4 Essential Steps to Financial Reality

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The prior two posts leave us with the question of why most of us that are not very wealthy will struggle financially as we grow older. The answers would seem to be rather obvious, and we can't pass the responsibility off. Most of us are undisciplined, greedy, envious, lazy and irresponsible - in other words human. As part of my work, I attempt to teach people the value of disciplined saving. The most common excuse I hear is "I can't afford that, all my money goes to pay bills." My response is usually to ask what amount a person could save - starting at, say $100 a week, and going down in the face of objections, to whatever level, even 10 cents, I can see that the person has got the message. I doubt many people will actually take action, but we can only spread the word.
I was very fortunate to have been taught the value of discipline by my mother, and have had the opportunity to participate in the 'Penny Bank' at school. Maybe a dose of reality will help restore some of these "old-fashioned" values.

Dave of GA 1:48PM February 03, 2010

Fred is right. A little planning and some self control will set one up for life. I retired at 51. I am not rich but I do not owe anyone anything. Example: net 2,700 per month not counting stock market assets in the 100K range. A few years from now will draw another 1,200 per month from SSA. Counting out property tax's, insurance and utilities I net 2,300 now for spending on whatever I want and that is quite a bit of free money per month.
Anyone can do the same and I do not understand why people don't. With a high school degree and 32 years working , set me for life. Those who work up to age 65 have no excuse for not having a comfortably retirement.

Michael of SD 9:13PM February 01, 2010

I'm 76 now and have always used a checking account for all my expenses. I/we have all our income automatically deposited to this account and most relatively fixed expenses (mortgage, utilities, etc.) automatically deducted. Any cash we need is withdrawn thru an ATM from the same account. Any investment income or expenses also go thru that account. We try to use only one credit card (all $ also automatically deducted) and balance my checking account monthly using a spread sheet with various column headings. This has always (for the last 20 years) worked well. I have had an IRA type account thru my work & on my own since the early 70's alway putting in the maximum to max-out my employer's contributions. Also, we try to live on 75-80 % of my income in order to always save some! Anyone could do the same. Obviously we are now comfortably retired with no debts and the "three-legged-stool" (SSA's +pension+investment income) works out well. I cannot see how others would not do this!

Fred of CA 8:15PM February 01, 2010