Credit.com highlights individuals who found a resourceful way to deal with the challenges of today’s financial climate.
Who: Kathy and Glenn Adams, 50s
Where: Near San Francisco, Calif.
What happened: In August of 2009, the warehouse where Glenn had driven a forklift for more than ten years unexpectedly closed. As a union member, he was making good money with benefits. “We were doing pretty well with the way things were,” says Kathy, who provides environmental consulting for her father’s business. “But no one was hiring forklift operators to make the kind of money he was making.”
Challenges: With the recession and ongoing downsizing in America’s manufacturing sector, Glenn spent months looking for another similar position but was unable to land anything. The bills were piling up, and the Adams had to negotiate a modification loan on their home to consolidate their debt. They also had reached a point where they were consulting with a bankruptcy lawyer, due to some lingering credit card debts.
What they did: By spring of 2010, Glenn decided to change careers and become a long-distance truck driver. The problem was that the truck driving training classes needed to get a commercial license cost thousands of dollars, and money was tight by then – especially since the cost of living in California is fairly high. Mike had a 401 (k) from his previous job, but they didn’t want to incur the penalties for early withdrawals.
Fortunately, several years earlier, the couple had started putting money into two insurance accounts, one in each of their names, on a monthly basis, after reading Bank On Yourself by Pam Yellen. In her book, Yellen details how this approach uses dividend-paying, cash value, whole life insurance policies that are specifically designed to create secure savings plans for families who want to protect their financial future.
The Adams took money out of Kathy’s account to pay for Mike’s training. Once he completed the course, they needed to withdraw another significant amount of cash to pay for his trucking equipment. Throughout, they continued to make their monthly payments back into their accounts.
What they’re doing now: Fairly soon after finishing the four-week course, Glenn found employment as a truck driver in mid-summer. Although her father’s business has taken some hits, too, because of the recession, Kathy continues to earn money, and combined with Glenn’s new income, they are able to pay their basic expenses.
Having those two liquid accounts in place, Kathy believes, has been a life-saver for the Adams. Without that money, they wouldn’t have been able to pay for Glenn’s school and probably would have had to go through some major changes, such as applying for county assistance.
Advice: “It’s so much nicer to know that you have that safety net that you can fall back on when you absolutely need to,” she says. “I would highly recommend the insurance policy program to anybody. Even if you can only put away $50 a month, it’s worth it.”