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Maxed Out 2008-07-30 08:00:26

Maxed Out: Like Mother's Poor Money Habits, Like Daughter

This episode of Maxed Out is about Karen and Caitlin, a mother and daughter pair who are struggling to save for Caitlin's college education because they're living beyond their means. Karen has no savings and too much debt (about $20,000 and growing) to help save for college, and Caitlin is copying her mom's bad money habits. Caitlin has spent every penny of her income from her Summer part-time job on eating out and wants to start culinary school in just one year.

Karen is worried that Caitlin will go through a life of stress over money like she has and knows that her old habits are quickly becoming Caitlin's new ones. Financial guru Allison Griffiths thinks they need some behavioral modifications; find out what they are when you

.

Initially, Allison suggests that Caitlin work for a year or two before going to college to save up money for tuition. That's not a possibility, because they would lose the $800 in child support they receive each month if Caitlin isn't in school. Karen has a big shopping habit and is careless about paying bills on time, and those two weaknesses put her about $450 in the red each month. Karen justifies shopping by only spending money on deals, and says that she can't spend $100 on anything but will spend $20 five times.

Allison has them drastically cut their expensive cell phone bill, tells Karen to make sure she pays all her bills on time and cut out her frivolous shopping, and instructs them to eat breakfast at home, pack a lunch, and eat dinner at home two or three nights each week. In order to start Caitlin's college fund, Allison has Caitlin deposit half of every paycheck to a separate savings account and asks Karen to contribute all of the child support. With Allison's help, they have cut expenses by $900 a month and will have $10,000 saved by Caitlin's first semester.

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CaterpillarGirl CaterpillarGirl 7 years
Matamoros, you crack me up.
Matamoros Matamoros 7 years
Looks like these two clueless bimbos will have to move into a smaller trailer. The worst comment in this whole sad litany of cluelessness is how she comes to the decision to stay in school. Because she can use that simple fact to suck another $800.00 per month out of her poor father who gets to pay for this nonsense. Nothing to do with perhaps, getting an education mind you. From the looks of Caitlin, she could use a little less 'eating out' and a lot more 'dieting out'. Fat Princess will have a few choices: 1.) Life of financial mismanagement like mom 2.) Find a man to pay for her stupidity (like mom. Better slim down first.) 3.) Learn how to operate a stove and stay out of the mall. 4.) Get a job. Something tells me this is not really being considered.
ChimericGirl ChimericGirl 7 years
And I'm speaking as a 20 something who is faced with the burden of financially supporting my 61 year old mom soon....I haven't even fully launched my own life yet-still applying for grad school plus the 3 years it will take to finish a master's degree in occupational therapy...yikes, I really wished my mom had focused on saving for her retirement.
ChimericGirl ChimericGirl 7 years
I agree that the mom needs to focus on her own retirement. To paraphrase Suze Orman "There are low interest student loans to finance college but there is no such thing to finance retirement" Well, there is social security. However, for a mom who may have stayed home with the kids when they were younger may not have earned enough money over her life to get an even somewhat decent SS payout. (Correct me if I'm wrong but I think SS is based on how much you earn and pay into the system over your life) Even a high SS payout isn't all that much. Therefore, parents should prioritize retirement over paying for kid's college. It's a much bigger burden to have to financially support aging parents than it is to pay off student loans/work part time/apply for scholarships.
GigglyGirl GigglyGirl 7 years
No Way!! $800 in EXTRA money and they still can't make ends meet? I guess it's easy to judge someone else's habits though. But still, girlie needs pay for school herself. Welcome to the world of student loans, I'm 31 and still paying on them.
Brendelwoman Brendelwoman 7 years
True. I don't think paying for college is going to help this girl. And mom does need to save for retirement.
Shopaholichunny Shopaholichunny 7 years
I agree Bella! Caitlin needs to start showing more responsibility for her future and her Mom should start saving for retirement.
bellaressa bellaressa 7 years
I am so afraid for the mother --no savings and she is trying to help her daughter; while that is a great thing to do, I think she need to save for herself. I wonder if she is not saving does she even have a 401k or saving for retirement b/c at this rate her daughter will be taking care of her one, two: dog food will become food of choice, or 3 she will be homeless and wandering. Caitlin ---- needs to pay for college herself. Cul school in most cases are less than 2 years. She needs to get a pt job or work nights. This is so scary.
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