When I first had to take over the support of my mother and aunt, it was overwhelming. I had to scale back on my savings temporarily. That lasted about two years until I figured things out. I had them move in with me to cut expenses. I bit the bullet for the benefit of my finances.
Good thing I did. Later, I had to add another $40,000 expense annually to my budget when I needed to hire a caregiver to help take care of my mother. But I still had to take out an equity line of credit to add a handicapped bedroom onto my home to accommodate her needs.
I should say that in our family, helping each other is expected. We lived at home longer than other families. We each paid our parents $25 a week to live there, though, which helped us learn that we had to pay for a roof over our head (plus it helped them out with daily expenses).
By my thirties, I found myself still single and realized there might not be a man to take charge of financial matters as my parents once told me. So I set out to figure it out myself.
At first, I knew nothing about investing or managing money. All I knew was how to save. When my company implemented a 401(k), I was excited when I learned they would match my contributions. Anytime I got a pay raise, I contributed more to the fund. It came directly out of my paycheck. I also saved by never getting caught up in what others were doing. I didn’t spend on excessive recreation or travel, for example. I always saved more than I spent.
I had no magical strategy. What I did was consistently save over time and it paid off. Ten years ago, at the age of 52, I’d saved $1 million for retirement! It was as simple as that.
I didn’t know enough to have investment insights when I was young. I just read what successful people did and that they invested for the long term. The only edge I had was staying put in a diversified portfolio and not getting emotional about markets going up or down.
I think the harder part is having the discipline to save. So my tip is: save now or pay later. Far too many people wake up in their sixties and realize they don’t have enough money. I say, let go of the mentality of spending money for immediate gratification to protect yourself in the long-term.