When it comes to financial security, you’ve heard all your life that “the earlier you start saving for retirement, the better…”
That thought has been on your mind for a good 20 years, but something always got in the way of doing much of anything about it. First you had the kids’ schooling, then saving in 529 plans for their college expenses. The house needed a new roof. Your husband lost his job and you had to help bridge the gap.
Even without a husband or kids, life still distracted you, and you figured you’d do something about financial security … someday.
“Retirement” felt so far away … and real fuzzy. (People’s expectations have shifted about what the word even means!) Besides, it was something your parents worried about, not you.
Then one day, more than likely in your early 50s, you woke up to a panicked feeling. Time was flying by so quickly and suddenly you could see “old age” in front of you, as clear as tomorrow. It’s what I call the Moment of Reckoning.
Everyone’s is different. It might have been the day your husband asked you for a divorce. Or the day your boss announced the company was going bankrupt and your pension just imploded.
Or maybe the money in your employer-funded 401(k) plan took a major hit by the economic tsunami in 2008 and you had no idea how you could rebuild it to provide the financial security you counted on. Or you had a health scare when you found a lump in your breast—regardless of the outcome.
Or maybe something was just bothering you, niggling at the back of your mind, and one night you sat bolt upright in bed and said, “Good God, where have the years gone? I don’t have much of anything saved for retirement. If I don’t do something, I’m going to end up like a bag lady pushing a shopping cart through the streets!”
Whatever the trigger is for you, after your Moment of Reckoning nothing is ever the same.
It’s the moment when you suddenly go from believing that life stretches to infinity, with no end in sight … to where you see that life is finite and that the number of years ahead of you is no longer unlimited.
Worse yet, while you may still have 30 or 40 years ahead of you, you’re not financially ready to deal with this new reality.
Now, as much as this gets your adrenaline flowing, there’s still time to get behaviors turned around, patterns changed, and enough money saved if you’re willing to do the work that’s required.
But here’s the rub. There are three areas where we typically trip up. And if any one of the three is out of kilter, it will make it much more difficult to get to the financial security or peace of mind you seek.
The first is not being honest about the numbers in your life: what you have flowing in, what flows out, what you owe, what you’ve accumulated. It doesn’t even matter what the numbers actually are; all that matters is that you get control over them.
The second is not realizing that beliefs that started with messaging you received as a child, even innocently, from parents and other authority figures still affect many of your money behaviors. It’s not hard to get at and release what I call your money “gremlins.” But you do have to become aware of them in order to easily change the destructive ways money can sabotage your good intentions.
The third is not having a clear purpose for your life. It’s not that you have to want to become Mother Theresa. But we humans eventually question why we’re here and what it is we’re supposed to be or do. Most of the dreams we’re carrying with us are rooted in our adolescent or early adult expectations. We need up-to-date dreams to motivate us through this catch-up period … and to allow the money to flow to make those dreams a reality.
We’ll look at each area separately in the next week or two. Meanwhile, leave me a comment about where you think you’re being tripped up!