No one is going to argue that purchasing a furnace is a waste of money or something that isn’t a necessity….especially here in Indiana where the temperatures reached negative 40 last winter during the polar vortex. As an attorney assisting people with debt issues, I have noticed that more and more people are financing mechanical things for their homes. Among the one that irritates me the most is the furnace. And it’s not really the financing of the furnace that bothers me, it’s the fact that there is not enough money to pay for the purchase of the furnace that is the real problem. Let me explain.
While drinking my morning cup of coffee watching Good Morning America this morning a story came on about the retirement savings of Americans. The broadcast stated that the average “middle class” family in America has saved $20,000.00 for retirement. This is a vague statement at best and I wouldn’t go so far as to call it a statistic. Nonetheless, the message is clear. Americans are, overall, fairly incompetent when it comes to saving money.
I know that many families fall on very hard times. Illness, divorce ad job loss are major reasons that financial hardship occurs for families. However, there are many, many more families that I would consider to be upper middle-class who could not scrape together $1,000.00 for an emergency. This is a serious problem. Not those who are struggling as a result of outside circumstances, but those who are spending $250.00 per month on a cell phone bill, $220.00 per month on a cable/internet package, and those who pay $1,0000.00 per month or more for the pleasure of driving 2 new vehicles.
I do not know how our American culture has gotten to a place where monthly expenses such as these are not only common, but expected. So many families choose to own 2 fancy cars, which are only going to decrease in value, instead of putting back a few bucks into savings. A middle-class family in the United States should have more than $20,000.00 in an emergency fund and substantially more in retirement. However, we tend to spend money all day every day on McDonalds, Polar Pops and snacks at the gas station and travel sports. These things are all fine if your family has a substantial emergency fund and is saving regularly for retirement. But if you have ever been in a position where you are not sure how you will pay for a car repair or purchase a furnace when yours breaks down (notice I said when….please don’t try to tell me that a furnace repair or breakdown is an unexpected expense) while you have two incomes then it is time to re-evaluate your spending and your income.
It’s time for Americans to wake up and realize that spending less than you earn and putting the difference into savings is mandatory. If you have to cancel cable, avoid eating out at restaurants, cancel your $200.00 per month cell phone plan to get $50.00 per month pre-paid phones, or get a second job…..do it. Spending every penny you make each month is not a way to live. When every car repair or plumbing leak is a significant emotional event or when you find yourself in need of a financing plan for a furnace these events should be a wake-up call. You are not on the right track. You need a plan to change it. It may be cutting expenses, it may be getting another job, it may be filing a bankruptcy so that you can start fresh financially with a different strategy.
While the title of this blog is about a furnace, the “thing” being financed is irrelevant. Americans need to remember that they won’t be able to work forever. They need to remember that living on social security is not fun for an elderly person and that many, many elderly people go to bed hungry. They need to remember that you cannot take out a loan for retirement. They need to realize that there are people who make less money than them who aren’t living paycheck to paycheck. They need to realize that it can be done. It must be done. And, most importantly, they need to realize that they can do it too. Americans can, should, and must, learn how to spend less, save more, and to never finance a furnace.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.