Catch up on retirement savings - it's not too late to start saving today! Do you struggle with saving money? Take responsibility for your finances by starting to save for retirement today! We understand this can be a daunting task, but let go of perceptions, let go of fear, and begin where you are!
In this episode of Friends Talk Financial Planning, Bridget and John address concerns for those who are 50 and haven’t saved for retirement. They begin by acknowledging the fear and anxiety that comes with this situation. Bridget encourages individuals to take responsibility for their feelings and engage with their finances actively. She emphasizes that realizing the need for saving is a crucial first step.
The conversation shifts to the emotional aspects of spending and saving, likening compulsive spending to addictive behavior. Both John and Bridget stress the importance of self-compassion, reminding listeners not to shame themselves for past choices. They suggest practical steps to improve financial habits, including seeking support from resources like Debtors Anonymous, Dave Ramsey’s financial strategies, and Barbara Stanny’s work on overcoming limiting beliefs about money.
Don't be afraid to take meaningful action toward gaining financial stability for retirement!
Resources for Getting Out of Debt:
Debtors anonymous: https://debtorsanonymous.org/
Barbara Stanny Huson: https://www.barbara-huson.com/
Resources:
Alliance of Comprehensive Planners: https://www.acplanners.org
John's firm website: https://www.trinfin.com
Find us on Facebook: www.facebook.com/friendstalkfinancialplanning
Link to Previous Video about Retirement Saving: https://youtu.be/UM1NcGvbAR0
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TRANSCRIPT: Bridget: Hey, John. We got a comment. I'm 50. I have saved nothing. I'm terrified. What do we have to say to that person? Hi, I'm Bridget Sullivan Mermel, and I've got a fee-only financial planning practice in Chicago, Illinois.
John: And I'm John Scherer. I've got a fee-only financial planning practice in Middleton, Wisconsin. Before we dig into how we deal with somebody who hasn't done any saving yet for retirement, we want to remind everybody to hit that subscribe button. Help other people find this content on YouTube. And, yeah, I love this conversation, Bridget. We had a previous episode that talked about a similar thing. Hey, I haven't saved very much for retirement.
I can't even get there. And we'll put a link in the show notes to that last episode. But it's no. Mathematically you can. The math works out that we can. And of course, I'm really good at doing the math and saying, “Well, listen, just follow the rules and it works.” But then there is the practical side of, hey, I haven't done any of this before. And, yeah, somebody else can maybe do that, but I can't do it. I'm lost.
Bridget: Right.
John: And how do you deal with that? And I really love your approach to helping people take action and be engaged. And so, I’m looking forward to today's conversation.
Bridget: Yeah. And so, the people who are in this situation, and there're a lot of them. There’re a lot of them. My first thing is congratulations on taking responsibility and saying how you're feeling about it. I'm terrified. Labeling that emotion is the first big step. Okay, the second thing I would say is that you'll be better off if you start engaging with this. So some comments that we get are things like, “Nobody told me that it was going to be this way.” And okay, now you know. That's too bad that you're just realizing that you need to save for retirement.
Now that might even sound a little snarky, but I have found that people aren't very good at thinking more than two years in advance and maybe five years in advance and some people maybe 10. So it's not even that weird to say “Nobody told me it was going to be like this.” Oh, so now I'm 50. Now I can see I'm going to be 70, because I was 30. And I know what comes along with this because I have parents or relatives who got older. And so, now it's coming together for me.
John: Yeah.
Bridget: My two cents are that a lot of other people are more prepared, but that's okay. Here's where you are.
John: Yeah, I love that concept. And it really rang true. I hadn't heard you say that before. But you’re right; it becomes real. And it reminded me of a quote. I don't know if it was Satchel Paige or someone else, but it goes, “Well, if I'd known I was going to live this long, I'd have taken better care of myself.” From a health standpoint, when you're 30, nothing could ever happen. Then you get to be 50 and you go, “Hang on a second, I might be around here for a while, I better take care of myself.” And I think it applies to our financial lives too. And the other that I thought of as you were describing things here was just that idea of shame. I don't know if shame is the right word.
Bridget: No, I think it is.
John: Or maybe self-flagellation. Oh, I should have done more. I should have done better. I should have done this. I got a friend who says, “Don't s*** on yourself.” And it's one of these things, well, yeah, it’s not great, but it's not like you were just a complete nincompoop. Oh, I kept on walking off the ledge. No, it seemed like it was so far down road, you can't even conceptualize what retirement looks like when you're 30 or even 40 and you're raising kids. I think it can be really easy to get down on yourself.
I know I certainly do that as I compare myself to other people or what my perception of what I should have done is. No, hang on a second. And you just said it at the end. You are where you are. All right, cool. Here's the deal. I can't change the past, but now I can take action. And that empowerment is key. And, and then again for me, I run the numbers. Hey, watch that last episode where we talked about this. The numbers can work out.
Bridget: Yeah, numbers can work out. But sometimes, things are a bit different. And I think this might be 20% of the people. They have not saved any money, but they can't save any money. And you cannot talk them into being able to save any money. They cannot possibly figure out how to save any money. Maybe they save a little bit, but then they have to spend it. With that situation, I think a lot of financial advisors just want to ignore that or just exile that entire situation. And I take a different approach, at least in how I see it. I think it's your basic compulsive or addictive behavior applied to money.
Because every time I buy something, I get a little yay, I have a little hope when something’s on its way. I have a little pleasure. When I was a kid, I always wanted to get presents in the mail. So it's like my little present in the mail, then I have to deal with all the returns and all that. But a lot of people just don't ever return anything. That's not me. But, yeah, so it's this whole process of something that I like, and it brings me a lot of pleasure, so I get how it could be totally addictive. Or maybe I spend X amount so that my credit card gets up to XY amount, and then I can't save. That's what I've heard before. I can't say then.
Or I have these emergencies: my pet, my back. The insurance isn't covering this, that, or the other thing. There’s just a sense of not being able to handle emergencies. Understanding the way life works is that there's always going to be this 10% of emergencies. And you just have to kind of account for that in your budget. And by the time you're 50, though, I think people kind of get it. But then sometimes they have more emergencies when they're older because they've got complicated lives. So, that's one of the things I wanted to bring up. It could be that it's just addictive behavior.
John: Yeah. And we take any other addictive behavior—alcohol or drugs or things—and you go, “Well, geez, just stop.” Well, that's not how it works. That's not how our brains work. That's not how we're wired. And it can feel to some folks, I think, like alcoholism. It's accepted these days as an addiction. It wasn't 50 years ago. But now it's accepted. No, it’s not just that you're weak, you have no willpower. No, there’s something going on chemically in the brain. And I think that the same thing can occur with money, just as you said. And spending is one of those dopamine hits. And those are the things that can cause addiction.
And I go back to being less harsh on yourself and those sorts of things. Hey, there're ways that help folks stop drinking and stop using drugs. And if that's where you find yourself, there are ways that you can do this. And it's not a sign of weakness or character defect or something like that. No, that's just how you're wired. Okay great. How do we deal with it? How do I take action and be intentional now? And you can only control what's going on right now. And what's going to happen going forward. And to take agency in doing that.
Bridget: Yeah. I'm in control to the extent that I can control life. There are parts of life you can't control, but I'm taking action for what I can control. So I have three suggestions for actions that you can take. One suggestion I have is Debtors Anonymous. It’s free. And it’s got a lot of people who have that same issue. I've tried to stop spending by myself, but I can't. And probably, I feel horrible when I can't stop spending. So that's one option. Another option is Dave Ramsey. He's popular, isn't he? Why? Because a lot of people have this problem.
John: Right.
Bridget: I would say he's got a more cognitive behavioral approach. Just stop. Stop making excuses. Stop, stop, stop, stop. And a lot of examples for how to stop. And then a third suggestion I have is Barbara Stanny. She wrote a book called Overcoming Underearning, and several other books. And another recent one is called Rewire for Wealth in which she really talks about rewiring your brain. She focuses on women, particularly women who are making a decent amount of money but seem to have not been able to save anything.
All those three have programs that'll help you walk through it. And I'm most familiar with Barbara Stanny's work, and she really gets into the emotions that are underneath it all. Where did I come up with these crazy beliefs that really aren't okay? I can't save. I'm not worth it. Those are negative messages you might have developed. It will feel better to just ditch that stuff and start being more positive and taking action.
John: Yes. Those are three great resources there. There are some really emotionally charged things in our lives, and money can be one of them. And I just had the thought that most people don't get emotionally attached to what kind of toast they make in the morning or the trees that they happen to plant. And you think, “Oh well, I can plant a tree, I can make my toast. I should be able to save because it's just logical.” No, that's not how we are with things.
And to be able to accept that there are some things you can do to address that issue is really important. So we got that factual. Yep, you can do this. There are ways that you can help yourself. I love those three resources. We will put some links in the show notes for that, and I think that's a great way to wrap up the discussion about the emotions and saving for retirement. I'm John Scherer again. I run a fee-only financial planning practice in Middleton, Wisconsin.
Bridget: And I'm Bridget Sullivan Mermel. I've got a fee-only financial planning practice in Chicago, Illinois. John and I are both proud members of the Alliance of Comprehensive Planners which is a group of fee-only, comprehensive, tax-focused financial planners that are all over the country. We're both taking clients, but if you want to get hooked up with somebody that's in your area, you can check out acplanners.org.
John: And don't forget, hit that subscribe button.
At Sullivan Mermel, Inc., we are fee-only financial planners located in Chicago, Illinois serving clients in Chicago and throughout the nation. We meet both in-person in our Chicago office and virtually through video conferencing and secure file transfer.
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