Discipline Matters With Money

The financial status for most working Americans in 2020 can be summed up with one word, “confidence.” But whoa Nelly, not so fast. Yes, employment is at an all time high and earnings are up. However, a study by Northwestern Mutual found that nearly a third of Americans over 18 are within three paychecks of needing to either borrow money or skip paying a few bills.

The study also reports that 22% of us have less than $5,000 saved for retirement and will need to work past retirement age in order to maintain their lifestyle. So are Americans financially overconfident? It would appear so.

So how can we buckle down and build a healthy emergency fund and save for retirement?

  1. Create a budget. I know, it sounds dreary and boring, but reportedly we spend 100x more time watching TV or scrolling our mobile devices than we do working on personal finances. Consider using that device to effortlessly manage your finances with a free app like Mint to see all your bills and bank accounts at a glance, create a budget, and even have access to your credit score.
  2. Pay yourself before you pay your creditors. Set up automatic deposits that move money into savings each month. These deposits will help you avoid spending money frivolously and quickly build your savings and emergency fund.

The size of your emergency fund and retirement savings depends on your lifestyle, monthly costs, income, and dependents. The rule of thumb is to put away from 3 to 6 months’ worth of expenses for emergencies like car repairs, medical bills, job loss, or temporary disability.

Retirement funds vary by age, but having 2x your annual salary by age 40, 4x by age 50, and 6x by age 60 is recommended for your 401(k). If you retire at 67, it recommended to have at least $600,000 saved. 

Many people simply plan to continue working after retirement age and to bank on being in good health and not suffering any layoffs or business failures. The better alternative is to start or increase savings as early as possible. If you never see the money in your wallet or checking account, you won’t miss it.

DL MoneyMatters provides accounting and daily money management services and does not  give investment advice. If you need a trusted financial or investment advisor, we may be able to provide a reference.

Senior Drug Misuse and Abuse

The following article is provided by Cincinnati-based senior home care provider, A Caring Choice. We consider A Caring Choice to be a subject matter expert on senior care and commend them for winning Business of the Year from the Colerain Chamber 2015, and USA Cincinnati Chamber 2014. We encourage our subscribers to sign up for their free monthly newsletter Cincy Senior Corner on their website.

Underestimated and under diagnosed, senior drug misuse and abuse means older adults don’t get the help they need.

seniorMore than 80 percent of seniors age 57 to 85 use at least one daily medication, and more than half take at least five medications or supplements daily, reports The National Institutes of Health (NIH). These older adults are more likely to use long-term prescriptions, use medication improperly, or use another’s medication to save money. All increase the risk of bad drug interactions.

Older adults are in danger of misusing and abusing drugs, particularly by accident. Their bodies have trouble metabolizing drugs. Some medicines they use don’t mix well with other prescribed medications, over-the-counter drugs and herbal remedies. And according to the Food & Drug Administration (FDA), highly addictive drugs for anxiety, pain and insomnia often are prescribed for them.

Possible Causes, Likely Symptoms

Life changes can lead to dependency on drugs (and even alcohol):

  • Retirement, loss of income or financial strain
  • Death of a spouse, family member, close friend or pet
  • Loss of mobility, relocation or nursing home placement
  • Family conflict
  • Mental health decline such as depression, stress and memory loss
  • Physical health decline due to major surgeries and pain

Unfortunately, symptoms of dependency often mimic those of actual diseases and conditions, such as diabetes, dementia or depression, or aging itself, the FDA advises.

Treatment and Prevention

Older adults don’t always realize the risks of drug interactions, may be reluctant to admit a problem or ask for help. If family and friends recognize what’s going on, they may not want to intervene—or believe seniors are less likely to benefit from treatment, or that it’s a waste of resources to try.

A family member or friend may need to accompany a senior on doctor visits, organize the older adult’s prescriptions and monitor his or her daily regimen. Abuse may require detoxification, counseling to change unhealthy thinking patterns, and medications to counter the effects of other drugs or relieve withdrawal symptoms—not to mention ongoing support to recover fully.

Prevention is key:

  • Manufacturers can develop safe, effective and non-addicting pain medications.
  • Doctors can spend more time with patients, look for symptoms, notice increases in amounts and frequency of refill requests, and watch for patients who change providers to get prescriptions they want.
  • Pharmacists can help patients understand instructions for medications and watch for prescription falsifications or alterations.

With the help of family and friends, seniors can:

  • Inform doctors about all prescriptions, over-the-counter medicines, vitamins and dietary and herbal supplements.
  • Ask questions about potential interactions with other drugs and alcohol.
  • Follow pharmacist and label directions.
  • Store medications safely.
  • Get rid of unused or expired medications.

Editor’s remarks: DL MoneyMatters and A Caring Choice may from time to time exchange articles for publishing to our respective audiences. We welcome your feedback and hope that you share it with your friends and colleagues who have an interest in topics related to personal finance and senior care.

Sandwich Grandparents

We frequently talk about children of aging parents taking charge of the financial well-being of those who raised them. What about the financial challenges of the “Sandwiched Grandparents”? According to recent stats, there are 2.7 million grandparents raising grandchildren at a time in their life when they should be saving for retirement. Take Monica and Jake for example…

grandfatherMonica and Jake are in their early 60s. Monica is a former schoolteacher, and Jake expects to retire at 67 from an engineering job with the State of Ohio. Looking forward to retirement, they downsize to what they call their “everlasting house”—a single story 2-bedroom home on a little lake, just perfect for retirement years. Six carefree months pass before they hear devastating news—their only son, Jess, an Army veteran with a wife and child based in California is killed by a roadside bomb while serving in Afghanistan. His widow Darlene is now the sole caretaker of 5-year Melody, but at the funeral they are once again hit with an emotional bombshell: Jess’s widow Darlene struggles with drug addiction. Monica and Jake take temporary custody, and two years later, full custody.

Variations of this story affect millions. University of Toronto professor Esme Fuller-Thomson, is an expert in the phenomena of grandparents raising grandchildren. She says in an interview, “You should be saving for retirement; instead, you’re spending your savings and it’s very hard to get back to work.” She adds, “People who are older and living on fixed incomes really have a hard time stretching to meet clothing and bigger accommodation issues like having a larger home, and child-care issues.”

Apart from the financial downside of being a “sandwich grandparent” is that kids, especially very young ones, are constantly passing on their exposure to colds and other ailments; and grandma and grandpa get a lot less sleep. But the rewards often outweigh the risks knowing that their grandchildren are well cared for and their own lives are more active and meaningful.

In 1997, the Ohio General Assembly directed the Ohio Department of Aging to organize and chair a special “Grandparents Raising Grandchildren” Task Force. Information is available here. The Ohio Department of Job and Family Services offers a downloadable report Ohio Resource Guide for Relatives Caring for Children.

If you have a family friend or relative that is experiencing the joys and challenges of being a Sandwich Grandparent, we encourage you to forward this blog. If we can help with any money management issues or answer any questions, please call us at (513) 322-1036.