I have discussed how emotional money can be many times now. Emotional issues circling around money have been going on for thousands of years. Well, here is a huge emotional event that I wrote about a year ago, how in the near future cities, counties and state governments will not be able to afford the pensions they are obligated to pay: Pensions Are Creating a Huge Financial Risk. It is easy to agree to pay something in the future to get elected today, but when time passes, the future elected officials are in a hard spot. They have a mess to clean up they did not create. This is a very emotional issue that will bring a lot of trouble and heartache to a lot of people.
I ask, how do you think the people living in Stockton, California liked their garbage sitting on the curb and not being picked up for weeks due to government woes over pensions and inability to pay government employees to provide basic services. Some of Stockton’s citizens were so mad they talked about burning down the mayor’s house. The mayor had no choice… he filed bankruptcy and pushed off the debts of the city, plus all the pension payments for previous employees and was able to pay to get the garbage cleaned up and restore other services.
My second question is, how do you think the retired Stockton city employees felt after they worked a lifetime and then their pension got pushed off with a bankruptcy? Emotionally charged? YES! Do you think they will vote for that mayor or county commissioner again? NO!
Who is to blame? Who can be held responsible? Do you hold employees responsible for pushing elected officials to give them raises, give them strong pension plans, to give them 401(k) contributions beyond anything you see in the private sector? Of course these past employees are really the responsible party to their own loss of income! They pushed and prodded and threatened not to support, or not to vote for this official or that official until they got what they wanted. Do you think these past employees realize they were the cause of bankrupting the city of Stockton? Of course not. The current mayor cannot go back in time and see how much pressure was brought to bear to give them strong pensions and pay raises. This is a perfect illustration of why money is so emotionally charged.
It has always been said throughout my lifetime that if you can get a government job, you are set for life. This may no longer be the case. Be aware of what is happening right now in IIlinois, and California and watch how Detroit and other cities filing bankruptcy handle the mess created by former employees. It is sure to get worse.
As elections draw near and healthcare costs soar, watch how everything plays out financially for the nation. All the big health insurers have pulled out of the Obama exchanges. One of these providers lost $2 billion this year!
How will all this affect you… personally? The only way to weather what’s coming is to get in control systematically using time-proven financial principles. Answer a few questions and test yourself for self-reliance:
- Do you save money on a regular basis?
- Do you argue about money with your spouse?
- Do you have a simple will or trust?
- Do you have a pension plan and is it fully funded, or just numbers printed on a paper?
- How much consumer debt do you have?
- Do you have any emergency savings?
Your answers to these questions will give you an idea of how healthy you are financially. For more help go to www.moneymastery.com and learn how to improve your personal situation… before it’s too late.