Financial Advice

"You will always have bills and you should try to make it as simple for yourself as possible. You never know what to expect, so you should plan for the unexpected. Some people just can not manage money; for example our local bankruptcy went up approximately 23% in the last year and our [nation] has an outstanding debt that seems to never end -- when people win millions of dollars playing the lottery and spend so much they go in debt, that is very poor planning. The five good examples below are ways that have worked for people [who] have experienced making a living.

Heather and Shane Johnson were married last August. Shane had a job with the Bureau of Land Management and Heather worked part-time as a hospital file clerk to help pay her expenses as a student at the University of Oregon nearby. The Johnson's, a thrifty pair, were living in an inexpensive apartment so they could [save] money in several bank accounts, including a $50 a month emergency fund. They were surprised when Shane lost his job in November, but they made it through. They used their emergency fund and she took on extra hours.

Jennifer and Chris O'Donnell dated for more than eight years, so they could start their marriage off debt-free. They both agreed it was worth it.

Their advice is to hold one credit card in your own name to maintain an individual credit rating. Get rid of all previous debts. A prenuptial agreement may be needed [if] large amounts of money [are involved]. It is a good idea to get health insurance now while you're healthy, so you can get it and have cheap premiums. It is also a good idea to get insurance [for] the person who will stay with their job the longest.

The Guillet's know all about unexpected bills. They have a 3 1/2 year old son and a set of 'quintuplets.' The medical bill alone was $1.3 million. Lucky for them, their health insurance paid for all of it except the $1,500 deductible. The Guillet's have had a few changes in their lives since the quints arrived. The money they used to pay a weekly house keeper now goes to buy baby food. They sold their Ford Bronco to buy a 12-passenger-van. Electric bills are up slightly and water usage has doubled. Mr. Guillet will keep his $44,000 a year job and Mrs. Guillet won't go back [to work] until the children are in elementary school. They have been lucky for the free gifts that multiple-birth parents receive for their children. One extra good bonus is since all of the children will be in college at the same time at Mr. Guillet's salary they will end up paying only $800 to $1,00 a piece.

Sammy Monistere, 33, is an Industrial Sales Engineer for the oil and gas industry and his annual income is $50,000 to $80,000. His savings goal is retiring to a combination of leisure and self-employment by the year 2000. His strategy is every year he save 20% of his income, including contributions, to his 401(k) tax-deferred retirement plan, which he funds to the maximum his employer allows. He invests the money in a portfolio that is weighted toward stock mutual funds. He also owns three local rental properties and is co-owner of a fourth property that he bought with a friend. His savings to date are $250,000, including equity in rental properties, IRA's, his 401(k) plan and a $20,000 1966 Corvette. His big splurges were the '66 Corvette and a 1980 Ferrari. His advice is to hang on to your old car as long as possible. He held on to his Toyota until he saved $19,000 as a down payment on his Ferrari.

Here is a different idea from the Robbins. David, 29, accounts-receivable manager for Dun and Bradstreet and Alyson, 29, at-home mom. Their annual income is $49,000 plus a bonus. Their savings goal is to keep Alyson home with their two year old son and any future children. Their strategy involves David saving 9% of his income through a company retirement plan. They have invested in three stock mutual funds and a bond fund. But right now they consider their house their major investment. After renovating their first home themselves they made a $23,000 profit after selling it.

Their savings to date consists of $60,000 including; home equity, David's company profit-sharing plan and IRAs. Their big splurge was a Ford Explorer. Their advice is to practice basic sound economy, such as paying off credit card balances each month and buying term life insurance instead of cash-value.

You never know what to expect in life, so you should always be financially prepared. Like Mr. Johnson who lost his job or the Guillet's who had quintuplets. A few wise tips from this paper of other people's experiences are to save as much as possible, get health insurance when you are young, be conservative and invest wisely. We have also seen how bad planning can take you to the bottom or good planning can take you to the top. All that we can do as human beings is plan for the worst and take it all one day at a time."
Melissa Burrow, Salem High School, Salem, Missouri