Can Helping Your Kids Hurt?

I recently saw a Pew Research study on financial independence among young adults. The study found six in ten parents of people aged 18 to 29 had provided at least some financial help to their children. In many cases the support was for regular monthly bills like groceries, rent or car insurance.

Of course if your young person is not working, they may need that support. But how long is it reasonable to continue to support your kids if they are not actively seeking an education and are working full time. It’s a question every parent has to answer for themselves. But it is important to understand whether you are setting your kids up for financial failure.

In one of my favorite books, The Millionaire Next Door, Thomas J. Stanley and William D. Danko, contend that it’s easy for a financial boost for your kids to become financial enabling. The support you provide increases their ability to spend on things they otherwise could not afford. With high rents and big student loan bills, life can be financially difficult for those just starting out, and it can be hard to know where to draw the line.

I did not draw the line in the right place. Last May, I wrote about how my daughter financially crashed and burned in How to Go From Happy to Desperate in Six Weeks or Less. Following the crash, to help her get back on her feet, she was living with us. Her budget was meant to be similar to what she would have to pay if she were living on her own with a roommate in our area. She gave us money for her non-discretionary expenses, like rent, utilities, groceries, car insurance, etc. We put it in savings for her. What was left had to cover everything else.

Except her medical costs. She doesn’t make much money. She has a government job with great health benefits but pretty low pay. I didn’t want her to skip getting the care she needed because she couldn’t afford her out-of-pocket expenses. So we agreed that we would pay for her medical expenses, and she didn’t need to include those in her budget.

Toward the end of that year, she had some tests done, and the medical bills came to around $500. No big deal for us, and we were happy she was getting help. She was actually doing really well with her budget. She was covering her “pretend” bills, and saving money beyond the money she was giving us. She had really embraced the idea of assigning a job for every dollar she had.

The problem was, she was assigning money that should have been earmarked for medical expenses, had we not been paying them, to pay for a tatoo. While we laid out $500 for her medical bills, she spent $500 on said tatoo. It was totally my fault. She had saved for it. She didn’t have to spend the money on anything else. But it bugged the heck out of me.

We made it possible for her to pay for a tatoo, because we were paying for an expense that was legitimately a part of her cost of living. And that is where the flaw in providing support to your kids lies. It masks their true cost of living, and as a result, they make decisions based on the inaccurate picture.

I want Kaye to understand her cost of living. She will make long ranging decisions such as where to live, whether to go back to school or change careers based on what she thinks she can afford, and I want her to make those decisions with all the clear-eyed facts.

Today, Kaye covers all of her expenses on her own. She includes saving for out-of-pocket medical costs in her monthly budget. Similarly she sets aside money for car maintenance and repairs. Of course we will help if something big and devastating comes up. But she is fully living within her means and saving for her needs as well as her wants – including her next tatoo.

Photo by Cory Woodward on Unsplash

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For a comprehensive, step-by-step guide to building your own financial plan, pick up my award winning book, Save Yourself; Your Guide to Saving for Retirement and Building Financial Security.  It is available on Amazon.

Nothing Happens Without a Plan

October is Financial Planning Month. Of course it’s also Adopt a Shelter Dog Month, Breast Cancer Awareness Month, Global Diversity Awareness Month, National Bullying Prevention Month, and about ten other awareness, appreciation and support worthy causes month. But since Financial Planning is in there, there is no time like the present to do something important for you.

Rarely anything happens without a plan. Even your daily to-do list is essentially a plan. If something isn’t on that list, the chances of it getting done go down dramatically. So your financial security certainly isn’t going to happen without your attention. It won’t happen when you get a raise. It won’t happen when the kids are out of day care or college. It simply won’t happen unless you make a plan to make it happen.

Recently I’ve been speaking with a few couples who have just gotten started on their plan. They are in their sixties. They have saved a bit along the way, because they knew they were supposed to, but they haven’t followed a plan. As a result, they had not saved enough to support their lifestyles after they leave work. And in all cases, they are mentally ready to leave work.

Fortunately, because they have saved some, and they have equity in their homes, they are still going to be able to support themselves. But their lack of planning earlier means they will have to make significant changes to their lifestyle, even if they plan to work until they are in their seventies.

Now of course, if you are not currently saving, or saving enough, saving more will require a change in your lifestyle, even if it’s only being more conscientious with how you spend. It’s never too late, but the sooner you start the less dramatic and painful those changes will be.

The start of any plan is a goal. Some goals are far away and as hard to imagine as they are easy to put off. Typical savings metrics are uninspiring. You need three months of expenses in an emergency fund. You need 25 times your income in savings before you can retire. Both of these are daunting and unimaginable.

Savings goals aren’t actually about the money, but rather what you want to do with the money. So rather than save an emergency fund, a better stated goal would be to protect yourself from a financial setback, such as a job loss. Rather than saving for retirement, save for the freedom to choose whether to work and who to work for.

The next piece of a good plan is to define your goal, and this is where the money comes in. Your goal isn’t about the money, but it does have a price tag. If you find saving hard, simply start with a dollar figure you can live with. However ultimately you will want specific targets, especially for your long-term goals. And you’ll want to break those goals down into shorter more manageable targets, like how much you want to save this year, in the next three years, and so on. The rules of thumb can be a good place to start, but you know your circumstances, so make your own targets. For some free calculators to help you get started, check out my resource page.

With your goal defined, you can develop your strategy. Be very specific. Decide exactly what you will change on a daily, weekly and monthly basis in order to achieve your goal. Think about what might go wrong and how you will adapt, and if you can’t do all you want to now, think about how you can do more later. If you have a significant other, you have to work together on this. It will be hard to make progress if you both aren’t all in. Decide together on your goals and your strategy, and hold each other accountable.

I try to limit promotion of my book, Save Yourself, to the footer of my blog, but given the topic I’ll make an exception. My book provides a step by step guide to creating your own financial plan from developing goals and defining them to creating a strategy to achieve them. The final chapter walks through the development of a real couple’s financial plan. There are worksheets and references to calculators throughout. It’s available on Amazon and

I hope you’ll take some time during Financial Planning Month to get started on your own path to creating your plan. Nothing happens without a plan, and that goes for your financial security too.

Photo by Ben Regali on Unsplash

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For a comprehensive, step-by-step guide to building your own financial plan, pick up my award winning book, Save Yourself; Your Guide to Saving for Retirement and Building Financial Security.  It is available on Amazon.

Talking Paying for College

With school having just started, many homes with teenagers are starting to get serious about preparing for college. Some seniors will be taking early acceptance by November, while juniors are mulling their options. So it’s time to get real with your kids about how you’ll pay for college.

You want the world to be your child’s oyster, and no one wants to talk about expenses when dreaming about the future. College is expensive no matter where your child chooses to go, but some choices will set you back farther than others. The following chart shows the average cost of college for the 2017-2018 school year from the College Board.

While most parents want to send there children to college, only about 57 percent of them save for it. The average household savings for college was only $18,135, according to Sallie Mae. That won’t even cover a single year at a four year school. So, that means the money must come from somewhere else. The following chart shows how America pays for college, also from Sallie Mae.

A full 27 percent of the cost of college will be paid for with loans. The average student loan debt per borrower from the class of 2017 was $28,650. At the current Federal Direct unsubsidized student loan interest rate of 4.53% for undergraduates, over the standard 10 year repayment period, payments on loans of that amount will be about $297 per month.

That can be a significant piece of a new graduate’s entry level job income. It’s no wonder that 30 percent of college graduates with student debt move back in with their parents. With money like this on the line, it is important to sit down with your future college student and cover the facts.

Here are five things to discuss with your child before she chooses a school.

  • Tell your student how much you will be able to pay. This includes what you have saved and what you are willing to commit to out of your income. The converse of this is how much should she expect to pay.
  • Outline options for raising the extra money. In addition to student loans and scholarships, your student may be able to raise some money through part-time or full-time work. Taking a gap year to work and save up for school is a reasonable approach.
  • Help your student understand the implications of their choices. Private and out-of-state public four year schools cost nearly twice as much as in-state public institutions. Student loans may be hard to avoid, but they can certainly be minimized if you understand your trade-offs. You can calculate the monthly payments given different loan amounts on the Federal Student Aid web site.
  • Provide context for the information. Estimate the kind of monthly salary your student might earn given her career interests. Payscale’s College Salary Report is a good place to start. It wouldn’t hurt to also talk about average living expenses. Nerd Wallet has a cost of living calculator. Don’t forget to show the impact of taxes. How much of her take home pay will be left after student loan payments?
  • Consider starting school at a community college. The average cost per year at public two year colleges is only $3,570 assuming your student can stay at home while she attends.

If you don’t have enough saved to pay for college, think carefully about the impact of paying for school out of your current income. It can put you behind in your efforts to save for your own future. And avoid taking on your own debt to pay for college for the same reason. If you are behind in saving for your own retirement, paying for college should not be your top priority. Your child has time to recover from the expenses of school. You do not.

A college education can substantially improve your child’s ability to earn a living. But taking on a lot of debt to pay for it can weaken her financial stability. Help her understand that her choices have implications for her lifestyle after school. Before she makes her final decision, she should know what she’s in for.

Photo by Tim Gouw on Unsplash

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For a comprehensive, step-by-step guide to building your own financial plan, pick up my award winning book, Save Yourself; Your Guide to Saving for Retirement and Building Financial Security.  It is available on Amazon.

Don’t Touch That

I’ve recently had a revelation. It started with my quest to make the perfect pizza dough. Then I realized, looking back, some of my more successful efforts were the result of the same idea. Things turn out better if I leave them alone.

It took many attempts to make pizza dough from scratch. The first several batches could be considered weapons. They were so hard, their only possible use was to hurt someone. I tried the cold rise, the warm rise, the overnight in the fridge rise. Finally I just used my bread maker. Low and behold, the dough was perfect. All it took was me not touching it. Apparently I had been overworking the dough.

I make a mean Thanksgiving turkey too. The secret of my success? I leave it alone. I don’t baste it. I put it in the oven, and only open the door to take the foil cover off so it can brown. The bird is juicy and perfectly done in less time. That is because I’m not constantly letting all the heat out of the oven.

I have to say my investment strategy is and always has run along the same lines. I generally leave my investments alone. Since I started saving for retirement, right out of college, the bulk of my money was invested in a single mutual fund, the Vanguard Life Strategy Growth fund. Target date funds didn’t exist at the time, or I probably would have started with one of those.

Since we were saving for an early retirement, we needed to save outside our retirement plans, so about half of our savings was taxable. As we got older, our investment strategy needed to get more conservative. But I didn’t want to pay capital gains tax on my Life Strategy investment. So I solved the problem by gradually buying bonds and bond exchange traded funds with my savings contributions. No selling, no trading, only buying.

Now that I’m retired, it hasn’t changed much. We still have the Life Strategy Growth fund and the bonds. Each year some of the bonds mature to provide for our spending money during that year. At the beginning of each year, I rebalance between the Life Strategy Growth fund and my bond holdings. And that is the extent of my investment management strategy. Like the pizza and the turkey, the secret to my investment success is leaving my investments alone.

Could I have had better results if I had been more active. It’s not likely. In fact it’s far more likely that my results would have been worse. The average actively managed investment strategy does not produce better results than a buy-and-hold index investment strategy. Though active investment managers will tell you their strategy is the one that does.

If you are wondering how to invest your retirement savings, find a strategy that you don’t have to put much thought into. A target date retirement fund is a perfect solution. You can spend your energy saving for retirement and your investments will do much better if you leave them alone.

Photo by Nadya Spetnitskaya on Unsplash

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For a comprehensive, step-by-step guide to building your own financial plan, pick up my award winning book, Save Yourself; Your Guide to Saving for Retirement and Building Financial Security.  It is available on Amazon.

Time to Retire Retirement and Bring Out Financial Freedom

These days, it’s easy to find advice that says you should never retire. There is evidence that maintaining some structure and the social network that work provides is good for your physical, mental and financial health. And there is nothing wrong with putting a positive spin on the necessity that far too many face; the need to keep working to pay the bills well beyond the normal retirement age.

Unfortunately, this line of thought is being used to justify not saving for retirement. That is a mistake. Even if you love your job, there is a good chance that you won’t be able to do it forever. The older you get, the more health issues can sabotage your plans, whether the issues are your own or a loved one’s. Older workers face higher unemployment, and it’s more difficult to get a job after the age of fifty-five.

But while you are young, and have the time to save for retirement, these eventualities seem remote and certainly not your own. So it may be a good time to start thinking about your life beyond work in different terms. While retirement conjures visions of white haired people playing endless golf and gardening, having enough money to be able live without a paycheck has a much more important benefit – financial freedom.

That is why I left work at the age of 51. My husband and I had saved enough money to support our lifestyle for the rest of our lives. He had retired the previous year. We didn’t need to work for pay anymore. While I liked my work, which was challenging, I had become tired of catering to other people’s demands. I figured if I didn’t like retirement, I could always go back to work. Because we had saved, we had choices.

I have never looked back. Since leaving work, my husband and I have done the things that are important to us. I began this blog and wrote a book to help others learn how to save and invest for their own financial security and retirement (you can find it on Amazon). I’ve personally helped dozens plan for their retirement and get their financial houses in order, all for free, because I think its important and I like doing the work.

I also serve on the boards of a few non-profits where I do volunteer bookkeeping and offer my expertise. That includes the non-profit my husband started to coordinate services to low income and homeless individuals and families. He is building a mobile shower unit to serve the homeless in our county. You can read about the project here. The proceeds from my book have gone to fund this effort.

So, as you can see, our time is filled with activities that have meaning and that we value. The money we saved for retirement gave us financial freedom to do what is important to us. It gave us the power to choose what we do with our days, and the freedom from fear of losing a job.

What would you do, if it didn’t matter whether you brought home a paycheck? Start a business? Create art? Help a family member or neighbor in need? Leave me a comment if you’re willing to share. You may not know right now what you would do with your financial freedom. But wouldn’t it be nice to have choices?

Maybe it’s time to retire the word “retirement” and replace it with financial freedom, as in, “I’m saving for my financial freedom.” That might just be motivating enough to get you to start working toward it today.

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For a comprehensive, step-by-step guide to building your own financial plan, pick up my award winning book, Save Yourself; Your Guide to Saving for Retirement and Building Financial Security.  It is available on Amazon.

There is No Stock in Money Market Funds

Recently, I’ve recommended a money market mutual fund to a few friends who had money sitting idly in bank savings accounts. I knew they needed to keep the money safe, but it could still be earning some interest. So, I was surprised to hear from a couple of them last week as the stock market was gyrating.

Both were concerned that their savings could be in jeopardy, though neither had seen any changes in their account values. So, I knew I had not done a very good job of helping them understand where they had put their money.

Money market mutual funds are a safe place to put money that you need to be there under any circumstances. They are perfect for holding money you are saving for an emergency or a big ticket purchase. They are an alternative to high yield savings accounts, which have gotten a lot of press lately.

My friends’ confusion may have come from the idea that money market funds are mutual funds. Mutual funds can invest in any kind of asset. True, about half of all the money invested by mutual funds is invested in stocks, but there are funds that invest in all sorts of things other than stocks.

Money market mutual funds do not invest in stocks at all. There are strict regulations regarding what a money market fund can hold and still be classified as a money market fund. These funds only invest in high-quality short-term debt instruments. In fact, they cannot invest in anything that will pay off in more than 13 months, and the average time to pay off of all their holdings must be 60 days or less.

These debt instruments range from Treasury bills, which are the short-term debt of the U.S. Government, to short-term loans to well heeled private companies. The interest earned by these instruments are the source of income on the money market fund. The income is usually paid out monthly in the form of a dividend to the fund shareholders.

Money market funds usually offer higher returns than a savings account, and recently some funds’ yields have surpassed even high yield savings account yields. Money market funds can be easier to deal with than a high yield savings account, where you may find restrictions on the number of withdrawals you can make in a given month.

The big difference is that money market funds are not insured. A savings account at a bank, even a high yield savings account at an on-line bank, is FDIC insured up to $250,000. If your bank goes out of business, you will get your balance up to that amount back from the Government.

Money market funds rely on diversification, high credit quality and short-term exposures to maintain their steady $1 per share value. They offer no guarantee, yet they have been consistently successful at managing their risk. Since their introduction in the 1970s, only two funds have had their share values drop below $1; one in 1994 due to large holdings in unconventional investments and one in 2008 due to a large holding of Lehman Brothers debt.

While a loss is theoretically possible, money market funds have historically been and continue to be a safe alternative to bank savings accounts. They offer an opportunity to earn a bit of better return on your money without giving up flexibility. The value of your investment there will not be impacted by anything that happens in the stock market. So you can rest assured your money will be there when you need it.

Photo by Alexandra Gorn on Unsplash

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For a comprehensive, step-by-step guide to building your own financial plan, pick up my award winning book, Save Yourself; Your Guide to Saving for Retirement and Building Financial Security.  It is available on Amazon.

Three Simple Truths About Investing

If you are saving for retirement, or any other long-term goal, how you invest your money is an important piece of achieving that goal. Many of the folks I’ve spoken with are not investing their savings well, or even at all, meaning they may be earning interest but little else. Some even say they haven’t been saving because they don’t know how to invest their money.

I get it. The vast majority of people have no education in investing, and, while there is lots of information about it on the internet, it is really hard to know what to trust. Advice and information can be conflicting. If the bulk of your savings is in your retirement account, it can be hard to get help from an adviser, who generally will require a large minimum investment amount to take you on as a client.

But while the thought of risking your hard fought savings in any investment can give you a case of anxiety, here are three truths to keep in mind that can help calm your nerves.

  1. You don’t have to get everything, or even anything perfectly right. Good is really good enough, and frankly there isn’t any strategy that is perfect. The investment market values are the culmination of every investor’s opinion about what will happen in the future, and no one actually knows that. Successful investors hold a variety of investments knowing some will be better than others, but not knowing which is which over any short time frame.
  2. Timing is nothing. The perfect time to invest your long term savings is today. No it doesn’t matter if the market is overvalued, interest rates are too low, or if a recession is on the way. First there is no sure way to know that any of this is true. And second, it won’t be the last investment you make. You’ll be saving for a long time, and you’ll be investing in all types of markets. Third, ten, fifteen or twenty years from now there is a high probability your investments will be worth more than they are now. Time is on your side, and the market has never failed to recover from a downturn.
  3. Keep it simple. There are many low cost perfectly good ways to have your money invested for you. In your company sponsored retirement plan, you likely have the option to invest in a target date retirement fund or a managed account. If so, choose the option that fits with the time you have remaining before you retire. You can safely put all of your money in that investment. It is completely diversified and will adjust so that it continues to be an appropriate investment for your age. You can find similar options for your individual retirement account. Vanguard, Fidelity and T. Rowe Price all offer reasonably priced target date retirement funds. Betterment and Wealthfront, as well as others, offer low cost managed solutions for your IRA or taxable savings. Many state 529 plans also offer age based investment options for your college savings.

Investing your savings well is important to helping you reach your savings goals, but that doesn’t mean it has to be hard or scary. Choose an off-the-shelf investment option that will remain appropriate for your age throughout your career and don’t worry about what the market is doing on any particular day, week, month or even year.

Confessions of a Super Saver, aka So Tight I Squeak

In the last year, my husband, Jeff, and I have been attempting to be a one car family. At first it wasn’t even real, since one of our neighbors snowbirds in Palm Desert and asked us to drive his Portland car. But now it is, and I find myself wrestling with transportation decisions when I really shouldn’t. It is a great illustration of how our minds can get in our way, whether it’s with spending or saving money.

First, why are we doing this? Now that I don’t work, I barely drive. Most of my social and volunteer activities are in down town Portland, and I live less than half a mile from a light rail station. When I go down town, I much prefer to take the train, because I may, in fact, be the world’s worst parallel parker. The rec center where I work out is a block away. When we had two cars, I only used mine once a week, if that. For the first couple of years of retirement, aside from road trips, I probably only drove 1,000 miles a year, and many of those I could have walked.

So having a second car was a waste, and it really wasn’t good for the car, which needs to be driven to keep working well. We are literally saving thousands a year by owning only one car. The average cost to own a car is over $9,000 a year.

For that money, I could take a Lyft or Uber every day. I can use the train all day every day for nearly five years. Yet I hesitate. If I want to go to a place where I can’t walk or easily take public transit, I tend to assign the cost of a Lyft to my activity, and mull over whether the activity is really worth it.

This is not because money is tight. We have plenty of money to do whatever we want. It’s because I am habitually and detrimentally frugal (some would say cheap). Mulling the value I get for the money I spend is so deeply ingrained in the way I think that it gets in my way.

So that is my confession. I’ve read that every strength, taken to an extreme, becomes a weakness, and this is one that has for me. What I really should be thinking about when I call that Lyft is how much fun I’m going to have, or how much good I’m going to do if I’m volunteering. I shouldn’t be thinking about money at all, because I’ve already figured out that I’m saving a ton by not owning a second car.

This is how our brains work. We are naturally irrational. We focus on the thing that is in front of us, and it takes effort to see the big, long-term picture. Whether we’re a saver or a spender, it is this short-term focus that works to our detriment.

It helps to verbalize what you are trying to accomplish. If you need to save money, talk about what you are saving for with your partner or a friend. Write it down in a journal or wherever you keep your budget. Revisit it regularly and mark your progress. If you are holding too tight to your money, like me, turn your attention to and talk about all that you have accomplished, and take joy and comfort in knowing you are on track.

Photo by Thought Catalog on Unsplash

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For a comprehensive, step-by-step guide to building your own financial plan, pick up my award winning book, Save Yourself; Your Guide to Saving for Retirement and Building Financial Security.  It is available on Amazon.

Going Green and Saving Green

They were lined up on my counter top like a small cityscape. Drops of water ran down their sides as if the city had been hit by the largest rain ever. A friend, who had just popped over, saw them and exclaimed “is there some kind of shortage of freezer bags going on!”

Yes, we reuse our freezer bags. We may in fact be the only ones who do this. If you do this too, please leave a comment so I know we’re not alone. We recently visited two sets of friends, one in Utah and one in California. As I was helping with the dishes, I naturally washed the used freezer bags. My friends both questioned why I would do such a thing.

My husband and I have always reused our freezer bags. They are plastic, and therefore will live on nearly forever in our world’s ever growing heaps of trash. If we reuse ours, there will be fewer in the landfill.

As a side benefit we also save money. We use our freezer bags anywhere from three to ten times. So that is a third to a tenth of the money we would have spent and the same reduction of plastic in the landfill.

We also only use freezer bags for some things. We try our best to mostly use storage containers. Those can last a very long time. Longer than you might think if you use duct tape when the lids crack (just kidding). You only have to buy them once every few years.

Now, of course, lowering these small expenses will not lead to an early retirement. But it can be part of a habit that can lead to more savings, less debt and smaller landfills.

If what you put in the trash looked like money, you wouldn’t throw it away. I’ll wager, you’ve never thrown a dime in the trash. A freezer bag doesn’t look like a dime, but that is what it cost. And it can be reused, just like the dime. We’re far from perfect. We have our fair share of waste, and poor purchases. But avoiding waste is always at the back of my mind.

Try this experiment. For a day, before you throw something away, think of how much it cost. Some things have to be thrown out. There is no other use for them. But some things could have gone to a better use. Spoiled food could have been eaten before it turned, saving you money. Some things could be reused or donated rather than thrown away. If you think of your trash as money, is less of it trash?

In our consumer culture, we buy more than we need. The costs are hidden. We don’t take into account how a few dimes here and a few dollars there add up. It’s easy to throw something that didn’t cost much away. But everything you put in the trash started with money coming out of your pocket. Being more mindful of the ultimate demise of what you buy could help you save both your financial future and the planet.

Photo by Paweł Czerwiński on Unsplash

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For a comprehensive, step-by-step guide to building your own financial plan, pick up my award winning book, Save Yourself; Your Guide to Saving for Retirement and Building Financial Security.  It is available on Amazon.

Doomsday Believers Still Need to Save

I recently spoke with a young woman who questioned whether saving for retirement was really a good use of your money. Her concern was that climate change would end life as we know it, and as a result, there was no point.

Impending doom has always been used as a reason to not save. The threats of nuclear war, a chemical weapons attack, or the spread of a mutant virus can make you wonder whether there actually will be a future. But climate change seems to me to be weak excuse.

With climate change, the demise of our planet is slow moving. Severe weather, new crop diseases, the loss of natural animal and plant life, and rising sea levels are all serious threats. But they won’t end the human race very quickly.

What they will do is make things much more expensive. Food will be more expensive to produce. We may face greater risks to our health and, therefore, higher medical bills. As we try to minimize the damage, taxes may increase. All this adds up to needing more money in savings when we can’t work for pay anymore. Not less.

Doomsday scenarios are not a good excuse to give up on saving money. Sure, something really bad could happen. There are no guarantees in life. But it’s far more likely that you will live to a ripe old age. The real disaster would be for you to spend those years in utter poverty because you didn’t have any savings.

The most recent life expectancy table from the Social Security Administration is revealing. The following table shows how much longer you are likely to live at different ages.

AgeRemaining Years
for Men
Age Remaining Years
for Women

As you can see, there is a good chance you will live a long time beyond the normal retirement age. Some estimates put the number of people living to the age of 100 in the United States by 2050 at 1 million. To support yourself for such a long time, you will need to have saved $100,000 for every $333 you spend in a month.

Yes, the future is uncertain. The political tensions in the world and the growing consequences of climate change should have us all worried. But the answer does not lie in spending all your money now. The one thing that is completely within your control is how you prepare for a likely long life. No matter what happens, you will never regret saving money for your future.

Photo by Josep Castells on Unsplash

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For a comprehensive, step-by-step guide to building your own financial plan, pick up my award winning book, Save Yourself; Your Guide to Saving for Retirement and Building Financial Security.  It is available on Amazon.

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