OT-A cautionary tale, save for retirement!
I had a friend living with me for the past 18 or so months.
She's a very good friend of mine and while I know this is gossipy, I think there is a lesson here for those who don't have money of their own set aside for retierement.
Some background.
She is 62 and you must be 65 to collect CPP and old age pension in Canada. She is working part time at a retail store.
She went from living with her husband (divorced) to living with her elderly father (died) to renting with other people (couldn't find a good situation) to living with me.
It was fine having her here, she was clean and quiet and never made a fuss. DH said she was just lonely and afraid of living on her own.
However, she had overstayed her welcome and our friendship was beginning to suffer.
She finally found a place and has moved out. A place on her own. Big sigh of relief!
We didn't talk finances. She was embarassed about her situation and I didn't want to make her feel uncomfortable.
She did tell me that she needed her tax return to pay for her first months rent and that a guy she's been dating for about 8 months was going to lend her the damage deposit.
I was floored and a little angry.
She has lived here rent free! I knew her situation was bad and so DH and I decided to not ask her for any money so that she could save. In 18 months she hasn't even saved $2000!?!?
When she was married they lived very very well. They had beautiful homes, new cars, traveled. Her ex took care of all the money. Towards the end she knew something was off but would not confront him. He was robbing Peter to pay Paul and the house ended up in foreclosure.
When they divorced she refused to fight him for anything. She took her belongings and left. He gave her no money, no spousal support, no retirement funds, nothing financial from their entire 23 year marriage.
She said all she wanted was her sanity. None of our mutual friends or her family could convince her that she was going to need some money to grow old with.
When her father died, the kids each got 1/4 of the estate, which was basically the house. She bought a truck, took a cruise and other vacations. She'd asked her brother to keep the remaining money for her. She was afraid that the bank would come after her because of the foreclosure. Her name was the only one on the house it turned out.
Not sure what happened but there is no money left from the sale of the house. Her brother says she's spent it all, she says no she hasn't.
Her sisters have confided in me that she would ask him for a $1000 here and $500 there. I have no doubt now that she spent it but didn't realize just how much money she was going through.
The end result is that she's poor, very poor and I'm not sure she's going to be able to support herself and still eat.
She's lucky that she is relatively healthy because she's going to have to keep working.
All her life there has been someone there to look after the money, now it's just her and there is no money.
It is so important to have money put away for retirement. I know this has nothing to do with step life but if you have a DH that is giving all his money to his skids and not preparing for later in life you'd better start looking out for yourself!
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Comments
I always knew she was a bad
I always knew she was a bad money manager, but somehow thought that as an adult she was better at it than this.
She hides it pretty well. As do we all I guess. As a society we aren't very open about our finances and spending habits.
I have charged my kids rent with the intent of giving it back to them. To teach them that their disposable income isn't as much as they think it is.
It's not something I thought I'd do with an older adult friend! I honestly thought that she would automatically save!
We are going thru this with
We are going thru this with my BIL right now. He's DH's older brother, and although very "intelligent" (book smart?) he has no common sense whatsoever. He lives like a hoarder, puts off paying bills so he can pay others, which always leaves him in the lurch somewhere. He's made a lot of bad decisions (ex-wife who took off with all his money not once, not twice, but THREE times), chasing get-rich-quick schemes, and trying to run a business where he didn't think HE needed to work, he just needed to answer the phone and rake in the money.
In February, we found out he was being evicted, he had not made a house payment (which he purchased on land-contract and was supposed to get a mortgage three years ago but never did) in over six months. During that time we had given him a truck, paid some bills for him, bought him groceries. Because the BIL has been like this for a long time, he has alienated most of my DH's family including his own father (my FIL). Too much money has been borrowed and not paid back over the years, yet he never seems to get out of the hole.
Much to my dismay, my DH (and I by extension) bought a little, very inexpensive house, for him to live in. We have basically put him into a guardianship situation and take all but $100/week of his money and put it into a separate account with just our names on it, from which the bills/taxes/homeowners insurance/etc are paid. We also have to be somewhat careful because we just found out he hasn't paid income taxes in 5+ years. DH also gave him very strict expectations that the house will not look like something off of "Hoarders"; he will NOT move in anyone (no lady friends, as it's rumored he was 'seeing' someone who is currently in jail for fraud), it will just be him and his dog there. If he violates, he gets evicted, and the home gets sold.
It's a truly sad situation. Here I am trying to help my DD19 as much as I can with college, trying to teach my kids to be independent, smart with their choices, and responsible, yet they see us treating BIL (mid-50's) like a toddler. But I don't know what I'd do in my DH's shoes -- not sure I could see my sibling be homeless either. BIL has nothing, and will probably never have anything substantial. I have no clue about any retirement, as he's always worked these fly by night jobs. I just don't want to have to plan *MY* retirement funds around his financial needs. Therefore, I've upped my retirement to the max contribution and am in the process of securing other short and long term investments (my brother is a financial advisor) so at least *I* will be able to be comfortable.
That is truly sad. It's like
That is truly sad.
It's like taking care of someone with a mental illness.
At what point do you cut your ties with someone like this? I hope your DH keeps his boundaries and keeps BIL in check.
Why wasn't she working for 23
Why wasn't she working for 23 years of marriage? Why did she need spousal support? Was she unable to work? Why isn't she working full time? At 62?
My DHs ex never worked. It was impossible to make her work. She now gets hefty alimony and still only works minimum wages 15 hours a week. Spousal support is going to end but by then she will be getting close to collecting social security, based on what DH made in life of work. He also had foreclosure and bankruptcy simply because he could not support her, himself and two kids. He wasn't making enough.
My sister in law never worked a day in her life.
I really don't see it as an issue of poor women getting screwed by men. But more an issue of women not working and then expecting men to foot the bill while married and then After!!! Sure they can say they are entitled to half of this or that but one can say they already got more than working women! They got how many years of living off men!
She worked in the beginning
She worked in the beginning of their marriage. It was her income and savings that they used to buy their first house. He was in training to become a police officer and made next to nothing.
He did well and started a security company, once they had their daughter he insisted that she stay home.
She was happy to do it.
Later, when their daughter was older she worked a few jobs but nothing ever fit and they didn't need her income so she didn't stay.
She owned a business with her sister for a time but that faltered because neither she or her sister is capable of running a business. Her exH did all the paper work for it but again he was stealing from Peter to pay Paul and in the end there was no money in the business.
She now works PT in retail because it's all she can do. She has no office skills or other qualifications.
I didn't say it was a case of a poor woman getting screwed by men. She allowed this to happen to her and she was quite happy to bob along through life letting the man in her life be in control.
She didn't fight her exH for anything! She didn't even hire a lawyer, she just signed what was put in front of her.
What I'm saying is that women need to make sure that they had set up a retirement fund for themselves. There are many women on here who's DHs are paying thru the nose and not thinking at all about the future.
Right. Some kids just raise
Right. Some kids just raise themselves. They only need a parent around an hour or so per day. Or at least that's what lazy, selfish procreators tell themselves while they run around indulging their own wants and ignoring their offspring. Much better choice.
You know we thought that as
You know we thought that as well.
The truth of the matter is that he probably told her he had something on her but it was all lies.
He had a security company that would help companies in foreign countries with security. So oil companies working in Central America, where the threat of kidnapping by guerilla fighters was real.
Some of his stories were outrageous and she believed it all. I knew if it had really happened he'd never had been able to tell anyone about it, let alone his wife's friends.
No, I've known her for over
No, I've known her for over 20 years.
She is a bury her head in the sand and not deal with anything. She didn't know how much their taxes were or the light bill or how much was spent on vacation.
She had vague ideas about the cost of overhead when she had her business but she could never quite get it into her head that she had to charge $50 for a basket that cost her $20 to put together.
Her exH has ideas of grandeur, he thinks he's smarter and better than everyone in the room but he's not malicious.
I think the reason she hasn't saved any money is because she simply doesn't add it all up. It's $10 for breakfast and $5 for a coffee and $15 for lunch and $20 for lotto tickets and $50 for gas. Yet if you were to ask her how much money she'd spent today she'd say "Oh, I put gas in and had something to eat, around $60?"
Then at the end of the month she's like crap where did all my money go.
It's a shame that women don't
It's a shame that women don't get degrees and qualifications and can't support themselves. She wouldn't be able to set up any kind of retirement funds if she never held even semi decent job. Its all terrible.
She worked at a big oil
She worked at a big oil company when they met and for the first few years of marriage.
It was all the years at home that did her in. Office work changed immensely, if she'd stayed working she would have kept up with technology.
She cashed in the money saved to buy their first house, if she'd left it she'd be fine now.
Yes! Yes! Yes! She is where
Yes! Yes! Yes!
She is where she is because she wanted no part of any of it.
It's not that she spent like crazy or refused to work or demanded a certain lifestyle.
She just didn't want to deal with the paperwork and the decisions.
I think the lesson should be
I think the lesson should be that women need to have educationand career regardless if they single/married/have kids/no kids etc. Not that they need to successfully sue for spousal support and half of assets.
It's also a lesson for men. Stir away from women who refuse to work (I know quite a few women who refuse to work and I bet they tell stories how their husbands insist they don't work. Yeah ok)
I completely agree with
I completely agree with this.
Daycare is so expensive that it isn't always worth having the woman work while the kids are young, and honestly, when they are in school, your day still isn't as open as you'd like it to be.
My best friend has her MBA. She was an IT project manager, and she is now a SAHM. She has 4 children. I don't doubt that she will go back to work someday, but even then I'm not sure because of all the activities she needs to run around with them. She is a SAHM mom, and her mother still helps her watch one or the other while she runs around with the others.
My SIL left her high paying job once she had their 3rd child. My niece and nephews are 17,16, and 14, and my SIL only now works part time. She's a very good money manager, so she uses her part time money to pay for their vacations.
I think being a SAHM parent is a decision made by the couple, and not because the woman simply does not want to work. I only know on woman who does not want to work, but she's a worse SAHM, so she keeps getting jobs (and getting let go). I would think that's the minority of women out there. If you split up, you may have to work, and live according to your new standard of living which will undoubtedly be lower.
I agree, money management skills is the lesson here; not "don't be a SAHM".
I was a SAHM I loved every
I was a SAHM
I loved every minute of it and would not trade it for anything. Even though it almost did me in when we divorced.
Near the end of our marriage DH was pressuring me to get a job. I sat down and ran the numbers.
It was going to cost $250 a month for before and after school for our oldest and $900 a month for all day care of our youngest.
I had little training but probably could have gotten a job that paid around $1800 a month, after taxes that would have been around $1500
So I'd be working for $350 a month. That is without factoring in the costs of gas and work clothes.
Add to that, I'd be the one having to do all drop offs and pick ups because exH hours didn't work with day care hours and I'd still be the one cooking dinner and doing most of the household chores.
It made no sense at all.
"The real lesson is be aware
"The real lesson is be aware and don't just rely on other people. Everyone needs basic money management skills."
YES! HeavenLike, this is what I'm trying to say.
No matter what your situation is, working, SAHM, disabled, unemployed, retired you needed to be aware and not rely on others. Take control of your own life and your own money.
I knew a man who was
I knew a man who was president of a multibillion dollar subsidiary of a major corporation (one in top 10). He was great in his industry but his wife took care of everything on the home front. When she died (both were in their mid 50s) he was utterly lost. I don't think he even knew how to write a check.
Sure he had money but he made some horrible financial decisions because he did not know how to handle money at all. He was a whiz at manufacturing and engineering - but had delegated financial stuff at work and home.
Not sure about in Canada - but in the US I know many elderly women living on meager social security who actually are not starving to death. No they can't live in a high cost area - but there are many places in the US where the cost of living is a fraction of what it is on the coasts.
And there are often subsidized housing projects for the elderly and disabled where the rent is virtually nothing. I have one in my back yard - literally. They have the same great location and view that I have. Plus they may be able to get food stamps. The complex provides transportation to doctors, etc. Someone with a very low income can usually get a medicare supplemental policy for very little a month.
No it is not a luxurious existence. But several of the men and woman I know are quite happy. They have the basic necessities in life and have friends. It's when people try to live a lifestyle that they do not have money for that they end up in trouble - at any age.
I've been with my DH for 20
I've been with my DH for 20 years and I still operate as if I were single, financially. I do not count on DH's income or retirement to fund my life now or in the future. I mean, he pays his share of the bills and stuff but other than that, I do not count on his money for anything.
When we bought a house, we bought one that we could afford on one salary, if we needed to. We could've bought a nicer, more expensive house but decided to bank the difference in the monthly mortgage instead. And be safe from foreclosure, if one of us lost our job.
There were a lot of things your friend could have done along the way to not end up in the position that she's in. Very sad but I am realizing that there are a lot of people like that. My friend and co-worker is one, and I would have never thought it, but she needed my help and it all came out. I was flabbergasted to find out what a mess her finances are and am surprised at the resistance I'm getting, even though she wants my help (she is, at least, contributing to a 401K).
Some people just fly by the seat of their pants, without thinking of the long term consequences.
Unfortunately when a woman
Unfortunately when a woman chooses not to have education and career or any kind of skills, when she is unexpectedly widowed or is divorced and she isn't young anymore, all she has to rely on is spousal support or life insurance etc etc It's not easy to start from
scratch when you are older.
That's why I personally believe that not getting education or vocational training and not having a career Is a terrible terrible decision.
I understand many women think otherwise. We don't have to agree.
Exactly. Women who work also
Exactly. Women who work also raise kids. Most SAHM stay home while kids are at school all day. That isn't exactly raising anybody.
I have more assets than my
I have more assets than my DH. But I do not want my worthless POS SS31 to ever have one penny of my assets. And as DH is almost a decade younger than I am that could happen if I died first. So I have set up a trust where my DH gets use of one of my homes (3) and a certain amount of income. But the rest all goes to the charity of my choice.
The worthless SS can eat poop and die vs getting any of my assets. I'd rather my DH be penniless than for SS to get his hands on one cent of my money.
She very much is
She very much is codependent.
Yes, she will have to continue to work. She seems to think that the years she spent working for the oil and gas company will give her a large CPP income but I think she's going to be terribly disappointed.
At least she has healthcare.
At least she has healthcare.
People might think they are
People might think they are 10 years away from retirement, but that might not be the case. I planned on retiring at 55. The role I was in in the corporate world seems to have an expiration date of 50. I didn't get to work those last 5 years. And I have seen this happen to several others.
With the uncertainty of this economy, low salary increases, healthcare insanity, and layoffs so the CEO's and cronies make their bonuses, people need to live way under their means and save every spare cent. So glad I didn't care about lake houses and BMW's. Quite content in the foreclosure we bought and driving our cars until they crap out.
My background is economic-based. I think there is going to be a major recession when the youngest baby boomers lose their buying power, which will coincide with the young student-loan ridden not being able to afford to purchase housing. We have seen more than once what a surplus in housing does to our economy.
About how people losing money
About how people losing money by working: it only happens with low income earners or if people would rather be on
a government assistance.
If people have a decent job then they are much better off WORKING.
Also there are many other reasons for maintaining a career besides just income. I don't understand what's so exciting to have no job experience and no skills in advanced age.
Suggesting that because it is somehow economically advantageous for women not to work (and it's incorrect) , women better off sitting home while men advancing their careers is very sexist and backwards .
I am not saying anything
I am not saying anything simplistic at all, quite the opposite. Perhaps your experience is primarily with low income earners. Certainly price of day care (if children are young, but many women stay home as long as 20 years so clearly there is no day care cost) or a second car comes into play. But thats very simplistic.
I am talking about professional high income earners. If wife makes 100k (example) suggesting she should give up her high end job because she is better off not working is funny. If I gave up my income, we wouldn't have nice life style at all because we make the same. We would have to give up a lot of things. Half to be precise. And it's the same for anyone who is not low income earner.
I have to add that it's impossible to justify cost of college degree or other qualifications (student loans etc ) if a woman decides to stay home for years. Unsure how she is better off not working after a degree (unless you suggest people are better off not just not working but also not getting any schooling, yeah ok)
I don't think you understand how other people live and what they make etc. It's not as simplistic.
I am in my 40s and I know
I am in my 40s and I know many people my age and older that have little or no retirement savings. No 401ks , no real assets and they rent . Some have student loans and tax debt. Can't forget credit card debt. I know it is important to have fun , but it's dumb to live way above your means.
Look at all the GoFundMe accounts set up for funerals , medical , housing etc . No one plans for the hard parts of life anymore.
I am a planner and a saver . I don't want to struggle later in life - I value security.
It's sad your friend is struggling , but she made her choices . She should of saved every penny possible when she was living rent free with you.