Welcome to the latest installment of Money Advice For the Rest Of Us
I’m still reading, but this line: “ Money is the last taboo, and we feel ashamed if we “don’t have enough” and we feel ashamed if we have “too much,” all the while not having anything real to compare ourselves to.” STRONGLY reminds me of the thin/fat line that women are supposed to walk, or the prude/slut line with clothing that women wear, or any number of arbitrary lines that just exist in society. For some reason. Over and over again.
I would love it if someone with this attitude could talk about bankruptcy and recovering from it. I filed for chapter 7 in September and it’s been one of the shittiest experiences of my life, emotionally and financially obviously but also mentally. I was fortunate enough to have a lawyer, but even so I spent countless hours falling down research rabbit holes about the exact definition of “insiders” or whether a plane ticket my mom bought me last winter that I paid her back for would count as an insider payment (answer: no). I had the textbook definition of a boring “no-asset” case but spent the entire time convinced I would go to jail for failing to report the exact worth of my book collection.
Now that the creditors meeting has been successfully completed I’m starting to relax a bit, but the next question is what to do after. I have a steady, adequate income so that’s obviously a huge advantage. But a lot of the advice I have read includes getting a credit card to rebuild my credit, and I frankly don’t feel that I can be trusted with one. I’m in this situation partly because I have bipolar disorder, and at both ends of the pole I have spent a lot of money that I didn’t have. (Also, bipolar can be expensive to treat. Health care is expensive.) What can I do to improve my financial health that doesn’t include credit cards? And how do I psychologically thread the needle between “bankruptcy is sometimes necessary and good for people” and “mine was preventable and I am deeply ashamed”? How do I feel less shame? That last one might be for my therapist.
“One thing I would consider doing is taking the estate planning a step further and look into getting a trust set up and having your condo owned by the trust.”
I’ve been an estate planning attorney for over a decade in Washington and I cannot tell you how misguided this is as blanket advice for the general public. I’m am begging BEGGING financial advisors to stop preaching it as gospel.
There are valid reasons to use a trust (frequently called a “living” or “revocable” trust) as the basis for your estate plan - example: you live in CA or another state where probate is very expensive - but the reasons cited here are not them.
You should do your estate planning. You should hire an attorney to help you (#sorrynotsorry) because you don’t know what you don’t know and online DIY Wills can lead to terrible outcomes. You may or may not need a revocable trust. Ask your *attorney* that question when you meet with them.
I strongly encourage everyone to have a will and think about your advance care planning wishes, and the best time to do those is when you're healthy and it's all theoretical discussions. My partner and I did ours when we first got married; when I was diagnosed with cancer a few years later I was very happy it was already done because it would have been way too hard to do it then. Thankfully, I'm okay at the moment. My sister died last year without a will and even though she really had no assets, it was a ton of paperwork and phone calls, and trying to find bank account information, and overall confusion to deal with everything, on top of grief. It took more than 9 months to wrap up.
finally catching up on some backlogged reading and this entry really resonates with me. So much financial advice is hyper-individualized and targeted at hyper-capitalistic lifestyles (FIRE/Credit Card Points Maximizing/Crypto/How To Be A Rentseeking Land Barron/etc). I've always tried to see money and financial resources as a tool that I can use to fight back against the various systems (even, and maybe especially, the financial systems) that cause so many of the problems that affect and exploit our communities. I'm not at all qualified but I've long wished someone would give classes on "financial literacy for anticapitalists."
This connects for me in ways to Howard Waitzkin's Rinky-Dink Revolution: Moving Beyond Capitalism by Withholding Consent, Creative Constructions, and Creative Destructions
I'm glad to see that I'm not alone in thinking in these directions.