Joe, 53, has been a faithful son. Back in 1998, after his dad died in Florida, he invited his then 85-year-old mother to come live with him in his Philadelphia row house. "She jumped at the chance to move back near New York," says Joe, who grew up in Manhattan and New Jersey with three older sisters. For the first 18 months, she was in good health, and enjoyed bus trips to New York and Atlantic City.

Then suddenly, dementia set in. By hiring a full-time companion for his mother during the day, Joe managed to care for her at his home for the next five years. "I was determined to keep her with me as long as possible," he says. "I was successful until the last two months of her life and I am very proud of that."

While Joe made a huge deposit in the bank of integrity -- one that will pay peace-of-mind dividends forever -- it left his finances in disarray. He contributed to the cost of his mother's care, and when she moved into a nursing home far from public transportation, he had to lease a car to visit her.

Following her death, Joe had his own series of mishaps: He slipped on the winter ice and got a concussion; he was mugged and ended up in the hospital; and he broke an ankle during a weekend trip, putting him out of his corporate purchasing job for two months with no short-term disability coverage.

"I find myself feeling like I am on the edge of a cliff with a very large dog bearing down on me quickly," he says. Over the last year or so, he has amassed $15,000 in credit card and medical debt. He owes $124,000 on his mortgage, a 30-year fixed-rate loan at 6.375%. On the upside, he earns $80,000 a year and has $40,000 saved in his 401(k) plan, although he stopped contributing to it as the debt piled up.

After paying his fixed monthly bills -- housing, utilities, transportation, insurance and minimums on his debt -- Joe has about $1,700 a month left. But it evaporates. "When I put the numbers down on paper, it seems that I should be in fine shape but for some reason I am broke at the end of each pay period," he says. Food is one possible culprit: With his mom gone, he eats out instead of cooking, and has a generous tendency to pick up the check when dining with friends.

A Step-by-Step Plan for Joe

First, Joe needs to identify the black holes in his budget so he can earmark more money to paying down debt. He can use a budgeting tool that links electronically to his checking and savings and automatically tracks his spending such as, a free tool, or a paid subscription program like (Full disclosure: I previously worked as a freelance contributor for the site.)

Next, Joe has to tackle his high-interest debt. He has two credit cards charging more than 25% interest. Because his salary is high and his credit score is still solid, Joe took advantage of a card offering 0% interest for six months and is rolling the high-interest cards over to the new one. And, he has stopped paying with plastic.

Third, Joe should look for quick budget cuts he can make to accelerate his pay down. For instance, he hates driving, and only leased his Volkswagen Jetta to visit his mother in the nursing home. The lease, insurance and gas cost him about $570 a month, and he's got a little over a year left on the contract.

Joe preferred his old commute, by train and bike, which cost about $150 a month. "When I didn't have a car, I rode my bike everywhere," he says. "I felt better physically, and commuting by train to my office downtown, I had time to relax and read."

Joe can call Volkswagen Credit and find out the terms and fees for legally transferring the lease to another driver, and then connect with interested parties at sites such as or It may cost several hundred dollars in fees to close the deal, but Joe could save several thousand over the course of a year by dumping the lease early.

Another possible source of immediate cash may be hiding in Joe's taxes. In April, he typically receives a tax refund of $3,200. By adjusting his withholding, he can get that money in his monthly paycheck right now, and use it to further eliminate debt or to restart his 401(k) contributions.

Finally, once Joe has a clear handle on his spending and debts, his credit score will organically improve, positioning him to refinance his 6.375% mortgage. Joe has 24 years left on the loan. Because interest rates have hit historic lows, he could shift into a 15-year, fixed-rate loan and shave nine years off the mortgage for only $60 more a month. That would position him to be mortgage-free when he's retirement age.

Alternately, Joe is considering downsizing. He says his house is too big for just him and his dog. "I don't need 1,600 square feet," he says. "I use two rooms out of seven. I want to simplify. But I think I'll wait a year, get myself back on track and reevaluate."

Struggling with your own personal finance situation? I welcome your questions, but this column is also about your wisdom, ideas and experiences that may help other readers. Email me at You can also follow me on Twitter @MoneyHappiness.

Content Solely Informational: Content on this site is for informational purposes only and is not intended to be investment advice, or any other kind of professional advice. You must determine for yourself or in consultation with a professional whether any financial strategy or advice is right for you.

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--------So, where were his three older sisters?

September 28 2011 at 4:21 AM Report abuse rate up rate down Reply

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September 28 2011 at 1:20 AM Report abuse rate up rate down Reply

So, where were his three older sisters?

September 20 2011 at 4:45 AM Report abuse +2 rate up rate down Reply
1 reply to kv37's comment

"has a generous tendency to pick up the check when dining with friends."...Actually this tells one a lot. The sisters probably knew that Joe would "pick up the check". Joe may be short on cash, but he'll never be short on "friends" as long as he keeps picking up the check.

September 20 2011 at 10:39 AM Report abuse rate up rate down Reply

To those who have plenty of money, good health, vacations, etc., then money isn't everything. However those who are retired, after having paid into the Social Security Fund, as required by Law, all their working life only to find out that those in Government - Have SQUANDERED their retirement money, by giving BILLIONS of the Funds Money, to Their Pet Projects, then Not having money, not only means a lot but means everything!

September 19 2011 at 3:01 PM Report abuse +1 rate up rate down Reply
2 replies to gmydogbud's comment

If the Republicans have their way with Social Security and Medicare, the only thing we will have to look forward to is working until we die. If they eliminate the EPA and department of labor we will not only die on the job but die early.

September 19 2011 at 4:34 PM Report abuse -1 rate up rate down Reply

Personally I'm not a big fan of Social Security, but I think it's pretty well established that if you allow people to manage their own retirement funds a large percentage of the population will end up without any. The last time I looked the checks were still going out each month.

September 20 2011 at 11:30 AM Report abuse rate up rate down Reply

Unfortunately I agree with rosecabinets. I'm in my 60s and I've worked 50 - 60 hours/week since I was a teenager. I worked my way through college, worked my way through graduate school, and put my kids through college. I've worked at a fairly good profession for many decades. I invested in the market but got clobbered by the downturn. I invested in real estate and got clobbered by the downturn. I put my money in the bank and got clobbered when interest rates fell below 1/2%. Two of my adult kids moved back in when their respective employers closed up shop completely and they couldn't find anything else.

Bottom line, I worked hard, I tried hard, I did my best to take care of those near and dear to me, I feel as though I did everything "according to the book" . . . and recently I had to have that painful "family sit-down" when I told them there was never going to be a retirement . . . I will have to work until I drop dead at my desk,

I have a fairly wide social network of people my own age who are nearing "retirement" age, and ALMOST NONE of us feel we can retire. And that, unfortunately, is the new financial reality out here in the real world.

September 19 2011 at 1:43 PM Report abuse +1 rate up rate down Reply
1 reply to ryanslaws's comment

I know that I don't have enough information to make a judgement, but I find it hard to believe that someone who has a graduate degree and has worked for in a "fairly good profession for many decades" hasn't amassed enough assets to be able to retire. You either have made some very poor financial decisions or had some incredibly bad luck. Many in their 60's, who have lived through the same economic downturn, will have no problem retiring.

September 19 2011 at 4:23 PM Report abuse rate up rate down Reply

There is no digging out!!! I am 50 , work full time and take care of both of my parents and help supported my husbands
mother. There will be no retirement for me or my husband. There is no way to ever get ahead.

September 19 2011 at 1:07 PM Report abuse +2 rate up rate down Reply