Where do I go from here?

A lot of us “middle-aged” folks come to this precipice wondering if we have reached the pinnacle of our existence.  Is this all there is to life?  To me??

Why do we think this way? I’ve come to the morbid conclusion it’s because we realize our time now has an expiration date. My main concern is being able to retire comfortable within the next 13 years.

There are coworkers who are still working at my agency in their 70’s.  Their 70’s!!!

It’s a damn shame these people continue clocking in when they should be enjoying their Golden Years.  And not just only that….but when they retire, the vacancy opens up opportunities for the younger generation.

But, to retire on a fixed income is downright scary. I think this fact among health issues, keeps us up late at night.

With the current state of our union, this economic disarray really is forcing people to rethink their financial future. However, with that being said….being cognizant of your future earnings should be as important and part of your life goals as anything else you deem important.

 

The bottom line is….Don’t leave things for the last minute.

 

Games-To-Play-With-The-Elderly-Chess

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Welfare verses the General Public

I happened on the Hair Braiders suing Missouri regulators article on the St. Louis Post Dispatch early this morning.  A couple of commentators where appalled that there are welfare recipients who will prim and “look good” on the American tax payer’s dime. It happens.  It happens all the time and yes, it angers this blogger as am sure it does other readers and the American public in general to know that when it comes to spending “our money” priorities are not set straight.

For me it’s not about race, it’s not about a certain class. It’s about a person’s mentality, what they feel are their immediate priorities and of course, on what they feel they are entitled to.

I was on welfare while in college however I worked on campus, was in the Army Reserves (still serving) and had a full load of college courses. Indeed those of us who have used welfare need to set our priorities straight. Now I work for Uncle Sam and continue charging forward as a soldier and am giving back to my country and my community by becoming a productive member of society.

My daughter saw me as an example of what a Hispanic woman could do while raising a child without the father and without child support. You have to grasp life by the horns and take charge. Simple as that. I saw welfare only as a temporary assistance when it was needed and it should only be seen as that unless you are elderly or mentally/physically disabled. Welfare should NOT be seen as a way of life, a get out of jail free card. It’s there for a reason but yes, it does get abused.  Yes, my rant goes off topic on what the article is discussing but am more focused on what the comment section has provided to me, the reader.

I do think Hair Braiders should be licensed. It’s a thriving business here in St. Louis and I do love the look. It is also a very tedious process but once completed creates a well-coiffed appearance.

 

The low-wage breadwinner

It’s no real surprise that the American economy is stumbling.  According to CNN Money, since the 1980’s there’s been a rise (14%) in this demographic group.  Low wage is set at $11.22 an hour, this excludes teenagers making $8/hour (typically in the fast food industry) .

140205155349-low-wage-low-income-workers-620xa(source)

In order to be considered poor in this country you have to be making (bottom dollar) $23,000 or below as a single person or $46,500 for a family of four. (Yes, it’s expensive to live here.)  Broken down by gender this includes 15% married men and 13% married women. 37% are of both with no children living at home or supporting other relatives.

It really does take two incomes for married couples to stay afloat and with the sketchy job market I just don’t see how it’s possible to survive with one breadwinner unless you start to pare down unnecessary luxuries. You be the judge of what you might consider a luxury. I feel paying for the following are a must and must never be considered a luxury:

1.) Shelter

2.) Food

3.) Utilies

4.) Health/car/home insurance

5.) Car (trust me in the Midwest it’s a necessity).

6.) Gas (see number 5.)

Many American families are having to tighten their fiscal belt by choosing wants such as going out to eat, movies etc…to planning vacations over paying for basic needs.  All the other stuff is just icing on the cake.

I pray we as a nation can recover but certainly our country cannot continue on this unstable footing as we have been the past few years.

 

 

Retirement? What’s that?

I calculated that I have at the very least 17 delightful more years of employment before I can retire.  My goal was 55 but unfortunately I am under the federal retirement system called the Federal Employee Retirement System (which sucks) or FERS for short. (source)

With that being said IF I retire with less than 30 years of service prior to 62 5% of my retirement pension will be deducted for each year am under the age of 62.

So, as of right now am trying to see about buying back my active duty time and apply it towards my total years of federal service.  If I am able to do that it means I can retire in about 13 to 14 years putting me at the tender age of 58. However, FERS employees only receive 1% of their base pay for each year they are in federal service.  So, 30% really isn’t a lot unless I put a bulk of my paycheck into my Thrift Savings Plan (TSP) and we all know with inflation and this shitty economy that’s not going to happen.

Friends have told me that eventually the pension will go the way of the Do Do Bird, and employees will have to invest instead in some kind of 401k plan.  Now, being a federal employee I am currently in no danger of losing my pension but when I reach 58 or 62 who the hell knows?

Scary to think I’d end up like those Detroit retirees whose pensions were to be frozen.  (source) Sad state of affairs. Perhaps a strong union would help. I feel it’s a travesty to our retirees taking their hard earned money. God only knows what’s in store for my daughter and future grandchildren.  It behooves young people to save NOW for their retirement.  Sock it away in something viable.  Though, when I was in my 20’s I wasn’t too concerned since we seem to think we are all invincible at that age.

If you are a federal employee or interested in becoming employed with the federal government here is some retirement info you can read to see if it’s something you really want to do:

FERS retirement topics:

  • Eligibility – The main eligibility requirements for the common types of retirements.
  • Computation – How your retirement annuity is computed.
  • Creditable Service – Rules showing the civilian and military service that can be used to compute your FERS retirement benefits.
  • Planning and Applying – It’s never too early to start planning for retirement in order to ensure it goes smoothly. Here you will find information to help ensure your retirement starts well.
  • Early Retirement – Explanation of the minimum retirement age and early retirement if your agency under goes a “reduction in force” or you are involuntarily separated other than for cause.
  • Types of Retirement – Learn about the age, service requirements and considerations affecting the various types of retirement.
  • Deferred – If you are a former Federal employee who was covered by the Federal Employees Retirement System (FERS), you may be eligible for a deferred annuity at age 62 or the Minimum Retirement Age (MRA).
  • Survivors – When a Federal employee dies, monthly or lump sum benefits may be payable to survivors. Learn about these Survivor benefits here.
  • Military Retired Pay – Adding military service to your civilian service
  • Service Credit – Payment to increase your annuity for civilian service when no CSRS retirement deductions were withheld or were refunded or for military service after 1956.
  • Former Employees – Options if you leave your Government job before becoming eligible for retirement.

Living within our means

How many of us itch to spend our paychecks within a matter of hours? Raise of hands?

I always wonder what compels we Americans to overspend?

According to the International Monetary Fund (IMF) the average American is over $53,000 in debt (2012 levels):

The Federal Reserve Banks puts it more to a modest $43,000 per person (2012 levels), irregardless, it seems Americans tend to have a sense of the “I want it now” entitlement and be damned the future consequences on our national economy:

Total_Household_Debt_By_Composition_NYFED_Q1_2012.PNG

According to Daily Finance:

Americans have increasingly been paying down their mortgage and credit card balances. But even as total consumer debt has diminished by approximately $100 billion (down to a mere $11.4 trillion), more than $1 trillion of our current debt load is delinquent, and nearly $800 billion of that is overdue by more than 90 days. And while owing less is a good thing, the study shows that we’re burning through our savings to pay our debts down. The overall net worth of the average American is down nearly 40% from 2007 to 2010.

Much of that decrease has come from the steep decline in home values. The National Association of Realtors recently released statistics on the sales of existing homes in May 2012, which showed mixed news. Overall, home sales are down, but the median sales price is up to $182,000.

Credit card debt may be the third largest form of debt in the U.S., but it’s decreasing. Americans paid off 5.2% of outstanding credit card debt in 2012, which is 12% more than in 2011, but 8% less than in 2010.

However, with that being said, student loan debt is on the rise at a cost of $904 billion.  Each year the cost of tuition goes up making it harder to even afford higher education.

Each of us has a personal responsibility towards our country’s future and that includes future generations.  I haven’t even touched discretionary credit card spending.  How are we using our plastic money? Is it to buy the next electronic gadget? To pay for basic living expenses or the cost of tuition?

And when you’re married you bring not only your debt into this new partnership but you take on that of your spouse. Though you can say any debt brought into the marriage belongs to the spouse, how many of us here in the USofA really practice this?

In the end we have to take responsibility for our irresponsibility.  Create a sensible budget, know what you are getting into before signing away your credit.  And if married or thinking about getting married by God hash these details out or get a pre-nup. As unromantic as this sounds it could become sound investment advice for your future earnings.

It’s just $$$$ honey!!

images

Setting a budget

Easy right?


Ha, not really. But everyone, even young adults should be conscientious enough to begin getting into the habit of creating a budget they can reasonable live off of.  Americans are notorious for living beyond their means and as you can see by the past credit score our country took a hit at, even our government has a problem.

You need to start with the basics such as:

 

  • Mortgage/Rent
  • Utilities (gas, electric)
  • Trash/sewage
  • Phone
  • Petrol (yes especially these days)
  • Groceries
  • House/Car insurance
  • Entertainment
  • Clothing allowance

Creating a budget was something I also instilled upon my daughter as being important to living relatively stress free and ensuring good credit. It starts young and parents need to teach their children the value of a dollar.  Giving an allowance and opening up a savings account is a good way to start.

 

Kiplinger’s gives sound advice on how to stop living paycheck to paycheck. Hard but can be done:

Track spending and watch expenses

“People who live paycheck to paycheck have to take a hard look at what they’re spending money on,” says Kathleen Campbell, president of Campbell Financial Partners in Fort Myers, Fla. “It’s like when you try to lose weight and you don’t think you eat that much — until you start counting calories. It comes down to trimming what you spend and maximizing where your money is going.”

Start by tracking your spending on a daily basis — down to how much you paid for a cup of coffee. Campbell suggests using a notepad, software such as Quicken or a free budgeting Web site, such as Mint.com, to record everything on which you spend money. The list needs to be more detailed than just “groceries, $400; gasoline, $200.” Write down exactly what you bought and how much it cost.

Don’t stop with the obvious expenses such as utilities, gasoline, food and recreation, though. Look at how much you’re spending (perhaps unnecessarily) to maintain bank or investment accounts or pay down debt. High fees on checking, savings and retirement accounts can eat away at your earnings. And high interest rates on credit cards and loans can force you to pay more than you have to over time.

Read more: http://www.kiplinger.com/features/archives/2006/06/paycheck.html#ixzz1iawi5cwb
Become a Fan of Kiplinger’s on Facebook

 

As an adult there is no excuse for not being able to pay your bills, I should know and have had to learn to par down unneeded expenses. If you find yourself struggling find out where you can downsize and move on from there. I know I am quite guilty of the same and I should always ensure that am able to live well within my means. Sometimes it can be most difficult…temptation, boredom, loneliness creeps in and we go out and spend money to fill the void. You know gals right? The emotional shopper??

But during these uncertain times best to spend your hard earned $$$ well.

But it’s just money honey….

Got into a conversation at work today regarding marital assets.  The women I was talking to were in their late 40’s early 50’s.  They all agreed the younger generation these days seems to not really take marriage seriously as say during their parents’ generation (and mine).

One of the biggest issues which young married couples face (and even older ones) is how to handle finances.  Financial discord seems to top the list.

Couples will argue as to how to spend the money, when to save, how much to save, and mutual retirement funds.  I believe such arguments are only part of some other underlying issues.  Having a bad attitude on how to resolve martial conflict can only poison the relationship.

When it comes to finances it’s important to note money is all part of the security issue, to ensure bills are paid on time, that joint marital assets are laid out equally.  BEFORE getting married I strongly recommend to anyone (doesn’t matter the age) to set ground rules before saying the I do’s and if need be, draw up a pre-nup so in case (God forbid) a divorce follows, so there isn’t this huge dog and pony show on how to divvy up the assets.

Not everyone will find a partner who views money the same way as they do.  But it helps (at least I believe) to have an almost mirror like attitude regarding this one hot topic.

Sit down and draw out what bills are going to be there each month (such as mortgage/rent, utilities, car payments, insurance, groceries etc.) and how much each can set aside for play dates, toys and so on.

Marriage is a partnership which at times I think couples can forget and then a power struggle ensues and this is where the problems are exacerbated.

By setting financial goals together, it brings the couple closer and hopefully builds a lasting foundation that will remain intact through their retirement years.

The Economics of it all

Received the following notice from Federal Retirement article regarding our continuing pay freeze:

The plan, released this morning by Committee Chairman Paul Ryan (R-WI), gave the following specifics that are of particular interest to federal employees:

The federal government has added 147,000 new workers since the President took office. It is no coincidence that private-­-sector employment continues to grow only sluggishly while the government expands: To pay for the public-­- sector’s growth, Washington must immediately tax the private sector or else borrow and impose taxes later to pay down the debt.

The federal government’s responsibilities require a strong federal workforce. Federal workers deserve to be compensated equitably for their important work, but their pay levels, pay increases and fringe benefits should be reformed to better align with those of their private-­-sector counterparts.

Compensation for federal workers continues to outpace pay for their private-­-sector counterparts. The non-­-partisan CBO recently released a study saying that federal workers are, on average, compensated 16 percent higher than comparable private-­-sector employees.21 Immune from the effects of the recession, federal workers have received regular salary bumps regardless of productivity or economic realities.

The reforms called for in this budget aim to slow the federal government’s unsustainable growth and reflect the growing frustration of workers across the country at the privileged rules enjoyed by government employees. They reduce the public-­-sector bureaucracy, not through layoffs, but via a gradual, sensible attrition policy. By 2015, this reform would result in a 10 percent reduction in the federal workforce.

Additionally, this budget freezes federal pay through 2015 and asks federal employees to make a more equitable contribution to their retirement plans. When combined, these proposals will save taxpayers approximately $368 billion over ten years.

Unfortunate news but at the same time simply grateful to have this job and overtime is offered. Not everyone is so lucky, especially those who earn minimum wage which is currently set at:  Federal set at:  $7.25/hour. Some states  may have higher or lower rates you can check the $ amount here:  US Minimum Wages

We Americans are finding ourselves in unfortunate circumstances however we are known to be resilient. 

It’s time to cut back on the “extras” and focus on spending our money more wisely.  I really wish the US Fedearl Government would put a cap on this gouging. Though Europeans state we Americans complain too much regarding these oil prices one thing an individual needs to factor in is the great expanse of this nations. Are urban areas tend to be sprawled out and coupled with a lackluster public transportation system in many cities, it’s difficult to get around.  I know personally here in Saint Louis to get to one point from another which may typically take 20 minutes by car can easily be stretched into 2 hours due to the Metro.

For myself I plan on buying a fuel efficient car and have already cut back on much unnecessary spending and am still looking for ways to cut back even more to build up my nest egg and also my retirement fund, known as the Thrift Spending Plan (TSP). Also can be viewed as a 401k.

Let’s see what this election will bring. Will promises be kept? At times I think the current political system (both city up to federal) is quite cumbersome when it comes to quickly getting things done.

The American Dream

People are so busy dreaming the American Dream, fantasizing about what they could be or have a right to be, that they’re all asleep at the switch. Consequently we are living in the Age of Human Error.” Florence King

The American Dream…what can I say about it? I too have aspired to seek out my own white picket fence….a good education, decent job…car and kids.  Though it came later in my life it came.

Just because you live in the USA doesn’t mean everything is going to be handed to you on a sliver platter. You have to work for what you want. Unless you are born with a silver spoon in your mouth (and face it most people here aren’t) you have to develop a skill, talent…something to meet your needs.

There are individuals who dream about this….heads in the clouds.  Then you look at “their reality” and it isn’t pretty.

There are people out there who live day-to-day–no thought of tomorrow. It’s difficult for me to fathom me living in this manner but there are plenty of people who do here, and overseas.

Where you start in life shouldn’t determine how high you climb–albeit depending on the types of skills you have. And with the American Dream in jeopardy with our government borrowing more money from overseas, manufacturing jobs at a loss….well…seems we are in the middle of a nightmare instead.

There’s a new normal for many American families.  The times, well…they are a’changin’

“The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement. It is a difficult dream for the European upper classes to interpret adequately, and too many of us ourselves have grown weary and mistrustful of it. It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

–Historian and writer James Truslow Adams in his 1931 book Epic of America.

Setting a budget

Easy right?
Ha, not really. But everyone, even young adults should be conscientious enough to begin getting into the habit of creating a budget they can reasonable live off of.  Americans are notorious for living beyond their means and as you can see by the past credit score our country took a hit at, even our government has a problem.

You need to start with the basics such as:

  • Mortgage/Rent
  • Utilities (gas, electric)
  • Trash/sewage
  • Phone
  • Petrol (yes especially these days)
  • Groceries
  • House/Car insurance
  • Entertainment
  • Clothing allowance

Creating a budget was something I also instilled upon my daughter as being important to living relatively stress free and ensuring good credit. It starts young and parents need to teach their children the value of a dollar.  Giving an allowance and opening up a savings account is a good way to start.

 

Kiplinger’s gives sound advice on how to stop living paycheck to paycheck. Hard but can be done:

Track spending and watch expenses

“People who live paycheck to paycheck have to take a hard look at what they’re spending money on,” says Kathleen Campbell, president of Campbell Financial Partners in Fort Myers, Fla. “It’s like when you try to lose weight and you don’t think you eat that much — until you start counting calories. It comes down to trimming what you spend and maximizing where your money is going.”

Start by tracking your spending on a daily basis — down to how much you paid for a cup of coffee. Campbell suggests using a notepad, software such as Quicken or a free budgeting Web site, such as Mint.com, to record everything on which you spend money. The list needs to be more detailed than just “groceries, $400; gasoline, $200.” Write down exactly what you bought and how much it cost.

Don’t stop with the obvious expenses such as utilities, gasoline, food and recreation, though. Look at how much you’re spending (perhaps unnecessarily) to maintain bank or investment accounts or pay down debt. High fees on checking, savings and retirement accounts can eat away at your earnings. And high interest rates on credit cards and loans can force you to pay more than you have to over time.

Read more: http://www.kiplinger.com/features/archives/2006/06/paycheck.html#ixzz1iawi5cwb
Become a Fan of Kiplinger’s on Facebook

 

As an adult there is no excuse for not being able to pay your bills. If you find yourself struggling find out where you can downsize and move on from there. I know I am guilty of the same and I need to ensure that am able to live well within my means.  Certainly these days it’s called for.