Nancy Nealious has been through a lot in a short time–and it’s taken a toll on both her emotions and finances. Just 26, she’s been so stressed that her hair is falling out. Her most significant loss came in August of 2006, when her 53-year-old father died in a head-on automobile accident. In the year and a half since his death, her six-figure inheritance has practically disappeared, though the shock of losing her father has barely faded.
But there is at least one piece of good news: Nealious expected to get her master’s degree in counseling from Troy University last month, with just $8,500 in student loans and no credit card debt. She was able to walk away without a mountain of debt because scholarships covered her undergraduate work at Winthrop University in Rock Hill, South Carolina in full. That good history bodes well for her, as she wants to attend medical school in the near future.
But even that excitement was tempered for the Aiken, South Carolina, resident because she was without a steady income for about six months last year. Before that she had juggled working part time as a customer service agent at a Marriott hotel and as a program coordinator for a teen pregnancy prevention program. Though the $8,000 income was modest, every bit was essential for the student. She recently obtained a full-time job as an outreach specialist for an HIV/AIDS program. Still, she says staying positive is a challenge: “It’s just that a part of me is still grieving. I’m overwhelmed.”
To add to her woes, her 2003 Kia Spectra needs repairs and she’s trying to nurse it for as long as she can. Fortunately, she lives rent free in the house her father left to her and her older sister, who lives elsewhere. But the other thing Dad left–an inheritance of $113,000–is mostly spent. “I hardly have anything to show for it,” says Nealious heavily. “I could have been smarter. Where did it go?”
She says people knew her father had the means to leave her and her sister money. And her windfall was met by friends with problems. “I gave one friend $3,000, I helped someone else with their mortgage,” says Nealious. “I wanted to help everybody.”
That generosity would prove costly as she is now living off the $30,000 left of the money she received last fall. It was a mix of insurance and funds from a retirement account and an investment account. She’s already paid $1,100 in state and federal taxes for money she received in 2006, and she expects to take another tax hit for 2007.
Nealious seemed to start off in the right direction, by seeking out a financial planner to help her figure out the right road to take with the money. She got referrals, but ultimately she made the wrong decision; she feels her planner pressured her into getting an IRA and an annuity. “I did what he advised. I’m not even sure what I bought or that he had my