Peggy Janis, 34, is divorced and a single parent of two children, ages 10 and 12. Employed full time, she earns $28,360 annually. She has no other income sources such as alimony or child support because her ex-husband is disabled and can't pay anything. Janis wants to own her own home and develop a realistic budget to manage her income. She'd also like to get a higher-paying job and feel more financially secure.

Concerns about financial security are not unfounded. Janis currently has a negative net worth. This means that her debts exceed her assets, which include $800 in a checking account, $8,331 in a 403(b) retirement savings account, a $1,500 car, and $2,000 of personal property. She owes $19,000 on a credit card charging 19% interest and is a self-confessed "shopaholic."

Janis says she spends only $1,800 of her $2,363 monthly income, including $700 for rent. She doesn't have a car loan and puts nothing aside for savings. She doesn't own disability or renters insurance and has only the minimum state liability limits on her automobile policy. She works for county government and her employer provides health benefits for herself and the children. She and her ex-husband each have $50,000 of term life insurance.

Janis does not have a will. She is also living day to day and is most concerned with meeting current expenses rather than saving for the future. Her anticipated retirement date is when she would be age 65. To date, she has not started an individual retirement account but is contributing to a mandatory employer pension plan.

Questions:

What could be the cause of the strengths and weaknesses of the individual or family's financial situation.