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| The La La Simple Shawl in rose is almost finished |
I have been hearing recently from dancer friends who are in dire straights in their old age. It is sad and unfortunate. The older we get, the faster time passes. It's so important that we plan for our "golden years" and have our ducks in a row. Professional dancers are particularly vulnerable in retirement if they don't have adequate income, savings, investments, and real estate. Many don't realize that our joints give out after a certain amount of time. Surgery and medical bills can send people into a financial tailspin. Living in an expensive city can also cause stress and worry.
Where you live has a huge effect on how much money you are able to save. I bought the smallest house on my California street, in a working class neighborhood. I canvassed the immediate area, keeping a log of the asking prices of homes, what they sold for, and how long they were on the market. When I found mine, I had a good idea what it should cost. I bought it in 1998 for $89.500, without an agent. That was one of the best financial decisions that I have ever made. My neighbor just sold her little house for $400,000. It's a two bedroom, but mine has more land. She waited a year for the right buyer to meet her asking price. I plan to stay in mine, because I feel it is the perfect retirement home. It's small, comfortable, one story, and close to public transportation.
I started "practicing for retirement" a few years ago. I stick to a budget for the year. I save the flyers and buy the groceries that are on sale. This week that will be pineapples for $2.00, 10 lbs. of potatoes for $1.78, turkey for .35 a lb, navel oranges for .50 a lb, and gelato that is buy one, get one free. Sugar is also on sale very cheaply at our local Mexican market. I make my coffee and tea and home, and I don't eat out at restaurants. I save that money for travel. I also don't have t.v. I use a Jitterbug flip phone. It's $35.00 a month.
Taking the bus and riding my bicycle has helped me to reduce wear and tear on my car, lower my car insurance premiums, and to save money on gasoline. I also combine errands when I drive my car across town once a week. I like to use the car for scenic day trips and to visit my dad. By limiting how often I drive to the grocery store, for errands, etc. I have the miles I need budgeted for my trips. I used to cruise around LA kind of mindlessly when I was young, needing to refill my gas tank twice a week. Now I fill it up once a month. That ten gallons has to last me. Working from home really helps. Are you ready for retirement? How are you preparing?
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Perfect timing for this post, Stephenie. Just today I was thinking about writing a post on the same topic.
ReplyDeleteLike you, I also searched for a long time before buying this house. I too bought it without an agent, and it's close to work. So it's enough to fill up the car once a month. And before paying anything else a portion of my salary goes to retirement accounts automatically.
I want to be mortgage free before I retire, so I save as much as I can.
That's excellent, Nil. The daily habits make such a difference in being able to save money. I'm sure you will pay off your mortgage and own your home free and clear.
DeleteYou have certainly done the right thing Stephenie in "practising" retirement, you are one sensible and organised lady. My husband is older than me and retired from his job a few years ago, we both work from inside the home now buying and selling, but I am fed up with it now to be honest, but we still haven't got enough savings to get out of the rent trap, it will be this time next year before we can stop and live a proper simple life, which I really crave.
ReplyDeleteBest wishes
Marlene.
Rent does eat up a huge amount of income, Marlene. I was fortunate to find a fixer upper in a down market. It sounds like in a year you will have less financial pressure. It's good that you have a plan.
DeleteStephenie, this is such a sensible post. I know I can manage on very little money but see people spending money they can ill afford on things that they really don't need. Far better to save it for a rainy day.
ReplyDeleteHi Cherie, Emergency savings is key. I learned that when I had my hips replaced. Fortunately, I had been extremely frugal for years, so I was able to pay the medical bills and take time to recover. I took the bus for a year, but it was worth it. We need that financial cushion, especially as we get older.
DeleteSuch a great example of preparedness, we planned for our retirement then my husband was forced to leave work early, early retirement, then the company he worked for ( a paper mill ) went bankrupt, it was a financial blow but we managed to recover, we must always think ahead and be prepared, things can take a turn fast! You give great advice! You could teach us all a lesson!
ReplyDeleteThank you, Laurie. I remember watching Suze Orman on Oprah during the recession. She advised people to live on half of what they were spending. I'm glad you and your husband were prepared. We never know what the future holds.
ReplyDeleteThis is a great topic and one of my favorites. Buying and holding on to a home in California is historically a good financial move. Yes, there are ups and downs, but buying an appropriate, affordable home in an area you want to stay in permanently is a safe investment. We kept adding regularly to retirement accounts and saved as much as possible prior to retirement. It is much easier for us because Steve has his military pension which includes Tricare for Life coverage with Medicare. He did earn every penny of these benefits after 24 years of flying fighters and being at sea for 6 to 9 months at a time far from home with the Navy. PS-your shawl is looking wonderful.
ReplyDeleteHi Anita, Starting early and planning ahead makes such a difference. I am happy to hear that this is one of your favorite topics. I find personal finance to be very interesting. I will do more posts on both subjects. Six to nine months away from home is a long time! I bet it's worth it now, though.
DeleteAs you probably know, Stephanie, we have moved from the mountains to the city within this year. We both have been retired for a while and live on a budget. Wish our kids would do the same. I have always tried to conserve everything and would not think of jumping in the car just to run one errand or visit just one store. Ridiculous! We would rather spend our extra money on things we enjoy like new paints or travel than eating out all the time like young people do these days.
ReplyDeleteHi Peace Thyme, Living on a budget and saving gives you the freedom to do the things that you want later in life. When I was young, I used to meet friends for coffee or a meal out all the time. It never dawned on me how much of that money I could be saving. I'm glad that you are enjoying your retirement. Happy travels...
DeleteGreat post! Here in Canada we are encouraged from a young age to contribute to our RRSP's (Registered Retirement Savings Plan). Both dh and I started at 18, so we have that to use at retirement. As well as CPP (Canada Pension Plan) and OAS (Old Age Security). We'll have our savings as well and likely our real estate as this house will be too big then, so we'll sell and downsize. I agree that planning is key but see many who do not. We are thinking about retiring early and starting to put the financial piece in to place, just in case we can.
ReplyDeleteStephanie, have a great weekend! We have snow but it's not too cold yet.
X Chy
Hi Chy, That's excellent that you and your husband started so young. I bet you will be able to retire early, from the sounds of your financial picture. Congratulations.
DeleteGood advice! I think the most important thing is to have a house bought and paid for...once expense done. And now we know that medical benefits are important. Some things can't be helped, such as medical problems and some people have more expenses than others. Moderation in spending is also important and you do that well! Andrea
ReplyDeleteThat's so true, Andrea. I am so relieved that I own my home. Health insurance premiums rise as you get older, so no having to pay rent or a mortgage later in life has helped me to pay those bills. You are so right about moderation in spending. I remember reading a book called, Buy A Modest Car. It was excellent. As you mentioned, most of us will have medical expenses.
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