Last night I went to a new support and encouragement group for women in debt (or recently out of debt who are now trying to improve their money situation).
It was interesting.
Some of the advice was too basic for me (spending record, budget, snowball debt payments -- check), while other stuff was over my head (ANYTHING that has to do with saving for retirement).
I wasn't sure how I would benefit from the group or how I would be a help to the other women. But listening to their stories, I was amazed and impressed, appalled and shocked and confused.
One woman was impeccably dressed with a huge gold watch on a thick gold chain wrapped around her wrist with D&G (I assume Dolce & Gabbana) on the clock face. She told the group that she used $6,000 a month to pay bills, including her debt, leaving her with $4,000 in disposable income a month. But she didn't know where it went. She was living paycheck to paycheck. She was so short in her checking account, that she wondered if she should take out a few THOUSAND from savings to make it to FRIDAY. It was TUESDAY night!
I almost choked on my water.
I don't EARN $4,000 a month after taxes, let alone LOSE $4,000 a month!
I thought, please God, let me get $4,000 a month free and clear just for a little while and I'll max out a Roth IRA (I'll max out two if the law allows it!), save six months worth of living expenses in a liquid, but interest bearing emergency fund, and save 20% for the down payment on a house. Please God, please.
Another woman has $100,000 in student loan debt (yikes!) which worried her deeply, but she also had $12,000 in consumer debt, but she wasn't worried about that. "That's nothing to me," she said.
Um, what? No, it's not $100 G, but it's scary to me how so many people in this country think that $10,000+ in consumer debt is normal and not a big deal. It isn't until you try to pay it off and see that you can't do it in two paychecks (unless you're like the first woman who makes $10,000 a month AFTER taxes).
But then I had to take a deep breath and take off my judgmental hat. The whole point of this is that people -- no matter how brilliant and obviously successful and well paid they are, like many of these women -- still don't always know the first thing about financial fitness and true wealth.
These women were under 30 and owned their own homes and had multiple degrees. Shoot, I was the starving artist in the group, about to be 31 and not close to owning a home or making that kind of bank. But they were lawyers, information technology managers, aspiring doctors and professional students and they didn't know what exactly "discretionary spending" meant.
It was amazing.
I thanked them for their laudatory attitude when I explained that I just paid off my debt, including the car. I appreciated it. But I also thought that maybe we can all help each other get educated. Because, it seems, with all the money we spent on school, all that we invested so that we could make the big bucks, we were seriously lacking financial education.
Isn't it ironic? Dontcha think?