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Using the "B" Word

November 20th, 2009 at 12:29 am

I have to chuckle about a conversation I recently had with a friend I go walking with. She shared she wants to retire in the next five years (she is 55, ~two years younger than I was when I retired). My DF is VERY tired of working but wants to repaint her house before she retires and says she needs to save up for it. I asked if she had used any of the online retirement calculators and she said she had not.

"You might want to check some out..." I told her... "A calculator can help you analyze your budget in relation to your retirement income, so you have a good handle on when you can retire. There are lots of calculators available online..."

"Budget? Oh, I don't have a budget. Except for the mortgage, I like to pay cash, and when I make an ATM withdrawal, as long as there's a decent balance in my account, I'm good. I think having a budget is too much trouble, so I don't bother. I'd never be able to stick to it anyway. I know where I am financially, more or less."

"Hmm. Okay... well, good luck with your retirement plans..." I say no more. What's the point? Yes, some people definitely have simplified view of retirement planning. Now I wish I had asked what she considers a "decent balance" in her checking account.

Posted in Retirement, Family & Friends, Saving Money, Monthly Budget | 5 Comments »

5 Responses to “Using the "B" Word”

  1. monkeymama Says:
    November 20th, 2009 at 01:34 am 1258680886
    1258680886

    I actually know people who do fine without "budgeting." I personally wouldn't read too much into it. (Sounds like a cash envelope system of sorts - just doesn't track every category - which can work).

    BUT, the fact that she needs to save up for one large repair, first, doesn't sound so warm and fuzzy, eh? Seems like an odd comment. Like, "I want to pay cash for a new car before I retire," well that makes a little more sense. Maybe you hope not to car shop again, etc. How much does it cost to paint a house? Seems like it wouldn't be that much?

  2. Joan.of.the.Arch Says:
    November 20th, 2009 at 03:52 am 1258689178
    1258689178

    It is possible your friend has huge, uncommitted savings that she prefers not to get into, but is just more comfortable starting a new, separate pool of money for the painting. Hope she understands her situation and ability to retire or not. Maybe she just isn't comfortable talking with you about the details.

  3. Analise Says:
    November 20th, 2009 at 04:31 am 1258691475
    1258691475

    Joan - My DF is comfortable enough talking to me about her finances. She's just very "relaxed" about financial planning and is counting on her teacher's pension to support her in retirement. While I don't know how much she keeps in her checking account as a cushion, I do know she doesn't have much of an emergency fund. I had to lend her money last year when her mother got sick and she flew to France on a day's notice (and she did pay me back as promised). I think she had just paid her taxes or some other big bill, so she was low on cash and it was several weeks before payday. I think my DF gets by financially but it's the big ticket and unexpected items that she's not prepared for. Budgeting would definitely help her be more prepared, IMHO.

  4. Ima saver Says:
    November 20th, 2009 at 01:18 pm 1258723103
    1258723103

    It is pretty obvious that she does not have much of an emergency fund. I don't know how much of a pension she will get, but I hope, for her sake, that it is a huge amount. I sure could not live on my social security check.

  5. buddy Says:
    November 20th, 2009 at 03:50 pm 1258732207
    1258732207

    Posts about retirement planning and budgeting are interesting to me. I've got a lot to learn.

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