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Ask Dave

Is Your Money Tight Each Month? This Is Your Wake-Up Call!

Jen and her husband have been getting by, but now things have changed. Her mother-in-law has moved in with them due to health issues, and now things are really tight. Dave says this is their financial wake-up call.

QUESTION: Jen and her husband are both 50, and they make about $50,000 a year. They have a little bit of debt, and recently her mother-in-law moved in with them due to health issues. Jen says they’re struggling with the additional expenses and asks Dave what they should do.

ANSWER: Anytime things get tight and something like that happens, it’s your wake-up call. It’s the phone ringing, so I’m going to tell you to pick up the phone. It’s telling you that you’ve been kind of sloppy, you’ve been kind of disorganized, but you’ve made enough money to get away with it.

Her moving in tightened things up, and it shone a spotlight on the fact that you’re going to have to start doing a written plan and you’re going to have to start behaving and cut back on some stuff, because you’ve chosen to take care of her. This is an honorable choice and a wonderful thing you’re doing, by the way. But you don’t have a choice now. With this added responsibility you’ve taken on — and many Americans are facing the same thing — we live with a lot of people in the Sandwich Generation. They’re sandwiched between taking care of their parents and taking care of their grown kids. They get caught in the middle and get the squeezola. Well, you are experiencing one edge of the squeezola here. The way you handle it is with a written budget.

The good news is that with a detailed plan, you can analyze whether you need extra income or whether you’ve got to cut some expenses — what you’ve got to do to create a little margin to be able to have a clear picture of your future. But if you just wander along without a plan, you’re going to make a mess out of this. It’s going to get bad fast. So you’re either growing or you’re dying, kiddo. It’s time to grow.




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