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Money is the subject of this month’s blog, corresponding to chapter four in my new book entitled, “Paths – A Primer for Ladies-of-a-Certain Age,” tentatively to be published this autumn. It occurred to me it might be helpful for women, just starting to recognize themselves as older, if I wrote a simple workbook, a primer as school books used to be called, about this time of life. Also, since I have gotten stuck many times on this path of a lady-of-a-certain-age, I thought it could be beneficial for others to review this material in an attempt to find the way again. In this blog I cover the essence of chapter four, which deals with critical issues around money for the latter third of life. I would love to get any comments or suggestions you might have.
So — money, honey (!) is the topic of this blog. Hang on to your hat, grab your cat or dog for blood pressure control, and brew yourself a good cup of tea!
I wish I could sugar coat the importance of money for ladies-of-a-certain-age, but I can’t, and it would be very deceiving if I did. Frankly, ladies, this is where the rubber meets the road. And, I hate to tell you, no financial advisor is going to save you by waving a magic wand. If managing money has not been your thing, well now is the time to “put on your big girl panties” and stop pretending prince charming or something – God knows what — is going to save you.
If you have been managing your money all along and planning for retirement, this blog and chapter of my book will hopefully give you some pause to consider double checking your efforts.
To lighten things up a bit, you might want to listen to the Beatles sing “Money (That’s What I Want). The last part of the song really highlights what we need in the final third of our life:
“Well now give me money
A lot of money
Wow, yeah, I want to be free
Oh I want money
That’s what I want
To start, I suggest taking time to think about what money means to you and what are your financial principles. In other words, defining your personal foundation for your financial decisions. There is not a universal set of blueprints for money management at this age or any other age.
Believe it or not, understanding my feelings and beliefs was essential for me to establish my money during the later third of my life. I went back and looked at my childhood and how my parents managed money and their values around the topic. I remembered my mother saying one day that she could not live like Aunt Mary did because she could not handle having a bunch of things without knowing if she could really afford them. Obviously, the uncertainty did not bother Aunt Mary, but it bothered my mom. I realized I am a lot like my mom in regards to money. I like to know what I can afford and where the money is to pay for it. My mom took care of paying the bills at our house. I realized bookkeeping has never been something I relish. I needed to keep it simple and quick.
I recognized I had two main principles: I wanted to live within my means and I would adjust my lifestyle to do so.
Now, is the time to list dreams for the future, and to estimate associated costs. Some of my dreams included travel, playing various sports, and moving to Colorado’s western slope.
My dreams were the motivators for achieving my six goals. I acknowledged if I was going to live how I wanted to live for the remainder of my life, I needed to achieve six basic goals:
1. No house payment
2. No car payment
3. No debt
4. A nest egg, an emergency fund of three to six months of expenses in a bank savings account
5. A simple way to keep track of all monthly expenses
6. A realistic budget
Then, since both income and expenses will change in the later third of life, a summary of what they are now compared to what they will be as you enter the next phase is critical information in planning for future finances. Here is a partial list:
How much money do I have?
Where is the money located? (bank accounts, etc.)
How much money is coming in each month?
How much money will come in when I retire?
Do I have any credit card debt? If so, how much and which cards?
How much is my house payment or monthly rent?
Do I have a car payment or car lease payment? If so, how much?
How much money do I need for basic necessities?
What does health insurance cost now?
What will it cost in the future?
Will my nest egg cover costs such as hearing aids, dental work, cataract surgery, etc.?
Finally, this information of income and expenses, besides being personally helpful, is essential for anyone trying to settle an estate. Letting that person know where it is located is the first step. The next step is keeping it updated.
Years ago, I remember listening to a tape by Suze Orman, America’s guru for women and finances. Much of what she said made sense to me. This quote from her has made such a difference in my life, “You’re never powerful in life until you’re powerful over your own money,”
Copyright – Elizabeth J. Wheeler May 6, 2020
