I have a co-worker that I am quite close to. We share a lot about our personal lives with each other. We often talk about money, and I’ve been able to get a good picture about her finances from various conversations we’ve had.
She is in debt. A few years ago she got a consolidation loan for 20K. She’s paying 9% interest on it. I didn’t want to ask too much about the loan – but for her it seems more of a convenience, only making one payment each month, rather than an interest saver. When I asked if it having the consolidation loan meant having a lower her interest rate, she thought about it a bit and said that for some of her debts (credit cards) it meant a lower interest rate, but for others (car loan I think was at 7%), it meant a higher interest rate.
So I really had to hold myself back with this. Why on earth would you get a consolidation loan to pay MORE interest? Couldn’t she have gotten the consolidation loan on only her credit card debt, and left her car payment as is?
She is also the one that I mentioned in a previous post has made us lose our weekly overtime (~$50/wk). Which I don’t get because she is usually at work at that time anyways.
She also often leaves work early and doesn’t mind if her hours get cut.
She gets child support from her ex-husband. And the way it works in her case is that when she files her income tax each year, that’s when she gets hit with a huge (2K) bill to the government because the child support is seen as an income that she needs to pay taxes on. She figures she pays 35% taxes on the child support. She asked her ex to cut the support down to one-third, and not have it declared. He refused, more to spite her than anything else. Another co-worker suggested to her that maybe you should open up a high-interest account, and each time you receive child support, put 35% of it in that account, and never take it out until its time for you to pay your income tax, at which point you’ll already have all the money.
Again, I really had to stop myself from blurting out how obvious that is.
Don’t get me wrong, I really like my co-worker. I have realized that she really works hard. And is very knowledgeable on a lot of things – just not money. Nor math, for that matter.
Thanks for listening. It felt really good to say these things, as I really try hard to control myself from telling her how un-wise her money decisions are.
I wish I could show her Gail Vaz-Oxlade‘s website, but she doesn’t speak or read English well.
