I want to thank everyone who responded to my previous post. Even though I was not able to implement many of the suggestions I received right this minute, you gave me much to think about. I truly appreciate both the suggestions and support that I have been given. I put this situation out there because I want others who live on fixed incomes or only social security to see that there are creative solutions for almost any problem. I also want people to see that the same solutions do not work for all. I will tell you that I have come up with both a long term and short term solution. Neither will require sale of my car or a renter at this stage in the game. Look for me to blog in length about this situation tomorrow at the latest.
While I hesitate to rehash all of my financial history, I figured it's only fair to share with new readers regarding my current finances and how I got here. My husband died in 2006. I was an at home spouse inexperienced in investments and money management (not due to my husband's attitudes). In the first year and half after his death I literally ate or spent my life insurance money, all day every day.
While I was, and am "frugally savvy", I was not financially savvy. Some of my spending was required (moving my family and possessions half way around the world). Some of my spending was sensible (putting a thirty percent deposit on this house, buying long term investment purchases), some was emotionally driven (private school at a golf business academy for my son). Much of this spending was, quite simply, spending.
I am good at managing what I have, making it last, living well on very little. I am not good at the rest of the financial management pie. I'm the kid who given five hundred dollars at Christmas, spends it all. Not on candy or junk, mind you. On jeans, presents for mom and dad, even the church plate. Still, in the end it's all been spent, even if for good causes. In our marriage, I did the budget and managed our money including giving my husband an allowance and approving all purchases. He in turn managed the other finances and was the kind of guy who could research a purchase for a month before making a decision. We complemented each other in life. Unfortunately, I was reeling so much that it never occurred to me to look to someone else to assist me after he died (much of this was because I was an ocean away from family. Had I been near my brother during those eight months, I am sure he would have seen what was going on and realized he needed to share his opinion).
The end result is that I have a guaranteed, specific income every month. I do not have to figure out how much to take out each year, or how long it has to last. This is a double edged sword, as they say, but I see more ups than downs. I know what I have to do in order to get where I want to be. I also know that the difference is my responsibility, be it earning or cutting expenses. In the case of the current situation I will tell you I have chosen not to cut expenses. Im comfortable with my lifestyle, my decisions and the way I live day to day. On the other hand, living month to month requires planning for emergencies and unexpected expenses. Which leads back to the previous post.
As I said, I promise to share my solutions to my emergency fund dilemma very soon, if not tomorrow. Hopefully this brief update will explain both why I need to begin a savings account at sixty and how I got here. Oh, and if any of you have any suggestions as to the wisdom of starting an IRA at age sixty, go ahead and jump in. My tax software keeps telling me that I could decrease my taxes if I would just start an IRA and contribute to it. On the other hand, my tax obligation is zero. Nothing owed, nothing due. How often does that happen? Of couse, since I have no "earned income" that may be a moot point as well.