Over 40 and shattered dreams of financial security

[Anonymous]

There was some mention of this on another thread and it really got to me (since I'm over 40 and fiancially strapped). The poster made some nasty comment that the person must be over 40 and just realizing she won't ever be rich. Ouch. That really hit me. I'm in my late 40s and I always thought that my financial situation would eventually change but that comment got me thinking that it may never change. My lot in life may just be this, what I have now, forever. I never considered that so it struck me. Do you think there is a certain age where you should just give up hope and just settle for the way things are or are dreams necessary in mind-life?

[Anonymous]

Well, I think if you haven't made a lot of money by the time you are 45 you are unlikely to make a lot of money.

[Anonymous]

Really? That sucks.

[Anonymous]

I don't think you need to give up your dreams. I think you need to adapt them to what is achievable and then work on making them concrete. Depending on the exact kind of financial straits you are in, consider completing the first two or three of Dave Ramsey's baby steps, then substitute your own goals going forward from there.

[Anonymous]

I think it may depend on why you haven't made a lot of money yet. Is there a debt you have been aggressively paying off (student loans) to the detriment of savings which is soon to be paid off? Unless you foresee a reason for a financial shift and have a good salary, I don't think it would.

This doesn't mean you can't start to make changes in you financial habits now that won't have a long term financial impact. I'm sure people can chime in about tips for aggressive saving tips.

[Anonymous]

OP, life is all about coming to terms. When we are young our life is before us and the possibilities seems endless -- we can (or at least think we can) be anything we want, marry the perfect person, live in the most beautiful or exciting location, travel to exotic places, etc. As we age we must make choices and each choice means closing the door on other choices that might have taken us in a different direction. Also, we learn that we must face our limitations -- maybe we're very smart but terrible at promoting ourselves at work? Maybe we are have big hearts but allow our decisionmaking to be driven by emotion rather than reason? Whatever. The point is, the world seems as if it's no longer our oyster. This can be depressing.

But here's what I think: it can also be a relief. Who has time to do and be everything in this life? Focus on the things that are most important to you and do after them with all of your might. If that's money, then go for it, but maybe there are other things you value more? Think about it. Money (after a certain point where we have enough for our needs) isn't everything.

[Anonymous]

*go after them.

Sorry for the typo, above.

[Anonymous]

The best aggressive savings tip I know is "only see the money you wish to spend". Pay your coming due bills each payday, even if they're not due until the day before your next direct deposit. Know exactly how much you want to spend on food and other essentials and, then and there on payday, whisk the rest to a savings account. Once that hits $1500-2000 (you can do $1k if you don't own a house or car) stop adding to it and direct all excess cash to debt, again, right on payday so you never see it as spending money.

This where you have to do some math. If your debt is dischargable, unsecured, and too large to clear by retirement, take a good hard look at declaring bankruptcy sooner rather than later. It's not always, or even usually, the best path to take, but too many dismiss it out of hand and cause themselves much unnecessary hardship. Bankruptcy exists for a reason.

Once your unsecured debt is clear, keep living lean and keep putting the extra funds into savings. This is where you build the foundation to live your dreams. Don't waste your assets trying to find fulfillment at Starbucks. Every little bit adds up. Conversely, don't sock it all away in inaccessible retirement accounts if your lifelong goal it to hike to Macchu Picchu.

[Anonymous]

Oh hello there. Almost-40 year old here who has spent her ENTIRE working life in the not-for-profit sector. On purpose. With my eyes open. Here's my one life as annecdote.

The way I have put this to a lot of people is that I hope for a more opaque illusion of security, since on some level it's all anyone can hope for.

So my objectives are a bit different at this point, though I don't think they've really changed all that much over the years: Keep a roof over everyone's head, food in the fridge, and save enough to not eat cat food in my old age. Also, be as effective an agent for positive social change as I can. That's it.

But that's not the same as not having dreams. I dream of going back for more schooling at some point, once my DC has launched. There are concrete goals attached to making that dream happen. I dream of making more art and growing that way fora while. Again, there are concrete goals I can set for that.

I don't think you need to give up dreams, but a reckoning with onseself is never a bad thing.

[Anonymous]

Wait 'til you're 50 and you realize that not only are you never going to have financial security, you're worse off than when you were 40, are significantly worse off than your parents and likely to be even more worse off when you're 60.

[Anonymous]

I am in my mid-50s and my finances have improved significantly since my mid-40s. I worked part-time when my kids were little, so I didn't start working full-time until my late 30s. My career took off after that. My youngest child finished college a couple of years ago and my savings rate has increased significantly since I stopped paying college tuition and I got several promotions/raises. My house will be paid off in another year and I'm contributing the maximum for my age to my retirement accounts each year ($23,000). Once my mortgage is paid off, what was the monthly mortgage payment will go into additional savings. And, my marriage has gotten much better since the kids moved out and we stopped worrying about money.

I'll never be as wealthy as some of the people on this board. I am very happy with my house which would probably sell for $500,000 if I put it on the market today. (A lot of money in some parts of the country but not in the DC area.) I will never be able to buy a decent house in Cleveland Park or Bethesda or McLean, but I don't want that. I am happy knowing that I paid for my kids' education, I will soon have a paid off house, and I should have a secure retirement that may not include flying first class or renting a house in Italy for a month but should enable me to have money for all the necessary expenses plus some extra money for the non-necessities that I want to be part of my retirement.

It helps to live in a "non-fancy" neighborhood. I think it gives a much more realistic basis of comparison for what it means to be financially secure. If we had stretched to buy a house in a fancier neighborhood, not only would we have bigger mortgage payments but we probably would have been embarrassed to drive 10 or 12 year old cars that have a bunch of dings (but are paid for and run fine) or to go out and cut our own lawn. I think the secret to a secure financial future is living below your means and making sure that you are not surrounded by people with lots of money (or lots of debt) who raise unreasonable expectations about how you should live.

[Anonymous]

You've gotten a lot of great advice on this thread already, but I thought I would put in my $.02. My DH and I are in our late 30s and our financial situation is just starting to turn around. We have a great deal of student loan debt and didn't manage our finances as well as we should/could have in our 20s (both before and after we met at 28). Of course we both had very low incomes back then too. We have 4 children and that was our choice. Technically, we couldn't really afford them in the eyes of most DCUMers who frequent this forum (i.e. we are not funding 529s for them and they share bedrooms), but we wanted a medium-large family and only had one decade to do it, so we did it. We are on a slow but steady path to financial security. It will take us the rest of our working years to get there, and we are very far behind many others, but I can't spend a lot of time lamenting that. You still have 20+ years left to build up your savings or pursue whatever other financial goals you have -- that's still a lot of time. Not as much as if you were 25 or 30, but enough that you can make real progress. Just make sure you balance the financial stuff with your other goals, values, and priorities. Not everyone has the same vision of an ideal retirement and that is okay.

[Anonymous]

Happiness and contentment are the greatest forms of wealth. Cheryl Crow says its about wanting what you have, not having what you want. So that's a starting point.

For me I wouldn't be happy without the freedom money provides. If I found myself broke tomorrow and unemployed tomorrow, I'd get a job at McDonalds or Costco and I'd work as many hours possible 365 days a year. I'd become the best hamburger flipper or cashier they'd ever employed. I'd live in a small apartment close to work. I'd pay bills, reestablish my credit rating, and if save some portion of my paycheck every week and even if I were penniless, I'd never stop being a capitalist. For observant people there are opportunities around us all the time.

If you can't make it here, you can't make it anywhere!!!

Ghandi only desired a robe, a bowl, and a spoon. If one can find self-actualization/fulfillment with a robe , bowl, and a spoon those are perfectly valid choices, but my choices would be different.

You have choices to make, but age 40, is far too early to give up on one's dreams. At age 40, I would call that facing the realities of life and giving up one one's dreams, all excuses for having quit trying to succeed while you are still very young.

The possibility of making your dreams come true will only die on the day you quit trying to make them come true.

[Anonymous]

Anonymous wrote:I think it may depend on why you haven't made a lot of money yet. Is there a debt you have been aggressively paying off (student loans) to the detriment of savings which is soon to be paid off? Unless you foresee a reason for a financial shift and have a good salary, I don't think it would.

This doesn't mean you can't start to make changes in you financial habits now that won't have a long term financial impact. I'm sure people can chime in about tips for aggressive saving tips.

+1

[Anonymous]

Anonymous wrote:You've gotten a lot of great advice on this thread already, but I thought I would put in my $.02. My DH and I are in our late 30s and our financial situation is just starting to turn around. We have a great deal of student loan debt and didn't manage our finances as well as we should/could have in our 20s (both before and after we met at 28). Of course we both had very low incomes back then too. We have 4 children and that was our choice. Technically, we couldn't really afford them in the eyes of most DCUMers who frequent this forum (i.e. we are not funding 529s for them and they share bedrooms), but we wanted a medium-large family and only had one decade to do it, so we did it. We are on a slow but steady path to financial security. It will take us the rest of our working years to get there, and we are very far behind many others, but I can't spend a lot of time lamenting that. You still have 20+ years left to build up your savings or pursue whatever other financial goals you have -- that's still a lot of time. Not as much as if you were 25 or 30, but enough that you can make real progress. Just make sure you balance the financial stuff with your other goals, values, and priorities. Not everyone has the same vision of an ideal retirement and that is okay.

This is a great point. For example, we stopped at 2 kids because we selfishly wanted a more comfortable retirement and earlier than would have been possible if we'd had 4 kids. Look at what really constitutes financial security and a good life, financially speaking, to you.