When a distant relative called me for some help with his 401k I was happy to oblige.
Anytime I can help someone save for their financial future I get excited.
Unfortunately, after several minutes the excitement wore off.
The relative had just started his new job and hadn’t even put a single penny into the 401k yet. He was reading about the benefits his 401k offered and the one that caught his attention was the borrowing provision.
He asked me, “How do I go about borrowing from the 401k?”
Ummm….the last time I checked you can’t borrow from a 401k that doesn’t have anything in it!
What I eventually learned was that relative had money struggles I wasn’t aware of.
It’s likely most people who are in financial trouble are aware of it, and usually long before landing in bankruptcy court or losing their home in foreclosure.
After all, a personal financial crash is almost always preceded by a long period of financial instability.
What are the warning signs you’re financially unstable?