This column will wrap up our aging issues discussion, but only for now. I will work in more of these issues in future columns, because they really are important. As the baby boomer generation continues to retire and live longer, it faces new financial challenges that prior generations did not.
This will be the last column to run before many of the holidays begin. I know that by now you have been exposed to “control your spending and stay out of debt” advice that you always see and hear at this time of the year. This column has covered it in the past – have a budget and stick to it; leave the credit cards at home and use cash; and if you do use cards, and purchase more than you can pay off in January, have a plan to pay the balance off within a few months at most. That plan must include charging less until you accomplish that. Also, make lists and check out prices online before you go into a store, and don’t buy anything not on the list, or, if you do, cross something else off.
However, in my opinion, the best advice at this time of the year is to start planning now for next year’s holidays. After all, you know they are coming. They do every year, like clockwork.
Build a budget for next year, in part based upon this year – gifts, entertainment and travel, plus anything you know will increase your costs next year. Put away one tenth of that budget each month, from January to October. Shop all year for bargains, and if you wish, you can reduce the amount you are saving each month by finding those bargains early. Planning, saving and early shopping for bargains can make the holidays a lot less stressful and more fun.
One of the issues I raise with students in my CARE presentations is the effects of advances in technology on jobs, opportunities and the overall economy. I am not an economist, but clearly some advances in technology, like the Amazon no-line grocery that we have heard and read so much about, will clearly negatively affect some jobs. However, if you read enough reports and papers, it may in the long run be good for the overall economy.
It seems to me that the key for individuals is, if you can, try to stay on the right side of the advances by anticipating the future in your industry or career. For the overall economy, the key for all of us will be to retrain those negatively affected by the advances.
Wrapping up our discussions, for now, on financial issues as we grow older, as you might expect, I believe that eliminating any debt is important, both for financial reasons, but also for emotional ones. As we have discussed, eight of the top 10 stressors in life are money-related, and having unaffordable debt is a big part of that. Consider getting that mortgage paid off, eliminating any credit card debt, and getting any car loans paid off, and saving so that you can buy future vehicles for cash. These three things can really result in greater peace of mind, which is really important as you age.
Two other big issues, which are never too early to start thinking about, are downsizing and/or relocating. Just downsizing should result in lower utility costs, insurance costs and real estate taxes. Also, if you move into a townhouse, condominium, apartment or similar arrangement, you won’t have any more landscaping and plowing costs. In addition, less room means you can acquire less stuff in the future, which will save you money, especially if you, or your spouse or significant other, are “shoppers.”
Relocating can have both financial and quality-of-life advantages. Financially, we have discussed in many different columns how taxes, gasoline, utilities and so much more are very high in New York. Relocating to a different state than New York can seem like getting a raise. Also, if it has amenities that you have always wanted to enjoy more — like weather, theatre, athletic events, or big city shopping — that’s a quality-of-life bonus. Then, in today’s world, where children and grandchildren often have to go where the jobs are, relocating near them is more and more common, and for many, it is a real quality-of-life booster.
Keep planning, and Happy Holidays!
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program.