Category: Taking Care of Business

My dear friend, Patty, would often talk about having a boodle.  Her mother told her that every woman needed a boodle, a stash of her own money, often secret.  I had never heard of it before Patty used it.  I thought it was a Yiddish word, but it’s not. I thought it was a family word. It was not.  However, boodle is a real word. A boodle means a large quantity of something, often ill-gotten money. It is from the Dutch word boedel from the 1600s.  A few of our politician have boodles that get them into a lot of trouble. We are going to talk about the good kind of boodle.

When I was a young woman, we really didn’t think about having our own money. You might save your babysitting money or what you made as a waitress or another job.  You used it to buy clothes or to have a good time. We weren’t taught how to invest or build your credit score.  We hardly knew how to balance our check books if you had one. Then we married and often our husbands took over the finances. I imagine many women had their own boodles from pennies pinched here and there that was stashed away somewhere in the pantry.

 I was a military wife, so I had to do the bills since often my husband was deployed. That was a blessing in disguise for me.  When my husband left me, my eyes opened, not how to pay a bill, but how economics worked.  I had no credit since my credit was tied to my husband’s.  Yet, I was responsibility for caring for two children. 

 I had a good, stable job which was lifesaving for my family.  I was able to get a place to live since I had the money for deposits. The car was a whole other ball game.  With no credit, it was hard to get a loan for a car.  A very nice salesman at the Renault dealership worked very hard to get me a lease so I had a car.  That kind man was a guardian angel.  Angels come in different forms. 

As time passed, and I slowly began building a credit history by paying the rent and the car lease payments, I bravely applied for a Shell gas card.  When I got approved for it, I was walking on air.  I had a credit card. I had a new beginning to take care of myself and my family. Then, the big whammy hit.  My ex did not pay the bills that had my name on it, so what little credit I had built was now in danger. I was back in the hole again. I ended up slowing paying off the loans and credit cards of the joint accounts.  You need to be careful what you sign – if your name is on the account, you are responsible regardless the circumstances. 

I wish I had a boodle.  I could have taken better care of myself if the “stash” was available. I could have eased the challenges I faced.  However, I may not have learned the money lessons I needed to learn. Obviously, I did thrive on my own and grew my credit history.  It was not easy, but it can be done. I am living proof. 

When I became a principal, I would always tell my young female teachers to build their own credit, grow their savings, invest in their retirement, and create a boodle which today is an emergency fund.  It is easier today for women to build credit and manage money but not necessarily easy.  I would also give this advice to older women for many of them still don’t know how to manage their finances.  Life can change so quickly from the passing of a spouse to an unexpected divorce.  It is always better to be prepared.  If you don’t know where to begin, I suggest reading Jane Bryant Quinn’s How to Make Your Money Last or Get Good with Money by Tiffnay Aliche.  Both finance books can help you to self-educate.  You can do it! 

Mary Ann

Cynthia

Malicious access to personal data seems to flow in waves.  Recently we have seen yet another series of hacking (or more accurately named cracking) events. Unfortunately, unauthorized access is one of the challenges of our Internet-based society.  Most people are concerned about this type of activity when personal data is acquired.

Every element of information about ourselves and our lives is “out there” – and once posted your personal story will be on a server in perpetuity. The only safe electronic data, is stored on a computer that is turned off, unplugged, and disconnected from the Internet. The reality is that unauthorized access is a fact of digital life.

Some of the major financial institutions have recently experienced cyber attacks. Not long ago, TIAA, a major retirement fund, was hacked, as have some credit reporting agencies. What is an individual to do?

While we cannot prevent hacking, we can take precautionary steps to safeguard our data.  For example, using anti-virus software on our computers and phones; ensuring we don’t click on any links we are not familiar with; never giving out personal information on the telephone, text messages, or email; and keep personal information only in trusted sites.

Financially, we can lock our credit accounts so that new accounts cannot be opened in our name with our identifying information, such as social security number, birthdate, address, and credit card or bank account numbers.  Locking accounts is easy.

An individual can lock his/her account at no charge but may need to create an access account.  This is different from a credit protection account which will cost a monthly fee. Credit protection accounts are beyond the scope of this post but may also be helpful. Credit protection accounts are available from several companies, in addition to the credit reporting agencies.

To lock your credit account, go to each of the three major credit reporting agencies websites. These agencies are Experian, TransUnion, and Equifax.

From the Experian home page (Experian.com) scroll to Freeze or Unfreeze your Experian Credit File. You will need to “Create a free account.”

On the Transunion home page (https://transunion.com) scroll to click on Credit Freeze & Unfreeze, Get Started, then Add a Freeze.

On the Equifax site (https://equifax.com) scroll down to the bottom of the page, click on Place or Manage a Freeze, and click on Place a Security Freeze.

From there on each of the sites, follow the prompts. You may have to create an account on each, but you do not have to sign up for their security service.  You must freeze your account with each of the reporting agencies. Freezing your account on one site does not freeze your account on the others. Remember, also, that if you do freeze your account, no one can open new accounts with your PID (personal identifying data). To open a new bank account, credit card, or other credit account, you will need to unlock or unfreeze your accounts with the credit reporting agency your intended business uses.

All this sounds much more difficult than it is. You are just a few clicks away from protecting your data.

Mary Ann

During Covid, my good friend L and I did a non-fiction book club. We lived in different states, so this was a way to connect during our confinements.  It was only the two of us, and each Saturday morning, we talk for two or three hours about the reading assignments and life in general.  Even though we could have stopped when the pandemic ended, we have continued reading 60 plus books over the last four years. We focused on nonfiction that included topics on money, health, happiness, self-actualizing, retirement, getting ready to retire, etc.  We wanted to learn about topics that would help us in our lives.

One of the first books we read centered on finance.  I had retired, and L is going to retire at the end of 2024. We needed to get a handle on our money and know how to best support ourselves in the years to come.  The first finance book was How to Make Your Money Last – The indispensable Retirement Guide by Jane Bryant Quinn and is the bible of finance as far as I am concerned.  I frequently refer to this book.  Another finance book that I love is a gem of a little book called How to Retire with Enough Money and How to Know What is Enough Is by Teresa Ghilarducci.  It is the Cliff Notes of finance.  Both are excellent books and very well-written.

Recently, we have added a new book to our All-Star Finance List.  It is Get Good with Money – 10 Simple Steps to Becoming Financially Whole by Tiffany Aliche.  She is known as the Budgetnista.  Ms. Aliche breaks down money into categories and in simple terms explains how a budget works, how to invest, how to buy insurance, and how exactly is your credit score determined.  These elements among others add up to 100% and in the end gives individuals a blueprint to get their finances in order.  Topics are clearly explained, good examples are given for understanding concepts, and most importantly, Ms. Aliche has personally lived through most of what she recommends. She has made all the mistakes and knows what it is like to be penniless. Her firsthand experiences gives everyone hope. She also offers finance worksheets and the like in her book and on her website, getgoodwithmoney.com.

This book is a good gift to give your children and/or grandchildren. L and I have done just that.  I wish that Ms. Aliche would write a finance book for little old ladies like me that would advise elders about medical costs and a guide for signing up for Medicare- the ABCD programs can be so confusing and then you have the supplement alphabet!  Investments for someone retired is different from building retirement funds. I am sure that Ms. Aliche could help investors to help themselves. I gained so much information from Aliche’s book, but I could use some help with my retirement finances. 

All three of these books were written by women.  They all offer good financial advice regardless of gender; however, it is so nice to see women lead on finance.  I can remember years ago when that wasn’t the case.  Thank you, Ms. Bryant, Ms. Ghilarducci, and most recently Ms. Aliche!  You are making all the difference! 

Mary Ann        

When I was a young woman, I was a single mother living on a teacher’s salary and supplementing it with tutoring and summer work.  There wasn’t much left over to save for retirement.  I was just trying to get by.  What little saving I did have was precious.  At the time a friend of mine suggested I move the money to a fund that was getting around 8% which was much better than the return I was currently getting so I moved the money.  As the months passed, the fund kept losing money, and I kept calling the firm asking why this was occurring. No one could tell me why, and after losing half my money, I returned to the original company.  With a little research, I found the fund was junk bonds and the bottom was falling out of them. 

I was so mad at myself that I said never again would I be “fooled.” I had my Scarlett O’Hara moment yelling in my head I will never be hungry again or rather I will learn about money, investments, and retirement.  I spent the next 40 years doing just that reading about investments, talking to advisers, starting investment clubs, and being awake. I did not have much money to invest in the early years, but I would always match what the schools were offering in their retirement programs.  After my children were on their own, I began to max out my annual contributions, and then you turn 50 and you get to make up for lost time with even bigger contributions.  I did just that.  Then there is the magic of compound interest which is the gift that keeps on giving.  

As I was moving with career advancement, I would move my money from the 403bs (the non-profit retirement programs) to IRAs with Vanguard. It was there that my investments really grew.  I also decided to work until I was 70 to max out my Social Security.  The extra years allowed me to grow my retirement savings as well and have more Social Security quarters at a higher rate thus giving me a higher Social Security payment.  I had put my learning to use setting me up for a comfortable retirement. 

Now, that I am retired those early decisions have given me financial security.  I developed a plan, stuck to it, and have reaped the benefits from it all.  When you work in the Independent School world, you must create your own pension from your savings. There is no state pension.  

I feel confident about all my decisions until I start reading the articles online about finance and retirement then I panic.  Inflation, taxes, life expectancy, medical expenses, and low investment growth dominate the headlines.  Will you outlive your money?  What!  I thought I had that all taken care of.  These articles are mind-blowing causing sheer terror and constant anxiety.  If I did everything right, why am I going to be a Bag Lady in a few years.  I read somewhere that women all think that they are going to be Bag Ladies. It makes sense, doesn’t it?

I have recently decided that I need to just enjoy the day.  None of us know how long we have.  It is time to stop reading the articles.  I am going to be Scarlett O’Hara and think about all this tomorrow.  To worry now, doesn’t solve anything.  You need to enjoy life and not fret all the time. You still must be wise about money and watch your investments, but there is more to life than constant worry.  If you remember, Scarlett O’Hara was a bag lady in her lovely green velvet curtains and had lost most of her family fortune.  She would just say fiddle-dee-dee and go about living!  

 Mary Ann

Mama Bears are fierce mothers.  They would defend their babies with their lives.  As they rear their cubs, the mamas teach them how to take care of themselves.  Then one day, Mama Bears send their cubs up a tree and walk away.  Suddenly, the cubs are on their own and eventually climb down the tree and begin their lives.   

I think there are real lessons that the Mama Bears could teach all parents.  Of course, we aren’t sending our children up trees and are not going to walk away from them.  However, learning to be independent is a real gift for life.  Over my 40 years as an educator, I wrote several articles about letting children fail, and afterwards, learning to pick themselves up and begin again.  When children make mistakes, they need to know that they can recover from them.  Each small lesson builds on one another, so they learn how to handle bigger challenges later in life. 

Every time we swoop in to save our children, we are telling them that they cannot help themselves.  Life is hard, and children need to learn how to manage those tough times.  When you start small, it builds self-confidence for children.  As a parent, I picked my children up way too many times. Guilty, Guilty, Guilty!  I tried to make a perfect world for them.  Guilty, Guilty, Guilty!   As I look back, I should have made them figure out their own problems and save them less.I realize that once you become a parent, you are a parent forever.  However, you are not responsible to take care of your children when they become adults.  Statistically, 65% of parents are supporting their adult children and grandchildren in some way.  Many cannot afford this and pay for their own retirement.  As older adults, we don’t know how long we will live and will we have enough money to last for the whole retirement.  Life is indeed hard, and if you can underwrite your children’s lifestyle, more power to you.  Nevertheless, many retirees cannot fund their children’s lives.  It is a hard decision, but we need to be independent and take care of ourselves.  Most financial advisors will tell you to do this.  It is time to be Mam

Mary Ann

Kiplinger’s Retirement Report

Occasionally, the universe rewards you with an unexpected gift, and that gift for me came via the Kiplinger’s Retirement Report.  This monthly newsletter is worth every penny of its subscription price. The newsletter is filled with valuable information about government actions regarding Social Security, Medicare, and other policies that affect your life. It has investment advice, information where to retire in the US or internationally, tax updates, consumer guidance, travel info, and on and on. 

My gift was finding a nugget of information in one of their Social Security articles.  Divorced people who were married for 10 years or more, older than 62, and have not remarried could claim Social Security against the former spouse’s benefits.  You must be divorced for at least two years, and the ex-spouse must be eligible to collect Social Security. You can collect half of the ex-spouse’s benefit, and if the ex-spouse is deceased, you can collect the full amount of the benefit.

I may have read this in the past, but it had not registered.  Social Security certainly is not going to contact you about this option.  As soon as I read the article, I made an appointment at the Social Security Office to see if it was indeed true.  It was, and I could collect the benefit.  Later, when I turned 70, my own Social Security kicked in. I was able to share this information with one of my colleagues at work who was in the exact situation as I was, and her former husband had passed so she got the entire benefit.  This gift from the universe allowed me to buy a house prior to retiring, and it allowed my colleague to retire earlier.  We both collected our Social Security at 70 getting the maximum benefit and preventing two little old ladies from becoming bag ladies.   

I think of all the women (and men) who did not know about this benefit and missed out on the extra money.  It may have made all the difference in the lives of those eligible people.  It does not affect the former spouse at all, and the former spouse would never even know this is occurring.  However, you still must pay taxes on the funds.  You must meet the criteria for the claim. Always check with Social Security. The Social Security website post all the details in the Divorced Spouse Benefit section.  In the end, it allows you to build you own future Social Security by delaying claiming it earlier.   So, all I can say is thank you Kiplinger, thank you universe!