The debt crisis crosses generational lines – what do you do to stay out of debt?

credit card debt

“I am 30 years old, opened my first credit card in 2010, and my debt has ballooned to over 10k.

My debt is spread out over 5 credit cards that have an average rate of 21%, with the total monthly minimum payment pushing upwards of $300…”

See what the Reddit community has to say: Click for more

Money Mistakes Women Over 50 Are STILL Making:

And What You MUST Do to Financially Survive Old Age

  • In 2016, in the United States:
  • We finally have a legitimate woman candidate for President
    • (way behind most other developed countries but, finally).
  • Women make up slightly less than half the workforce (but less 20% of CEOs).
  • Women hold important political and economic positions
    • (Janet Yellen as Fed Chairman, for one).
  • And a 50 year old woman can expect to live 33 more years
    • another entire adult lifetime!

average life expectancies

And yet, surveys indicate that women own only 36 percent of the retirement assets men own. Which means, making just one money mistake can doom them to poverty in old age or, as many women fear, the bag-lady lifestyle.

Facts say, women have:

Longer Life Spans – As a woman, you can expect to outlive the men in your life. Anywhere from 2 -5 years at a minimum.

Shorter Working Lives – Women generally work few years during their adult lifetime than men do. Most women take periods of sabbatical or reduced hours during their childbearing years. Then they often take more time off to care for elderly parents.  

Earn Lower Lifetime Wages – Women’s jobs tend to pay less, leaving fewer dollars for saving and investing even during their full-time working years.

Higher Rates of Widowhood – 87% of 85 year old women are single. When living alone, they bear all the costs of living without help from a spouse and may need to pay for help with home maintenance and transportation. Younger widows and divorcees are less likely than widowers or divorced men to remarry so women end up living more of their lives as singles.


  1. Women’s retirement incomes are (at median) only 58% of men’s incomes.
  2. As many as 40% of retired women depend on Social Security for ALL their income.
  3. Women are more likely than men to spend their final years in institutions because they outlive their partners and have no other caregivers available.

With lower retirement assets to cover longer life spans, elderly women realistically fear living their final years in poverty.

How to avoid these problems? Good financial planning.

That starts with avoiding the big three mistakes:

#1 Mistake: Failing to Save

#2 Mistake: Lack of Financial Planning and Education

#3 Mistake: Buying High and Selling Low (letting emotions dictate financial decisions)

To avoid making these mistakes, women must be engaged in the financial planning and monetary decisions that govern their lives, including:

  • budgets,
  • savings,
  • insurance and
  • Investments.

Mistake #1: Failing to Save Enough Money is closely tied to budgeting.  

Successful savers pay themselves first (after taxes) and then spend their remaining income on the necessities and luxuries of life.

During your working years, the portion of your wages you save for future consumption becomes the financial asset that allows you to live a secure and healthy lifestyle after your time in the workforce is over. If you fail to save some of your income, no matter whether it’s large or small, you will NOT have the resources necessary to retire from the workforce.

And, when you leave the workforce is often dictated by health or ageism. Even if you want to continue working, more often than not, it’s not your decision. The average retirement age for women in the USA has remained nearly the same for over 20 years: at age 62 (the earliest age you can claim Social Security benefits).

Don’t believe me? Here’s a few remarks women made in response to a recent poll:

From personal experience and different circumstances, I wonder how in the world I am going to take care of myself since I have nothing for retirement.

I worry about being homeless. I’ve had nightmares about it for several years — the result of the outpouring of money required to raise kids post-divorce, post-layoffs, and having to pay crazy amounts of money for very basic insurance.

Will I ever be able to afford to retire and will my body hold up until I can.

Mistake #2: Poor or non-existent financial/retirement planning is culturally rooted.

Most of you grew up with men dictating how the financial assets were invested and distributed. It wasn’t that long ago that female children never inherited any assets from their birth families estates.

The public education system was designed to produce workers for the industrial economy. What happened to those workers after their working lives were over wasn’t even a concern until about 75 years ago when most people still died soon after they left the workforce. There was no need to teach these workers how to save and invest for their retirements.

It’s been only 35 years since the Individual Retirement Account was created to help workers save some of their current income for their future needs. During much of that time, the Mutual Fund companies, stock markets and brokerages have seen these savings as an opportunity to fatten their own wallets.

Using arcane language and a myriad of mathematical gobbledygook, Wall Street convinced Main Street that investing and financial planning were too hard for the average worker to deal with. If you just let them manage your money (taking their fees out first), you didn’t need to worry about your retirement. Women, in particular, were told to let the professionals handle all that.

Now that it’s become clear that the IRA/401k system is woefully short, the blame is laid all at the feet of the workers who failed to save enough. While that’s partially true, the fees that the fat cats took from these accounts have done a great deal to insure that most workers are now short of retirement funds.

Mistake #3: Poor financial decisions clouded by emotions, ties directly to a lack of financial education and the manipulation of the economic narrative by the Wall Street bankers and the Money Media (CNBC, Fox Business, etc.).

Workers who are thrust into managing their own retirement funds, without proper education, respond to the ebb and flow of the economic system inappropriately. Add to that the fact that most of the financial system’s professionals make their money from transactions, (buy, buy, buy, sell, sell, sell!) and the average investor gets confused, allowing greed and fear, instead of a well designed plan, to dictate their actions.

Is It Too Late?

I’m sure you see yourself making at least one of these mistakes – many folks are making all three. So, if you want to learn from your mistakes, in time to salvage your looming retirement, you need a plan:

A plan to fix the mistakes and learn how to manage your money!

And commitment. You can commit, today, to save a percentage of every dollar you receive (even if it comes from a pension or Social Security). Start putting 5 or 10 percent of your income in an envelope or a jar if you want to do it in cash. Use an online savings account if you’re more of an electronic banker (good because it can be automated).

Saving a part of your income does two things for you:

  1. It builds a cushion you can use to smooth out the variable expenses of living and
  2. It forces you to reduce your current spending (assuming you DO NOT borrow to finance consumer spending) so you need less income to maintain your lifestyle.

Financial planning and investing can be learned, just like any other skill you want to acquire. If you wanted to learn to quilt, or decorate cakes, or use a photo editing software, you’d go find someone who knows how to do it and was willing to show you how. You’d sign up for a class at the local college, adult ed school or online; you’d buy a book or an online training program. Maybe you’d find a friend who could show you how to get started.

Whichever way you to decided to learn a new skill, you’d dedicate some time and attention to the project. You’d start with the basics. You’d consistently practice and monitor your results. It’s the same with learning to manage your money and make a financial plan that results in your secure old-age.

We’d like to help you learn to make a financial plan, if you want to help yourself. To do this, we’ve got a series of five steps (we call them tips) you can use to get started.

The cost? Your best email address. The one you check everyday, and a few minutes of your time over the course of the next couple weeks. You open and read each email, then you go take a small action. A day or so later, you get another tip and you open, read and follow the instructions in that one too. When you complete all 5 tips, we’ll suggest ways you can continue to learn more financial management skills.

If that sounds like something you need, put your name and email in the box below: 

Live long and prosper, Leah the

Do You Fear Retirement? Most Women in the USA Do…

homeless womanMost women in the USA are afraid they’ll end up a bag lady (homeless and destitute) in old age.

A recent survey of women, across all economic classes, revealed that 76% of all middle-aged women fear becoming destitute in retirement. 


Because we don’t know how to deal with several key variables that can help us plan for a long and prosperous retirement.

But, we can make a plan that protects us from poverty – if we don’t make some very common errors like:

Counting on Working Past Your Typical Retirement Age

Conventional wisdom says you can always earn more income. Most professionals don’t have mandatory retirement ages and the service based economy is always looking for people eager to work (at low wages) during surges.

So why wouldn’t you plan to keep working or return to the paid workforce as you age?

Health problems are the biggest reason.

Every survey done over the last few decades has shown that fewer than half the people who planned to continue working past typical retirement ages actually do continue to work. Even fewer keep their high paid professional level jobs.

Companies continue to downsize and merge and older, more expensive workers get laid off first (one of the joys of no union protections). Agism in the workplace is real – just ask any 58 year old woman who has had to look for a new job recently.

Retirement Survey While, as the surveys shown here prove, you are not alone, you are responsible for finding a solution to your retirement problems!

The average age of retirement for women in the United States is still 62 years old. Filing for your Social Security benefits at 62 will reduce your monthly benefits for the rest of your life by 25%.

So, if you’ve earned a $2,000 benefit at full retirement age (typically about 66 ½ for baby boomers), expect to collect only $1500 starting at age 62.

In addition, you’re not eligible for medicare until age 65 so you’ll need to buy your own policy. Thanks to the Affordable Care Act, at least you can get health insurance but it will still eat up $400 – $500 or more of your monthly income (and you should factor in a minimum 3% cost increase each year).

Also, remember that most medicare participants need a supplemental (Medigap) policy to cover some standard costs excluded by Medicare.

Another big mistake is:financial ratios

Underestimating Your Income Replacement Ratio (IRR) for Retirement

Many planners promote using a 70% – 80% income replacement goal.

This is based on dated statistics. Unless you plan to retire like your parents did including:

  • No Mortgage,
  • No Credit Card or Consumer Debt,
  • No Dependent Children (or those who depend on your unofficial financial assistance),
  • Reduced Travel and Entertainment Expenses, and
  • Employer Paid Health Insurance,

you’re going to need to replace all your pre-tax income less your retirement savings and your employment taxes. That means 80% is definitely the low end of your IRR and 90% or more is safer.

The best way to reduce your income needs in retirement is to save a large percentage of your current income. If you save 30% and have an employment tax rate of 15%, you’re living on only 55% of your current income. If that describes you now (or you reduce your expenses before retirement to a smaller percentage of your income), you could realistically plan on replacing only 60% – 70% of your earned income during retirement.

Remember too, you need to budget for rising medical costs, income taxes (that will most likely continue to increase) and your Long-Term or End-of-Life care. 

If you’d like to start with a realistic Income Replacement Ratio, click on the following link and work through the ratio calculations in my Money Diva special report: Your Fabulous Retirement… Step #1 

Live long and prosper, Leah the

How the Heck Can We Plan Health Care Expenses as We Age??

sick woman For many of us, the fear of being too old and too sick weighs heavy on our retirement planning. We want to enjoy our golden years! We feel we’ve earned some time off!

But, the second, and potentially most expensive, unknown financial planning variable is what decent and potentially lifesaving healthcare will cost us in the future. The first vexing element of your long term plans for financial freedom and retirement is: how long you’ll live; and the two are obviously interrelated.

Standard retirement planning uses a Monte Carlo simulation to estimate how long our nest egg will last. To start with, I recommend using Vanguard’s free (and very conservative) calculator at  

Play around with portfolio mixes, withdrawal years and rates to see how they affect the projected outcomes.

What we really want to create is a self-perpetuating annuity. By using a withdrawal rate that I can continue – even if we live to be 103. How? With investment return projections about double your withdrawal rate, your portfolio can outpace inflation indefinitely.

But, future health care costs can dramatically affect the amount of passive income we need to sustain a high quality of life as we age. So, how to plan for long term costs based on your unique needs?

Start With the Basics

First, we know that certain healthful lifestyle choices produce better quality of life and lower costs. I know you know that smoking, remaining sedentary and excessive drug use (legal or not) can be counted on to decrease your life expectancy (you’ll need less savings!) and increase your healthcare costs (you’ll need more savings!).  rp_money-finance-economy-savings-save-bank-150x150.jpg

It’s never too late to improve your physical, mental and social habits towards a healthier lifestyle. Use the fitness trackers, trainers and community services now readily available to help live a happier and healthier lifestyle into your golden years.

Then factor in your genetic heritage, cutting edge medical therapies and the impact of advances in Biotech, Nanotech and Robotics will bring in the next few decades and you may be tempted to give up trying to come up with any kind of a plan! But, it’s NOT hopeless and the old axiom:

“Failing to plan is planning for failure”

still applies.

The best free resource to start with is still Visit when you have some time to answer the diet, activity, statistical and family history questions to get started on your personal planning. That’s where I got my “high-end” estimate of 103 years old. I’m pretty confident that if my money lasts that long there will be some left to pass on to my great grand kids!

Out of Your Control

In the United States, the medical billing and insurance system will drive us all nuts (so it’s good mental health coverage is now required). The rules change annually and sometimes in between policy years too. All you can do is educate yourself on what’s currently available and resolve to keep abreast of the changes as they occur.

By being your own healthcare advocate, you can decide what level of intervention you want and what you’re willing to pay for.

You can start by joining the ranks of the proactive (about ¼ of American adults) by executing and maintaining a healthcare directive that’s valid in your primary state of residence. Find yours here:

You’ll also need a durable power of attorney giving a trusted relative or close friend (a proxy or attorney-in-fact) the legal authority to inform medical providers of your preferences if and when you become incapacitated.

Make sure your directive and your designated proxies know how you want to be treated for conditions that require:

  • Respiration Machines
  • Dialysis and other invasive organ support options
  • Feeding tubes
  • Resuscitation efforts for heart failure (a Do Not Resuscitate or DNR order)
  • Donation of tissue or organs after your death

To insure your wishes are followed, keep the signed and witnessed original document within easy access (not in a bank safety deposit box), make a copy and give it to your proxies, your primary care physician, the local hospital or nursing home and close family or friends.

Ask your doctor or hospital to enter it into your electronic medical records  (EMR) and make a wallet sized card ( to carry with your I.D.

Budget Busters

Even when you pass 65 and are eligible for Medicare, your co-pays, deductibles and supplemental care costs can escalate rapidly. Remember that most dental and vision costs are extra, too.

stethoscope money orgSchedule some time each year during the annual enrollment periods (usually in the fall) to review your coverages, any changes in your health or legal status and your year-to-date expenses. Make a revised budget for the upcoming year and adjust your income sources to match.

My rule-of-thumb is to double the projected general inflation rate and add any individual needs to project medical expenses. A separate medical savings account can help keep funds on hand for an emergency. It should always have enough to cover your annual out-of-pocket maximum.

Rise to the Challenge

We still can’t tell the future but we can take actions that put us in position to control both our healthcare costs and services. Unless you really want to depend on the kindness (and the wallets) of strangers to safeguard your finances and your health, go now and start taking control with a well thought out and executed plan. It’s your life and future at stake.

Live long and prosper, Leah the