What the meltdown means to me, one of the Greatest Generation
Filed under: Budgets, Debt, Retire, Saving Money, Relationships, Investing
My mom is in the eighty plus group, lives alone, and manages her own finances. She has been retired for more than twenty-six years, living off of pensions, Social Security and savings. While she is concerned about rising costs, especially gas and energy, the economic meltdown does not really affect her financial status.
Like many of her friends and others in her age group, she learned a long time ago how to stretch dollars. She grew up in the depression and "frugal" could be her middle name. She saves foil wrap and baggies, pays off all of her credit cards in full each month, and combines trips with her car to save gas. Her occasional splurges are trips to the casino where she spends no more than $20 and usually gets a free meal.
Mom does not have a large stock portfolio. As she says, "What more do I need to save for?" Her house and car are paid in full and she retired with no debt. In spite of relatively modest income, she is able to put money away each month for unexpected expenses.
While she does not see dramatic changes in finances for herself, she worries about her children and grandchildren. College, rent and homeownership is so much more expensive than years ago. After all, her first home cost less than $3000 in the 1950's. The same home is now around $350,000. Yet, wages have not increased proportionally.
I emulate and admire my mom's approach to money. With simple needs, she has the extra money for trips to Europe or cruises in the Mediterranean. Spending less than you earn is a simple formula for success.
Barbara Bartlein is the People Pro. For her FREE e-mail newsletter, please visit The People Pro.
Reader Comments (Page 1 of 1)
10-08-2008 @ 11:25PM
dean said...
I fear I might lose everything I have & I might have to go @ live with my children .I would be a burden on them. They would all want me. I am almost 80. I came from the old school. Dont buy anything unless you have the money to pay for it.
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10-10-2008 @ 12:26PM
MAry said...
Great planning. I too have a home that is paid for and live below my means. I love all around me and have never had a need to keep up with others. Now is the time to teach the young that all will have to live on less and make what they have last longer.
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10-10-2008 @ 6:27PM
JULIUS ROMANOFF said...
The market gyrations have become a real concern for me. I am 86 years of age, and therefore am a Notch Baby. Born in 1922 I get less in Social Security each month than individuals born after 1923, who paid FICA on the same earnings.
I listened to the dire warnings that Social Security will soon be broke, and unable to pay retirees a pension. The solution is obvious. Raise the age of retirement, and pay less than prior retirees, and raise the limit on which the tax is levied. Although there are less people working, their earnings are much higher, and will actually contribute more to the Fund.
I tried to be responsible and provide for my retirement by establishing IRA and Keough investments in Mutual Funds. Now I regret not spending my earnings, and enjoying spending the money I earned. My investments since 1/1/08 to today have lost 40 % of their value. To make matters worse at my age I am required to take Mandatory Distributions from my retirement investments based on the value of the funds on 1/1/08. This means that to reach the proper dollar amount shares will have to be sold at the price as of 1/1/08. The result will be less shares remaining in my account to be multiplied by 40% less value than at the beginning of the year. It means I will be unable to recoup the loss in my lifetime.
Since the government was so willing to help Investment firms, Banks, etc. by passing legislation to use 700 Billion dollars to aid the ones who caused the problem, by their greed and poor business tactics, I suggest that Mandatory Distributions not be required this year to help us minimize our income and thus pay less taxes on retirement investments.
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10-12-2008 @ 8:08PM
MAry said...
I agree with you in regards to the mand dis not being required in this time of trouble. They should be suspended until there is some sense to the market. You and I share lost money---my 401/357 have gone down over 40% as well. I know this sounds easy...but, as they say, don't sell a ting now. Things will improve and when it does it will happen fast. The market will go up at least 50% within a week ...we just don't know when that week will be.
10-12-2008 @ 6:55PM
Elaine Keener said...
I am 72 years old and have nothing but stocks. I have no retirement, pension, annuity, etc. but live off interests and dividents from my stocks. I have lost 40% of my portfolio and would like to meet with you to receive your advice. Would you be willing to help me? my neighbor, has used you for years and is very satisfied with your help.
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10-12-2008 @ 7:29PM
George said...
What a scary thought-an 80 something lady still driving! The daughter must have a death with for her mother!
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