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A Financial Planner Admits Her Money Mistakes Comments

  • By Joanna Shoemaker
  • January 07, 2013

blonde runner

Today’s post is part of a new series called “Life by De$ign,” which explores non-traditional choices that women make in order to make their finances work.

I’m a 33-year-old financial advisor, and you can call me Joanna. I invest and manage millions of dollars for people.

So why am I moving my husband and two toddlers into my dad’s house?

Because we've been living beyond our means, (LBOM). Like the shoemaker's kids who go barefoot, I tell other people what to do with their savings while my family has none.

LBOM, or the "L-Bomb," as I like to call it, began when my husband and I bought our first house in 2005. We thought that to be "real adults" we had to buy a house. It was the height of the market, and we'd been outbid on four previous offers. Our desperation to buy caused us to act irrationally.

After using all of our savings for a 5% down payment, we took on a mortgage payment that ate up 30% of our net monthly income. I suggest to clients that it should never be more than 20%.

Six years and two babies later, our monthly expenses are $12,000 while our net income is only $10,000. After three months of putting my kids' daycare payment on a credit card and seeing our revolving debt snowball to $40,000, something had to give. And it was our pride.

While I may have to see my 75-year-old father in his underwear, at least my kids will have shoes.

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Go crazy. What bold actions are you taking in the name of financial security?

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