Wednesday, July 30, 2008

Home Makeover Gone Bad

Do we all secretly think, “my life would be so much easier if I won the lottery…or a rich aunt left me a million dollars or… my business finally hit it big?” In the end no matter how we fall into money, it is how you manage that money that really matters. In my career life I haven’t always made the best choices so I try to teach my students to realize every penny you get is a gift ultimately from God so be good stewards. Save some, give away some and use some. Keep on living prudently.

Here’s the story of a family who was given an amazing gift but 3 years later are in trouble again. What can we learn from them? I believe we are blessed so we can bless others. We shouldn’t just give our disgards away but give those who can’t afford it some really nice things. But be sure to mentor them along the way.

"Best Bargain Gone Wrong" edited
by Donna L Montaldo

I enjoy watching ABC's "Extreme Makeover" and always end up shedding a tear when they "Move That Bus!" although I do not come close to the tears which predictably are shed by design team members. The program is successful at creating a lot of warm fuzzy moments while we a family's life forever changed for the better.

At least that is how things are supposed to work.

The Harpers' Story

The Harpers, while living in the projects in Brooklyn, New York, suffered the loss of their 2-year-old son who choked to death before paramedics could save him. The Harpers needed a change. Desperate to get away from the projects, took on extra work until they had enough money to buy their first home.

Wanting a safe place for their children to live, they found their first home in Clayton County in Georgia. But the house turned out to be a major money pit. The roof was filled with holes and a broken septic tank would fill the home with raw sewage.

Their new house became so intolerable that many times they would be forced to sleep in their van, until the van was wrecked.

Having spent all their money on buying their home, the Harpers were unable to afford the desperately needed home repairs.

Then their lives took an extreme change. The ABC program, "Extreme Makeover," saw the decrepit condition of their home and came to the rescue. Together with Atlanta-based Beazer Homes USA and several volunteers from the community, the Harpers received a new home. But it was not just a home, but rather a sprawling 4600 square foot mini-mansion. The inside of the home was filled with top-of-the-line appliances and home interiors, four fireplaces on the main level, a solarium and a home office plus a three-car garage.

All the construction costs and the labor were free. Total value of the project was an estimated $700,000.

We all slept better knowing that the Harpers' had a beautiful and healthy home and could now focus on the future.

But unfortunately that is not how things have played out for the Harpers. The Atlanta Journal Constitution recently reported that the house is up for auction because the Harpers used it as collateral for a $450,000 loan to start a construction company which failed.

Squandering or Financial Ignorance?

Usually when you give a gift you have no claim to what happens to it, but I suspect if you ask some of the volunteers who donated money, time and expertise to help the Harpers, they may not be happy with this news.

Was it squandering or financial ignorance which caused the situation? Perhaps their dream of starting a business seemed possible with much of their other financial burdens under control. And possibly it could have worked had one of them had a good understanding of finances to make sound decisions.

ABC said they advise all families who got a new home to find help from financial planners. It could be possible that the Harpers looked to the money lenders for good financial advice.

Why So Grand?

Many of those selected for "Extreme Makeover" appear to be living frugal lives as a necessity. Often the homes built for them tower over that of their neighbors, almost to the point of being ostentatious.

For some, managing taxes and other financial responsibilities of owning a large home could become a financial disaster. I’ve always wondered why ABC producers feel it is necessary to build such big homes rather than sensible homes, but then I guess they would have to change the name of the show to just Makeover.

Moving forward,
Jeff Roach

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