Financial Planning and Learning to Drive
October 14, 2011My daughter just got her learner’s permit. Drivers everywhere, beware! Last Sunday I let her drive as we ran errands, and she did a remarkably good job for her first time on busy roads. It wasn’t an empty parking lot this time! And…that’s not just a proud dad talking. It’s an honest evaluation of her performance. This whole “learning to drive” experience has me thinking about our capacity to learn new things.
After going driving with my daughter, the first person I talked to in a work setting was a woman who is 30 something years old. She is very smart, has a great job, and is a very competent person. She is facing the challenge of learning something new, just like my daughter. She grew up in a household where her parents took care of everything. If she needed cash, she asked mom or dad, and they asked “how much?” and gave her pretty much what she asked for. In college, she met a guy who was a business major (she was an English major), fell in love, married him as soon as they graduated and he took care of the household finances from Day 1. Then, her life changed. He was involved in a motorcycle accident and died, leaving her with a broken heart and no idea how to manage day to day finances.
She tried to do her best, but ended up with lots of credit card debt, unpaid bills, calls from collections companies and more stress than she bargained for. Obviously, a big part of her current financial distress is brought on by grief, and her decision making in the aftermath of her husband’s death was probably not at its’ peak. But, she never had to learn basic, fundamental day-to-day financial management. The situation was thrust upon her by events that she was not prepared to handle. But, who is ever prepared for that kind of tragedy? The good news is that she got to the point where she realized she was not going to be able to fix it herself so she asked for help.
So, how did her story end? Well, it isn’t exactly ending, it’s evolving. When I met with her we talked about the basics and we’re going to continue to talk and she’s going to commit to becoming financially savvy. The first thing we talked about was “How To Reconcile Your Bank Statement”. She had no idea how much money she had in the bank. We then put together a list of everything she owns vs. everything she owes to get a handle on her current state. It turns out that her husband had life insurance and the check had been deposited into his checking account, but he got all of his statements online and she didn’t look at them so she didn’t know the money was there. The credit card bills were also online statements so a few months went by without payment and she began to get calls from collections departments. The hardest part of her situation was constructing the “Where Am I Now?” picture. While she was gathering all of the information for that, she also looked at her spending habits and was able to put together a tentative list of monthly incomes and expenses.
Fortunately, she was able to log in to her husband’s email account and retrieve everything. He had actually put together a family budget several months prior to his death. And, there was enough money to get out of the immediate crisis. But, if she didn’t get her arms around the situation nearly immediately, things could have gotten ugly. She was able to smile through it all and she is the one who made the connection that what she has to do is learn a new skill.
She has learned to do all kinds of things in her life. In fact she learned to, as an English major, build complex spreadsheets for her job. Her parting comment to me was, “Well, if could learn how to drive, I can learn how to manage my money!” Speaking of that, does anyone have any wisdom to impart to me about teaching a teenager how to drive?