In 2004 the housing market was rising fast. I had just gotten hired as a police officer the previous summer and was making more money than I ever had. It was my first big boy job. With a wife and two small kids, buying a house seemed like the right thing to do. That’s what married people do. They buy houses, right? In those days, mortgages were being handed out like Las Vegas street flyers. If you just walked by a mortgage company they gave you one.
House Fever
My wife and I were tired of our tiny one bedroom apartment situated in the loft of a barn so we went house shopping. We got a mortgage we shouldn’t have from Wells Fargo. The mortgage was an 80/20, 5 and 1 ARM. This meant that 80% of the mortgage was treated like a regular mortgage while the other 20% was an interest only line of credit that would automatically adjust every year after the fifth year. Pretty gross.
We reasoned that we wouldn’t have to worry about the interest rate adjusting because we would be out of there in less than five years and would be able sell the house for a handsome profit. With that money in our pocket we could buy a bigger and better house. It was a no-brainer. We based that assumption on the rate at which house prices were currently climbing. There was nothing to worry about. What could possibly go wrong?
2008
Then 2008 happened and in no time our house value plummeted. We owed more than our house was worth and felt like we were being suffocated by that terrible deal.
Taking on that mortgage was a dumb decision. We trusted the mortgage broker who “helped” us afford a house we otherwise couldn’t. Don’t get me wrong, it was our own fault — we signed those papers — I just wish there was someone around us that would have told us not to do the deal. Also, Wells Fargo is a terrible company. (Was that out loud?)
I did in fact learn math in school, but I was never taught how to handle my money or how to recognize a bad financial deal when one came knocking. I already had student loans, credit card bills, and a minivan payment. The mortgage was just stupid icing on the idiotic cake.
Shiny Things
We all do it, don’t we? And it’s not just with house purchases. It’s cars, trucks, campers, boats, vacations, and other large purchases. These kinds of bright and shiny things seem to plague young cops with new jobs and new salaries. Sadly, it seems the young cops that fall into this trap turn into old cops who continue to fall for it. Play stupid games, win stupid prizes.
Look out the window at the employee parking lot of your station. How many new cars do you see? I bet new cars are a pretty high percentage of what’s parked out there. Do you think those $50,000.00 SUVs were paid for in cash or do you think there are loans on those suckers? Exactly. Mortgages, car payments, student loans, and credit cards are killing us! We’ve become stressed-out slaves to overtime and details just to make those payments instead of having money left over to save, invest, and enjoy.
To Buy Or Not To Buy
Like me, you probably had your finances reviewed as part of your background check. Debt and the stress that goes with it can be a strong motivator for unethical behavior which is why our finances get scrutinized as part of the hiring process. But no one ever seems to follow up on that after we get hired and we start spending money like water and pile up debt like nobody’s business. That mounting debt leads to worry, stress, crumbling marriages, and excessive work hours which in turn sets us up for foreclosures, repossessions, and divorce.
If you’re new to the job or you made a move to another department and are making more money, please don’t spend money you don’t have by financing something you can’t afford. Any by afford, I mean pay for in cash. Don’t do it.
Old Guy New Tricks
As cops, we have enough to worry about. For example, getting murdered. Let’s not add the stress of financial insecurity to our lives. Listen to me. I’m an old guy who’s made plenty of mistakes with money and would be way farther ahead than I am now if only I had made better choices in the beginning. I don’t have all the answers, but allow me point you in the right direction.
Pick up the Total Money Makeover by Dave Ramsey and learn how to handle money, get out of debt, and retire with dignity. It’s an easy read that worked for me, and it can work for you too. It won’t be easy, but you can do it.
To learn more about car payments, different types of debt, and money traps to avoid from actual experts (since I’m not one) click on the links.
___________________________________
- What is a mistake you made with money?
- How much did it cost you?
- What would it feel like to have no payments?
___________________________________
Thanks for reading! Do you have a story that you think we could learn from and that you’d like to share with Johnny Tactical nation? Fill out the contact form and include your name, rank, and department, or email it to [email protected] and follow these guidelines:
- It must be a firsthand account
- True
- Have a lesson, principle, or tactic to apply
- Cleaned of names, dates, and places
- Include your call sign
If your story is selected and published in our blog you’ll get the credit using your call sign and we’ll send you a free Johnny Tactical sticker.
Leave a Reply
Your email is safe with us.
You must be logged in to post a comment.