Friday, January 18, 2008
Guest Nicole is 33 and from Louisville, Kentucky. Working as a chemical engineer, she brings in $80,000 a year, but is still struggling financially because she and her mother, Cynthia, constantly supplement her sister with money. Nicole's sister Kelly has 3 children and depends on her family to help her out of money situations she has put herself in. Whether it's renting a house from her sister and not paying the rent on time, asking for money to pay for utilities before they are turned off, needing them to pay her car payment or wasting their money to buy a big screen TV and treadmill, Kelly needs help to stop.
Suze Orman sits down with the family to have an honest conversation about their family situation. Suze tells Nicole and Cynthia that they are saying yes to Kelly out of fear instead of saying no to her out of love. Because of the way they give Kelly money, Nicole and Cynthia have no emergency funds of their own and are damaging their financial future. Suze has the family sign a contract stating that money will no longer be handed to Kelly out of love. Suze explained that money will not fix problems and the family was taking the easy way instead of the right way by enabling Kelly to continue being irresponsible.
Suze sees money as a symbol of what is going wrong in a person's life - "self worth equals net worth" and that financial chaos "is a sign of your life being chaotic." The fact that Kelly's house was a disaster showed that if you can't respect what money can buy, you can't respect money period. Suze went on to say that Kelly was lying to her family by saying she would to pay them back and not following through with it - making her word mean nothing. At the end of the segment Nicole let Kelly know she was selling both of their homes and moving, leaving Kelly to manage on her own, but Kelly said, "I'm gonna make it."
David and Greer are struggling because they are living beyond their means -- with a new home, 2 new cars and 2 small children, their life looks perfect from the outside, but they are at risk for divorce. The couple brings in $6600 a month with both of them working full-time, but they still can't pay their bills. With daycare costing $1800 a month and paying down student loan debt, the impulse buys have put the family in a desperate situation.
Suze recommended that David and Greer sell everything - cars, home, furniture, whatever it takes. They then need to move into an apartment, buy a used car and get themselves back on track - pay off their debt and build up an emergency fund - even if it means getting a second job. Oprah and Suze pointed out to the couple that they didn't notice signs that were being given to them that they needed to stop spending the way they were. After buying the new house and new cars in the same day, they didn't see the situation they were putting themselves in and soon after David lost his job - the couple needed to "get it".
Looking back, Felice was the mother of 6 children who spend hundreds a day on clothing, nails, hair extensions and Starbucks to the point the family was close to having to file for bankruptcy - and the children didn't even have health insurance. Three months later, Felice and Phil came back to update Oprah and viewers on how they are improving their situation. Felice was happy to share that she and Phil had made major changes.
Felice revealed the couple had bought life insurance as well as dental and health insurance for all 6 of their children - the kids have also had a visit to the dentist. The couple put their house on the market and sold 1 of their 3 cars. Consolidating their debt and creating a will and trust are more changes that have put the family on the right track to recovery. Felice was happy to state that she now makes her own coffee during the week and she created a resume and plans to apply at Starbucks. Suze stated that the family still visits Starbucks, but only after collecting cans to pay for the trip.
"Everybody can save themselves if they're ready to change."
"It is a secret American's hold to live beyond their means."
"You're not living your best life if you're living beyond your means.
