Okay as most know, MP Dunleavy seems to always piss me when she writes about her finances. She always does STUPID. But the most recent article in the NY times is called “Paying off debts that seem Unshakeable.” So what’s the problem? Well here is a thread on her Women In Red discussing her decision and justifying it.
First of all, from the article, she’s crazy! Life always happens and justifying cutting her retirement savings to pay off debt is stupid. She obviously hasn’t been very serious about it, so don’t cut savings. She’s spent 5 years paying off $20k of debt, without being diehard serious. She SHOULD be cutting her lifestyle. Her justifications are the EXACT reason why I think people who follow Dave Ramsey’s plan should not cut retirement savings. It’s TOO easy to justify paying off debt by cutting savings and not changing your lifestyle.
Here’s MP’s Justification -
Is peace of mind worth that much? At this point, for me, you bet it is. During these last five years we’ve let thousands of dollars come and go, spending it on things we deemed more important than debt. Were they? Opportunity costs are hard to calculate.
Here’s her second justification in the thread -
As to the rest of the comments–I can’t defend what I did. It’s what I’m doing. For us, right now, it’s the option that feels right. I. JUST. CAN’T. TAKE. IT. ANY. MORE.
To the last point, you have to think things thru, laterbloomer: You can’t just assumed someone can VOILA! make $700 extra per month. My goodness that would be heavenly.
How did this all happen? BAD DECISIONS!
It all started a few months ago when she choose to buy a second home and rent out her first because she WANTED the second home. I ranted about it here, and said it was a really bad decision.
If I thought that was stupid, well this new decision just compounds her decision. It also was likely predicated by her decision to buy a second home! They were short $400/month with the rent for the second home. It was an extra $400/month. WHICH she justified her husband would earn.
Hmmm..if that were the case why wasn’t their debt paid off asap? Why can’t he work part-time to pay off their debt? Why oh Why?
Because it’s not important. What is? Their lifestyle. Instead they justify cutting savings so they can live the lifestyle they want. This is the worse decision ever.
Well can’t wait for the bankruptcy article in the next couple of years or something.
11 responses so far ↓
1 dogatemyfinances // Jun 3, 2008 at 1:40 pm
She didn’t really explain her retirement “plan.” Math has never been her strong suit. I guess she either expects to live off social security, or she plans to make it up later. Par for her course, really.
2 devil // Jun 3, 2008 at 3:21 pm
This decision doesn’t surprise me in the least. The woman isn’t all that bright to begin with, so I wouldn’t expect her to act sensibly.
I thought that the real estate “investment” was her retirement plan? I can’t imagine anyone dumb enough to plan on social security for total support in one’s old age.
3 Jim ~ mydebtblog.com // Jun 3, 2008 at 3:37 pm
I don’t think there’s any problem to stop saving for retirement for a short period of time to get out of debt. It becomes a problem if it is long term, greater than a year or two. I’ve debated doing this myself actually, because I want to get rid of the credit card debt quickly.
If you think of this strictly on math, would you borrow money to invest it? I’m not sure how many people would say “yes” to that and justify it by saying the earnings would be greater than the risk, etc. I feel that I would be making a better investment for myself by paying off credit cards with higher rates than the rate of return I’m getting on my investments.
Personal finance is a hot button and we all have personal choice on how to handle cash flow. Blaming past decisions, lifestyle choices, amount of income from working, job types, there are many factors to look at. I don’t worry about what everyone else does. Why you can’t wait for them to fail because you don’t agree with what they’re doing I don’t understand.
4 Barb1954 // Jun 3, 2008 at 5:29 pm
I agree with Jim. Life is too short to get upset or angry about the foolish decisions that other people make with their money.
5 Mrs. Micah // Jun 4, 2008 at 1:12 am
She seems to me rather like the Penelope Trunk of personal finance. Someone you don’t particularly want to be but it’s instructive to watch.
6 Fabulously Broke // Jun 4, 2008 at 2:36 pm
She doesn’t really seem to have her head screwed on straight -but I agree with Mrs. Micah - I like read and watch people like that on TV or on the web, for what NOT TO DO.
She makes me angry too, Barb & Jim.. I know life is too short to get angry, but it frustrates me when I read people like her giving advice or talking about her financial life and others are reading it thinking: Hey, MP did that, I’m not alone and NOT an idiot because she isn’t an idiot!
Umm.. not the same…
Arg. I ranted about something similar I think, about some writer called Single in the Suburbs who was making stupid decisions because she was not rational and thinking emotionally
7 LivingAlmostLarge // Jun 4, 2008 at 5:16 pm
I hate to mention this but she charged $300 to attend a financial seminar put on by MP and another person to advise people about FINANCES!
I thought it a joke but apparently it wasn’t.
8 SavingDiva // Jun 4, 2008 at 5:22 pm
I love the comments even more than the post!
I can’t stand MPD. She’s such a whiner! Plus, she now has a kid that she’s dragging into this mess. I do appreciate the new hair color though. The blonde wasn’t working.
$300 for a night with MPD….I think I’ll pass. I’ll toss it into my EF….but I do wonder what she said. It would be fun to be there and ask her “what would MP do in this situation?”
I’m mean and I love it.
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