Saturday, January 31, 2009

Taking Care of Ourselves Financially


Let’s talk about money. It’s on everyone’s mind these days. The market is down, we’re in a recession, people are losing their jobs, houses are foreclosing, and we are one-income households. Talk about scary!

All of the above sent me packing to my financial advisor for a meeting yesterday to review my small pittance of a retirement account. Actually, it was my husband’s retirement, half I which I received during the divorce settlement. I’ve buried my head in the sand for the past four months afraid to look at the balance on my variable annuity. In case you don’t know what that is, it’s a pool of money you invest in the market that is suppose to guarantee you a monthly payout when you retire. When I finally opened the darn statement and saw I lost 64% of my retirement, I nearly fainted.

So here I was sitting in the office of my advisor. “So when do you plan on retiring,” he asks me. I look at him thinking you’ve got to be kidding! I shot back with the cold facts I already knew, that I won’t be retiring until I’m 70 or older at this rate, and he agreed. Things look pretty dim. So we did a bit of shifting of funds that might guarantee me a tad bit more than $1,600 per year in benefits. You’re laughing. On this account I’ll get $1,600 per year in benefits, plus my Social Security, if it isn’t bankrupt by the time I live to be 70.

So like any other human being, I drove home in a daze. This is looking pretty bad. All the thoughts of what would I do if I lost my job? Where would I go? Will I end up living in my car? My son can’t take care of me; he’s living at poverty level. My parents are dead and my inheritance spent from 18 months of unemployment. I have no family, except a brother I haven’t seen in 12 years and he lives 2,000 miles away and I wouldn’t have the money to get to him anyway. I’m toast!

Okay, so if the economy gets worse, what am I going to do? Here are the stupid panic thoughts that went through my mind:

  1. I need a “sugar daddy.” That probably won’t work, I can’t find a “salt daddy” and the “sugar daddy” has probably lost everything in the market too.
  2. I need to find an old man to marry that has a good retirement account now and pool my tiny bit of money with his. Might be doable, but I hate grey-haired 70 year olds. (Shudders fly through my body at the thought of my wedding night.)
  3. I stock up on can goods in case I have no money to buy food. Well, actually I’ve been buying a little extra, but I picked up a can I purchased about two years ago and noticed the darn thing had an expiration date! I didn’t know canned goods had expiration dates. If I’m starving, should I risk eating it anyway?
  4. I need to pay off my car in case everything goes belly up and it’s another depression. At least I can sleep there.

Well, after considering the above, I still felt lost. So what’s a single to do? Well, here’s the few things I’m doing. Perhaps I’m over reacting, but hey no one else is going to help me.

  1. I’ve checked out my bank to see how solvent it is. My current savings is in a bank that’s not doing so good and has been given millions by the government in bailout funds, so I’m thinking of shifting the money elsewhere. Bankrate.com has a page where you can check how your bank and credit unions are fairing in this economy. Check it out.

  2. Watch your credit card statements and the interest rates. Why? One of my credit cards shot up from a fixed 6.99% to 14.99% in one month! I have excellent credit, and no late payments. I called to complain and the scoop was that this credit card company was having to borrow more money, and I’m paying for it! Well, after a long discussion, they said that they would lower it back to 6.99%, however, they would not renew my credit card upon expiration. Fine with me! I have plenty others, but I’m going to watch those statements as well.

  3. Shop around for cheap insurance. Another bone I’m picking is car insurance. So this year I ran into a pole cutting a corner too short in order to miss hitting a kid in the parking lot. The front of my car went into the parking stall just fine, but the back of it hit the pole and scraped the back door. So it was $2,200 of damage. Now get this. I haven’t had a moving violation since 1970. I haven’t hit another car since 1985. I haven’t had a car hit me since 1990. I have a stellar driving record, and because I hit a pole, they upped my premium over $462 a year for the next three years. At that rate, after three years of paying higher insurance, I will have paid back into the company $1,300 on a $2,220 claim that I paid a $500 deductible. What the H*L!@. Sorry, why have insurance. I wrote them a letter complaining, and I’m waiting to see if they lower the rate. If not, I’m going shopping.

  4. Spend less. Boy, that bagel I buy for $2.00 every morning sure tastes good at my desk with my cream cheese and coffee. Of course, you’ve heard of the latte factor. I spend $10 a week on a bagel and $40 a month. Suddenly my bowl of Cheerios looks more appealing and cheaper. How about lunch? Do you pay $5.00 a day for lunch at work? $25 a week, $100 a month. It adds up.
Here are some things I do to save money:
  • Cut out the lattes and morning bagels; eat at home.
  • Bring your lunch. I only treat myself on paydays for lunch out.
  • Shop close to home and drive less. I live 3.8 miles from work, and if I really try hard, I can make a tank of gas last me 3-1/2 weeks, just because I stopped driving around everywhere!
  • Check the rates on your credit cards, and shop for lower rates.
  • Shop for cheaper insurance.
  • Shop at cheaper grocery outlets. When items you regularly use or eat are on sale, buy more than one at the lower price.
  • Find good clothing resale shops. I’ve found one for women and it’s terrific!
  • Skip the movies and wait for DVD’s. Actually, my video store is charging me $4.99 to rent a DVD, and for $2.99 I can watch it on Amazon.com. They have tons of on-demand DVD’s.
  • Live on the basic TV channels. Hey, I’ve had the $10.04 per month TV plan for years, and I don’t miss having 100 channels I never watch. If you really miss some great TV show on Showtime you have to see, rent the season on DVD! I did for The Tutors and it worked for me. I’m not paying $50 a month to watch the tube that sits turned off the majority of the day.
  • Try to save money. Even if it's a pittance of $10 a week. What you save by cutting back above can be put in savings for a rainy day. How much better is that?
These are just a few ideas, and if you really want to cut back, I bet you can think of more.

This post is a bit long, I know, but I had a lot to say. If I’m concerned as a single about taking care of myself in the future, I am sure you are too. It’s no secret we are one, not two. And you may be a single parent of one, plus children. I feel for you.

Hang in there. We’re all in this together, and if anybody has some great thoughts on how to save more, pass them along! The more the merrier.

Just Another Single Like You


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