My friend’s mother is probably rolling over in her grave. “Mom” was a very frugal lady. She didn’t buy a vehicle unless she had cash, she invested in real estate and she counted her pennies. Everyone was surprised to find out how much money she had when she passed away three years ago. My friend (let’s call her) Nancy was shocked when she discovered Mom had left instructions in her will for a home to be purchased for her. Free and clear.
Nancy and I lived in the same mobile home park six years ago – back when I was poor, on welfare and paying off my credit card debt. Actually we were both very poor. She has a permanent disability and at the time had not learned the skills necessary to venture out into the world on her own. Her husband had taken care of all her needs and taken her everywhere and passed away when he was fifty. Then her mother had settled into the position of helping her. About the time we met, she had pretty much been homebound for four years, but had finally gotten so sick and tired of her mother micromanaging her life that she had sought training to learn to venture out on her own and was finally starting to become independent.
We spent time together every single day; Nancy grew more and more independent and I was hired at my current job. We started growing apart a little, and after a year of working I moved out to the country. When her mother passed away she also was able to move from the mobile home park because her stepfather bought her a brand new condominium. She only had to be responsible for the yearly insurance and taxes.
Nancy and I lost touch for a couple of years, but then we settled into a twice yearly “date” around our birthdays. Mine is in May, hers is in October. So it works out pretty good.
She asked me if we stop by her finance office and sign the paperwork on her new loan. Of course I didn’t have a problem with that. Little did I know the appointment would turn into blogfodder.
A couple of years after I moved away, Nancy’s mother passed away. Nancy’s stepfather informed her that he was going to buy her a condo and put it in her name, as stated in her mother’s will. Nancy receives disability and also works part time. She makes a halfway decent living, considering she owns her home free and clear.
Well, now she doesn’t own her home free and clear, because the papers she was signing yesterday were for a 15 year mortgage.
Apparently about a year ago she found this finance office which helped her get a personal loan to pay off her credit cards. She laughed as she told me her daughter told her the trick was to keep from charging up the credit cards again. Apparently she wasn’t successful as she had seven cards with balances on them.
About two months ago, she decided she wanted a new bathtub installed. She has arthritis and it is hard for her to get in and out of the tub, so she wanted one of those tubs that has a little door that you open and get in and then sit down and it has bubblers in the seat. It’s just like a jacuzzi, she said. And it works wonders on her arthritic knees. This little beauty cost nearly $17,000.
She says her finance officer called last week to tell her that they could help her out with a loan to combine her credit card debt and get her a lower rate overall. My friend told the lady she’d been meaning to call her, because she needed to get her new bathtub refinanced because the interest fee was 28%!!
So now my friend has a 15 year fixed mortgage on her previously free and clear home. She is paying 11% interest. Her finance officer called her back with the good news: “We can pay for your bathtub, pay off all your credit cards AND give you an extra five thousand dollars to spend however you like!”
Nancy responded, “Well, I don’t need the five thousand dollars” and the lady answered, “Oh, that’s part of the package!”
I was thinking to myself how I could best use that $5000? Like maybe pay down that mortgage by $5000 right away?
So now my friend was telling me all the things she is planning to do now that her credit cards are down to zero again. She needs a security screen door installed (Home Depot card) and there is a high dollar item she’s been wanting for years that costs right around $5000.
I didn’t say anything. Who am I to say anything? She is an adult, and capable of making her own decisions. She has enough money coming in to pay for her new mortgage, which is costing her just under $500 a month. She says that is less than the bathtub payment and her credit cards combined.
To top it all off, she charged our dinner to a credit card. I think I need to send Nancy to this Guide for Getting Out of Credit Card Debt.
I guess I just have to be thankful that I don’t view credit in the same way. She was not stressed out at all about this new debt. She actually seemed really excited about it. Especially since her credit score is so high. I read on a blog recently about high credit scores being a sign you have plenty of debt – and that Dave Ramsey’s FICO score is 0.