Many folks who are in debt are also suffering stress and therefore may feel somewhat paralyzed about seeking help from a financial planner. If you are unable to make progress on your own, consulting with a financial planner may help you immeasurably to get past your debts, stabilize your financial situation, and move on to planning your financial future.
A financial planner is trained to look at all aspects of your financial life, even those that may currently be out of reach. In this case, you can see that this couple was living close to the edge before they had a medical emergency and that one event tipped the balance of their finances to a negative net worth.
Many, many Americans are living paycheck to paycheck and what this case illuminates is how fragile our finances can be. As financial planners, we know what the pieces of a solid financial life should look like and the numbers it can take to fund a stress-free future which is not the same at all as being wealthy. When we talk about "money maturity" to an individual, that isn't a sarcastic remark reflecting a deficit in the person it's attached to — it is a reflection of the state of mind that recognizes and accepts responsibility for the way you use your resources.
In someone with that state of mind, they understand that too much debt puts them at risk of a financial meltdown if any of the common, yet unfortunate events happens to them (for example, a car accident, a health problem, the loss of a job) and so they put their resources to work in the direction of their dreams. They avoid unnecessary debt, they spend below what they earn, they maintain a rainy day/bad luck/emergency fund and they appreciate that this protects them when 'life happens'.
After they get through those steps, they know they must save diligently over many years to have enough in the pot to draw from when they stop working. And today, they also know they should save separately for health care costs when they stop working. Investment returns can rarely overcome a lack of savings. The couple in our makeover are good people who are trying to help themselves. They are taking responsibility for their debts and getting through their bad luck with humility and perseverance. If they stick to the plan, they will succeed in becoming financially stable and they are young enough to make significant headway on saving for their future at that time. All Americans should be encouraged to organize their debts and pay them off so they can get to the future with less worry.
