Dear Liz: I am a 41-year-old man who is married with small children. I have finally reached the point financially where I am meeting or exceeding personal goals for retirement, college savings and reduced monthly expenses. I have a high income. I drive a piece-of-crap car because it’s paid for, but I am still hemorrhaging cash! Yet my peers are buying second homes at the lake or in ski country. What am I doing wrong?
Answer: Congratulations! You’re doing a lot right with your money, and you may not be doing anything wrong. To borrow a phrase, you can’t judge your insides by other people’s outsides.
Some of your peers may have inherited money, or received infusions from generous parents. More likely, they’re not saving enough, or at all, for retirement or their children’s educations.
They also may be deeply in debt. Although their lives may look good on the outside now, their futures may be a lot less flush.
You can’t know how other households conduct their financial affairs, so keep focusing on your own situation and how you can make it better. If you feel like you’re hemorrhaging cash, track where the money is going for a while. If you discover as a family that you’re spending on things that aren’t important to you, you and your spouse can look for ways to redirect spending to better support your values.
Congratulations. It sounds like you have your priorities right. I turned 40 the year my third son was born. Like you I drove a car that was paid for and not the nicest car in the lot at work. Money was tight and luxuries were limited. We were comfortable but always a bit anxious about finances. I am now 70. The boys have grown and moved out and my wife and I have retired. We have no debt and enough resources to enjoy our lives and those of our kids. Enough to help them get started in life. It was worth the patience. Instant gratification is never a good financial strategy.
Dear Liz: I’m 69, retired and collecting a pension from the Post Office and since I didn’t pay into SS, while I was with the PO, I’m only collecting around 55% of my SS benefits because of my pension. My question is, if I happen to meet my maker before my wife, she will be entitled to receive 55% of my pension, so will she be able to collect some of her own SS benefits too?
Yes. Her widow’s pension won’t affect her ability to claim her own benefit.
Bravo, Frank P.Richichi. I did the same.