I'm a barely a boomer with a 33 year first marriage and separate money from day 1. We are both children of divorce though my parents held it together (barely) until I was married. My parents fought about money a lot. Dad was super cheap and Mom was a bit more spendy. My husband was super cheap and I was a bit more spendy. I didn't want to see my marriage play out as my parents did so we decided on separate money from day 1. Pro's - We never fight about money. As a CPA, I wanted to be in control of my money, my budget and my investments. I have a greater sense of accomplishment over my wealth than I would if it were shared. I'm an invest and let it ride girl, he's a market timing guy (queue the sad music). I would have lost my mind if he were investing my/our money. A gift is really a gift. I don't shop often but when I do I can spend a lot - he's as excited to see my purchases as I was buying them. Con's - The bookkeeping side can be a pain but we both have accounting degrees so we're used to pesky financial stuff. We both ended up working longer because we each have contingencies for our contingencies. With one pot of money, I think we would have been comfortable retiring even earlier. Caveats - This doesn't mean you don't have to talk about your money and goals that involve finances. We talk about money a lot. Separate finances would not work if one partner was a saver and the other was a spendthrift. At some point, both partners need to retire so you both need to be working towards that goal. A huge disparity in income or the work done within the home would make it difficult to come up with an expense sharing method that seemed fair. Personal finance is personal, we each need to come up with methods that work for our partnership.
This is such a great list - thank you! I carry an ATM card that refunds all ATM fees and has no foreign transaction fees from Charles Schwab. I have a locked note in my Iphone with images of my passport, driver's license, credit cards (front & back), birth certificate, social security card, license plate, vaccination card, health insurance card and vehicle registration. It requires facial id to open so it seems secure. I'd like to hear your thoughts.
Dick, I normally find your articles to be super helpful. I think this one is too simplistic for the typical humbledollar reader. I retired in 2016 at 51. During my last full year of work, I spent only 27% of my take home pay (from my job, not including investment returns). I had no debt and was uber focused on retiring so few expenses seemed worthwhile if they delayed my retirement date. Had I needed to recreate the income from my job, I would still be working. I created a detailed spreadsheet which showed my expected expenses over my remaining years. Some expenses went up (goodbye company car and good health insurance) while others went down (goodbye high tax bracket, convenience foods and work clothes). My spreadsheet has expenses grow at a higher rate than I expect Social Security to grow, variable investment returns and provisions for infrequent but large purchases like car replacements. Each year, I compare my actual income, investment returns and spending to this plan to make sure I'm still on track. Without those details as well as fallback plans for my fallback plans, it would have been really difficult to quit my job. I've now worked with several friends who are nearing retirement age and they, universally, have a lot of anxiety about whether they have enough. Even when their financial advisor tells them they are good; even when they know they have millions coming in inheritance as well as millions invested, there is anxiety. The only way I know to alleviate that anxiety is to lay out the details, stress test the investment returns and build in contingencies. So my husband and I build them a spreadsheet, show them how to populate and stress test it. For those of us without pensions and with no guarantee of fully funded Social Security, I think we need more details to make sure we're truly ready to retire.
"I’ve come to see not thinking about money as perhaps the greatest luxury that money can buy." Mic dropI just had this thought yesterday at the grocery store. Saving and sacrifices made in my 20's - 40's were truly the best gift I could have given myself. Not worrying about the rising price of everything is priceless.
Comments
I'm a barely a boomer with a 33 year first marriage and separate money from day 1. We are both children of divorce though my parents held it together (barely) until I was married. My parents fought about money a lot. Dad was super cheap and Mom was a bit more spendy. My husband was super cheap and I was a bit more spendy. I didn't want to see my marriage play out as my parents did so we decided on separate money from day 1. Pro's - We never fight about money. As a CPA, I wanted to be in control of my money, my budget and my investments. I have a greater sense of accomplishment over my wealth than I would if it were shared. I'm an invest and let it ride girl, he's a market timing guy (queue the sad music). I would have lost my mind if he were investing my/our money. A gift is really a gift. I don't shop often but when I do I can spend a lot - he's as excited to see my purchases as I was buying them. Con's - The bookkeeping side can be a pain but we both have accounting degrees so we're used to pesky financial stuff. We both ended up working longer because we each have contingencies for our contingencies. With one pot of money, I think we would have been comfortable retiring even earlier. Caveats - This doesn't mean you don't have to talk about your money and goals that involve finances. We talk about money a lot. Separate finances would not work if one partner was a saver and the other was a spendthrift. At some point, both partners need to retire so you both need to be working towards that goal. A huge disparity in income or the work done within the home would make it difficult to come up with an expense sharing method that seemed fair. Personal finance is personal, we each need to come up with methods that work for our partnership.
Post: Separate Ways
Link to comment from August 24, 2022
This is such a great list - thank you! I carry an ATM card that refunds all ATM fees and has no foreign transaction fees from Charles Schwab. I have a locked note in my Iphone with images of my passport, driver's license, credit cards (front & back), birth certificate, social security card, license plate, vaccination card, health insurance card and vehicle registration. It requires facial id to open so it seems secure. I'd like to hear your thoughts.
Post: Tips for Safe Travel
Link to comment from August 24, 2022
Dick, I normally find your articles to be super helpful. I think this one is too simplistic for the typical humbledollar reader. I retired in 2016 at 51. During my last full year of work, I spent only 27% of my take home pay (from my job, not including investment returns). I had no debt and was uber focused on retiring so few expenses seemed worthwhile if they delayed my retirement date. Had I needed to recreate the income from my job, I would still be working. I created a detailed spreadsheet which showed my expected expenses over my remaining years. Some expenses went up (goodbye company car and good health insurance) while others went down (goodbye high tax bracket, convenience foods and work clothes). My spreadsheet has expenses grow at a higher rate than I expect Social Security to grow, variable investment returns and provisions for infrequent but large purchases like car replacements. Each year, I compare my actual income, investment returns and spending to this plan to make sure I'm still on track. Without those details as well as fallback plans for my fallback plans, it would have been really difficult to quit my job. I've now worked with several friends who are nearing retirement age and they, universally, have a lot of anxiety about whether they have enough. Even when their financial advisor tells them they are good; even when they know they have millions coming in inheritance as well as millions invested, there is anxiety. The only way I know to alleviate that anxiety is to lay out the details, stress test the investment returns and build in contingencies. So my husband and I build them a spreadsheet, show them how to populate and stress test it. For those of us without pensions and with no guarantee of fully funded Social Security, I think we need more details to make sure we're truly ready to retire.
Post: Retirement Riddles
Link to comment from August 3, 2022
"I’ve come to see not thinking about money as perhaps the greatest luxury that money can buy." Mic drop I just had this thought yesterday at the grocery store. Saving and sacrifices made in my 20's - 40's were truly the best gift I could have given myself. Not worrying about the rising price of everything is priceless.
Post: Now and Then
Link to comment from July 30, 2022