Proper Prior Planning Prevents Piss Poor Performance

I can’t take credit for this old adage, but it is one that is so very true. I just got off the phone with a client who has a house in foreclosure, is getting a divorce, is on disability and whom the bank told has to be out of her house by the 30th of the month.

This woman has no money to fight to stay in her home and no plan to maintain payments on the house even if we were to save it. This is a woman who did not properly plan.

I wish I could say this was an isolated event, but it’s not. I get call after call from people who want help but have absolutely no way to pay for it.  The reason they are unable to pay for the help they need is because they never prepared for the situation they find themselves in.

The lack of a rainy day fund, savings, life and/or health insurance is killing the middle and working class. That coupled with the belief that everything can be accomplished through a "hook up," which breeds an inherent mistrust of people who charge full price for their services, are doing damage to our communities.

A report released in August by the National Foundation for Credit Counseling backs these numbers up. According to their report, 64 percent of Americans wouldn’t have even $1,000 to pay for an unexpected emergency.

When asked what they would do if an emergency happened that required $1,000 or more, 17 percent of those surveyed said they would borrow money from friends or family. Another 17 percent said they would neglect other financial obligations -- like a credit card bill or mortgage payment -- in order to free up some funds.

Another 12 percent said they would have to sell or pawn some assets to come up with $1,000 and 9 percent said they would need to take out a loan. Another 9 percent said they would get a cash advance from a credit card.

Real Estate Mike is host of the syndicated radio show, “Let’s Talk Real Estate with Mike Andrews.” He is a published author, real estate expert, entrepreneur and investment advisor. Follow him on Twitter Twitter.com/RealEstateMikeA.