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Money Drain: Husband Lost his Job, Couple Still Spent Money, Couple Loses House

My sister and her husband just recently had their home foreclosed on. He had been laid off temporarily this past winter and instead of cutting back on their expenses after being reduced to one income, they continued to spend the same as they always had. They became so far behind on their mortgage payments that the bank had to foreclose on their house. From what I am told, they still owed $200,000 on the home, and after it was foreclosed on they bought a brand new mustang for $32,000.

– Submitted by: Rachel

Lesson Learned:
Job loss is pretty common these days, unfortunately, but it doesn’t have to be devastating. There are a lot of significant changes that have to be made to compensate for the loss of one income in a two income family. Things like birthdays and holidays no longer exist in regards to buying presents and frivolities. Going out to eat, going out to party, shopping, etc. also no longer exist. You spend the absolute minimum on bills, you eat cheap home-made food that you can have leftovers throughout the week. You essentially do whatever it takes to keep afloat until a second income is brought back into your lives. And you most certainly don’t go out and buy a new car because you just lost your house.

Amount Flushed Down the Money Drain: $232,000

About Crystal Groves, Google+

Crystal Groves is a farmer, web developer, musician, blogger, and personal finance enthusiast from the back hills of Maryland and Pennsylvania. She started Money Drain as a project to encourage people interested in fixing their financial situation to share their stories and learn from the stories of others. We all make mistakes, but in order to change we have to make changes.

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