This Economy is Killing People: I Just Don't Know What to Say Anymore.

We receive questions from readers and friends all the time on what to do about their finances. As you know or can see (if you hunt around the blog) we post the questions we're asked and provide knowledgeable answers, but some of the questions are just plain out of the norm of standard financial reasoning. The main thing is, how are these things happening to people? The only thing I can come with is, this darn economy is killing people.

What is blowing me away the most is the amount of people who were making not only good money, but great money, and had high credit scores. Credit scores that were in the high 700's or even 800's. Had a the necessary six to eight month emergency fund reserve and are now talking about bankruptcy.

So when I say I don't know what to say anymore I guess I mean I am just dumbfounded. A lot of people are talking to me about bankruptcy. These same people are the people who have been financially responsible by always paying their bills on time, never had high debt aside from their mortgage and maybe a car payment, had extremely high credit scores, had significant savings, and made responsible financial decisions. Everything that I know to be right is just not good enough.

One couple I talked to yesterday had put 20 percent down on their home, has no car payments and no credit card debt until last year and is now talking about throwing the towel. A series of job layoffs has caused them to burn through their savings and take cash advances after that ran out. They have returned to work, but at less money, which combined with the debt from the credit card cash advances has caused them to be in the hole and have to advance money to make up the difference. They are now in a vicious circle that they may never get out of.

This couple has done everything right. Made a fantastic down payment on their home and did what they should have. So how much does one have to save? Is 8 months of reserves not enough? Should they have dumped their home if it was now beyond their means? But that would have meant a short sale. This world is no longer earth, but become Bizarro World.

This economy needs to be turned around somehow. Good people are going down the tubes and being caught in a catch twenty-two. Homes upside down, job layoffs, savings gone, credit shot, what is it going to take to turn things around? Stop the world I want to get off.

For answers to all your financial questions check us out. Subscribe so you never miss the boat.