How a Lost Monkey Can Give Us Financial Hope

I saw this article about a monkey lost at an IKEA furniture store when I was doing my morning news reading the other day.  There were some  videos of the monkey on some of the news channels as well and it was pretty entertaining.  The monkey definitely got my day started with a smile.  But the more I came back to thinking about the monkey, my thought process changed a little bit because of a conversation I had…

Later on that day, I was having a conversation with someone who was very far behind in his day-to-day bills, his credit cards and even his rent.  He said he felt lost.  And, that’s when the vision of that monkey popped back into my head and gave me hope.  The monkey was lost too. And he was able to find his way home, so maybe there was a solution for the guy in front of me!

The tough part was going to be finding it.  In order to lighten the mood a little bit and look for a ray of hope, I mentioned the monkey story to him.  He laughed and said “everyone wants to help a cute monkey in a coat, but not that many people want to help a divorced guy going through a rough patch financially.”

But, that’s exactly why he set up the appointment to talk through his situation and why we were sitting in the same room.  I’m not sure I can capture just how ironically funny we both found his statement, but it definitely set the tone for the rest of the conversation.  I saw his expression change from one of hopelessness to one of “let’s figure this out.”  He had shut down any path toward optimism and only saw doom and gloom until we talked about the silly monkey.  No wonder so many kids find monkeys to be their favorite animal…

So what were we able to find?  We talked that day and had a follow up conversation a week later after he did some “homework.”   For his utility bills that were significantly behind, he called them to discuss any programs they might have to help single dads who fall behind and they were able to offer an assistance program that will help him keep his apartment heated through the winter.  For his cable/Internet, he dropped down to a “limited basic” service for $20/month, got an air card for Internet access for $50/month and signed up for a Skype VOIP phone service for $3/month to replace his land line.  For his credit card debt, he enrolled in a debt management plan and that reduced his interest rates very significantly.  The changes with utilities saved him $250-$300/month going forward and the credit card program saved another $150/month.  These were the relatively easy changes, but it still didn’t help with the past due rent issue.

The good news is that the place he lives in is relatively inexpensive ($800/month) and his landlord is not quick to evict.  While he had a few choices (IRA distribution, loan from family member, 401k loan), the path he chose was the 401(k) loan.  While not usually something that I would encourage, for him it made sense.  If he did the IRA distribution, there would have been a heavy tax to be paid (a 10% penalty on top of ordinary income tax) and that would have taken him further away from his long term retirement goals.  The loan from a family member was an option that he considered, but he was not very fond of mixing family and finances.  In his family, he’s seen that go wrong more than a few times!  If he was going to do a loan, he’d prefer an impartial party who wouldn’t lecture him about how he got into the situation to need a loan…

That’s why he went with the 401(k) loan.  He did a $2,400 loan over 5 years and that resulted in a payment of~ $45/month.  The $2,400 would pay his prior 2 months’ past due rent plus the next month’s rent in advance.  It also bought him some time.

With the changes in his budget (cable, Internet, phone and a commitment to cook at home more and eat out less) his monthly income is slightly higher than his monthly expense level.  It’s not a lot, but at least it’s positive.  The tough part will be if the car needs brakes or tires or if there is an injury or illness.  So, with a portion of the excess income he is setting up an online savings account and doing small direct deposits with each paycheck.  After a year or so, he should have a $1,000 emergency fund.

He left our second meeting feeling like a huge weight had been lifted off of his shoulders and that he had a path forward.  It’s going to be a financial struggle for a while, but eventually the credit card debt will be gone and he will have a few salary increases and perhaps even a promotion.  We laughed about the monkey story and found that we had something in common…monkeys make us smile and we both loved the Curious George books as kids.  I’m not exactly sure why that helped us in this situation, but when things look bleak and perhaps even lost like a little monkey in IKEA, we can all remember to smile and find our way home.

 

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