Help! I'm Out Of Money

According to 2012 data, the poverty line in California for 2 people is $2450/mo, or slightly under $30,000/yr. Also, according to the 2013 Retirement Confidence Survey from the Employee Benefit Research Institute, nearly 3 out of 10 people have virtually nothing saved for retirement, and 57% have less than $25,000 in total savings and investments.

It is always sad to sit with couples in counseling who have come to retirement age with nothing but Social Security income, and often with debt as well. It puts them at or below the poverty level with little hope for a better financial future. Plus, when one of the spouses passes on, one of the Social Security checks disappears. It might necessitate getting back into the working world when jobs are hard to acquire.

Social Security benefits were never designed to be a substitute for a retirement plan – just a short term supplement when life expectancy was much shorter than it is today. 

Because money can be such a huge area of conflict in a marriage I thought it would be wise to emphasize the importance of taking a serious stance on putting away money for the future no matter what age you might be or what your marital status is at the moment.

What I found to work is:

• Create a very conservative spending plan and stick to it. (I use Quicken to help automate the process.)

•  Treat all raises as money that can either reduce debt or increase savings. 

• Maximize all contributions to employer and government sponsored retirement plans to the best of your ability (401K, 403B, IRA, etc). 

• Take a Dave Ramsey or Crown Financial course. 

• Have automatic withdrawals set-up when possible. It often feels painful to write out a check to a retirement account you might not use for 30-40 years. Think about how it would feel if you had to write separate checks for Federal, State, Social Security, Medicare and SDI taxes every paycheck. (Actually, that might be a good thing.) 

• Use financial counselors when needed. 

• Question and resist new technology – it can be very expensive to keep up with all the new available toys. New toys become old toys very rapidly. 

• Talk to your spouse regularly about money and spending and make sure you are on the same page so that one of you doesn’t sabotage your plan. 

• Dump the entitlement mentality. Never use the phrase “I deserve”. The Bible tells us what we deserve – that’s why we need a Savior. 

What is the goal here? It’s so that you can be a help, rather than a hindrance to others.