This Halloween you’ll hear plenty of scary stories about ghosts, goblins and witches. But do you know what’s even scarier? Money problems. Yup, this can get your heart racing as fast as the fictional boogeyman.
To help you understand just how frightening financial issues can be, we sought out people with real-life money horror stories. Thankfully, these frightful stories generally have happy endings. Better yet, you can learn from these folks and then avoid these situations yourself. Read on to learn more.
Waking up to an Extra $100,000 of Debt
Imagine finding out your new husband or wife comes with a bit more baggage than you anticipated. This is exactly what happened to Rachel Smith in 2015.
“My husband found out very shortly after we were married that he underestimated the amount of student loans he had – by over $100,000,” says Smith, who blogs at Budgets and Kale
To throw extra monkey wrenches into the equation, Rachel was also just graduating with her own student loan debt. Combined, they both owed $185,000 in student loans. That’s a far cry from the $85,00 they expected to repay.
The final coup de graĉe? Rachel was expecting her first baby. “It all just felt like a huge mess,” she says.
To get themselves out of this financial bind, the couple scrimped and saved, living on less than half their combined income. Then, a short while later, Rachel’s grandmother and father both passed away, leaving them with an unexpected financial gift.
“While I’d do anything to have him back, that is how the remainder (of debt) was paid,” she says. “I used to avoid telling this, but it’s my reality.”
Thankfully, Rachel and her husband are now debt-free, and the experience has brought them even closer.
“Ultimately a question I had to ask myself was: ‘‘If I had known how much debt my husband had, would I have still married him?’ The answer is 100% yes. That mental shift is what helped build back my trust and our relationship.”
Waving Goodbye to Your $2,152 Cruise Vacation
Last summer Deborah Rogers from The Gifted Rat was looking forward to an amazing Royal Caribbean cruise vacation to Cuba with her family. She thought she had everything in order, right down to the travel documents that everyone needed.
Rodgers flew to Miami with her family and showed up at the dock with visions of sipping mimosas on poolside decks in her head. Instead, she was in for the shock of a lifetime: She hadn’t received an important notice from Royal Caribbean saying that her children also needed passports for the journey. She didn’t have these passports and this meant her family could not go on their much anticipated cruise.
“We cried while we watched the ship sail away,” Rogers says.
Instead, the family spent their time at a beachside resort in Miami. “Our family joke is one vacation for the price of two!”
Rodgers is still fighting to get her money back from the cruise line. As for next time, she says she will not rely solely on the cruise company’s customer service department. Instead, she will book future travel through a travel agent who can offer personal service.
House Poor and One Step Away From Disaster
You have probably heard that owning a home is the American Dream.
Yet, buying a house is a major decision that can affect your finances for years to come. Take the case of Lisa, also known as Mrs. Mad Money Monster. The financial blogger bought her current home in 2010.
“When I walked away from the settlement table, I only had $200 remaining in my bank account,” she says.
“I was afraid to turn the heat on in the winter or the A/C on in the summer. Even though I was able to purchase the home and move in, I couldn’t really enjoy it because I was living in a constant state of fear over not having enough money to cover all the bills.”
Over time she started making wiser money decisions and earning more money at her job. Yet she wasn’t able to saving significant amounts of money until 2015.
If “Mrs. Mad Money Monster” could go back in time, she would tell herself to “delay the home purchase until I had a 20% down payment and an additional three to six months worth of living expenses set aside to lessen the financial blow and maintain my peace of mind.”
This is sound advice.
Losing Your Eyesight After a Full-Time Leap Into Freelancing
Picture waking up one day and not being able to see. Now, picture that same scenario, but imagine it happening right after you’ve cut ties with your day job.
That’s what happened to freelance writer Jackie Lam a few months after she started working for herself full-time. Suddenly, she found herself with an eye injury that needed medical attention, stat.
“I ended up going to the ER twice. One was by accident. I am ashamed to say I thought I was going to urgent care, but it was the ER,” Lam says. “That, along with several follow-up appointments with eye specialists, medication – on a health care plan with high premiums – was pretty terrible. I think it cost about $2,300.”
Another byproduct of her eye injury was that she had to take four weeks off work, right after she took a scary leap as a full-time freelancer. Thankfully, Lam had a robust emergency fund to carry her through her financially-challenging times.
The moral of the story? “Save, save, save for an emergency, especially if you’re a freelancer,” says Lam. “You never know when you (and your eyeballs) will need it.”
Real Estate Flip Gone Wrong
Tyler Weinrich has a dream: to help people out while running a profitable real estate business. This is why he purchased a home from a nice couple in 2017.
“Instead of focusing on the objective numbers, I looked at buying the home and helping some great people move onto the next chapter in their life. I may have been too lenient in my calculations.”
What followed was a nightmare saga that any real estate flipper dreads. Weinrich bought the home for $140,000, paid $25,000 to remodel it, and expected to sell it for $220,000. Things were looking bright as he listed it on the market, but that’s exactly when the problems started piling up.
First, it was a broken HVAC line that cost $1,000 to repair. Then, it sat on the market for months with nary any interest, forcing him to lower the price by $25,000. When he finally did get an offer, an inspection revealed another $1,500 worth of repairs. The appraisal came back and valued the house at $13,000 less than the selling price. Then, he found out that the potential buyer needed help with the closing costs — lots of help.
When the dust finally settled, Weinrich ended up paying $10,500 out of his own pocket to sell the house.
“I still flip houses and have made money on almost all of the other ones I’ve bought,” says Weinrich. “But this just goes to show that you can easily lose money in this business. It isn’t as glamorous and easy as the HGTV shows make it out to be.”
Do you have goosebumps yet? Do any of these stories sound familiar to you? Or, maybe you have your own money horror story that’s even more cringe-worthy than these.
In each case here, there’s a common thread: Sometimes scary financial events happen. But just like each of these people have learned, there’s a good way to prepare yourself: Know what you’re signing up for and keep your eye on your long-term money goals. And, most of all, save your money so you are prepared for emergencies and unexpected expenses.
Once you’ve got those things covered, your financial life will be a little less scary.