Tuesday, December 21, 2010

Good Financial Advice Is Sometimes Useless

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I was reading over at Bankrate.com and came across an article called "5 steps when you’re 60 and broke". It was your normal 5 steps to do something blog post. It started with a quick story of a 63 year old man out of work for 2 years. Unemployment benefits are running out soon. There are no job prospects in sight. He asks what to do.

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The author proceeds to list 5 things to do. His advice is as follows:

1.Find a job. Fast food, customer service, substitute teaching and cleaning are all jobs that are available in most parts of the country, even when times are tough. They don't pay much more than minimum wage, but sometimes you gotta do what you gotta do just to pay the bills.

2.Cut your housing costs. Between 2005 and 2009, more than 3.8 million people moved in with their relatives, according to the U.S. Census. Moving in with somebody else or renting out a room to split the costs is a time-honored strategy when times are tough.

3.Reduce the cost of owning a car. Defaulting is a bad idea because even if you turn the car back voluntarily, your lender will want you to pay the difference between what the lender was able to sell the vehicle for at auction and what you owed. Try putting the vehicle up for sale yourself. Even if you have to make up the difference, you'll pay less. Replace those wheels with a used car that you pay cash for. Getting rid of that car note will help you cut your  auto insurance costs -- on an old car on which you don't owe money, you can carry cheap liability insurance only.

4.Don't be too proud to apply for whatever help you can get. One good place to start is the government's Supplemental Nutrition Assistance Program, or SNAP, which used to be known as food stamps. This program will help you with the essentials.

5.Keep your health insurance. Under health care reform, there should already be a high-risk health insurance plan available to you -- even if you have a pre-existing condition. Find a knowledgeable insurance agent and ask for help locating an appropriate policy. You'll probably have to accept a plan with a high deductible, but  that's better than having no insurance at all.

I read the ideas and thought the author did a good job with what he had to work with. The unemployed man basically has no prospects and would probably end up on the street if a good job doesn't turn up. It's pretty hopeless for this guy. But thats not the end of the story.

I continued to read further down to the comments. There were four comments just ripping the author apart. The comments were a cross section of people in desperate situations. The sentiment of the commentors was, the advice was frivolous and useless. They saw that the author only could offer advice they already had done. Like looking for work, cutting expenses, get city assistance, and keep you health care. They were infuriated with the last one especially. The stated how would I keep my  health care when I have no income? They said that the only help beyond unemployment, was food stamps. 

In the personal finance blogger world a lot of advice is thrown around. I lump myself in with this bunch. There are many "5 Steps to do  this" or " 10 Steps To Do That" out there. We have to remember that there are real people out there with real personal and financial problems. We give our advice out in a vacuum not knowing its effects. There is a responsibility that must be kept in mind when we write. We owe our readers a personal interest with our words.


  1. Perhaps I am missing something, but why couldn't the 63 year old man start collecting social security? That would provide him with income.

  2. The article states that he would lose benefits if took social security.

  3. I thought unemployment benefits were just extended again. I'd do anything to make a little income, especially if it was under the table, like handyman work.

  4. You make a good argument! Cliched advice won't pay the poor man's bills!

    You hit the nail - "We owe our readers a personal interest with our words."

    Great post!


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