kids: Dealing with Failure
- Kids Aren’t Stupid (Really)
- Those People
- Storm Preparation: Talk to Your Kids
Tags: Bankruptcy
