"With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

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"With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by arcticpineapplecorp. » Fri Feb 17, 2017 10:22 pm

Saw this story today. A cautionary tale about not living beyond your means. To keep it actionable, perhaps people can share what the article means to them. Seeing the word "tony" mentioned in reference to the subject's original digs in California made me think instantly of Dr. Bernstein who warns millenials in "If You Can" (can be found here at http://www.etf.com/docs/IfYouCan.pdf):

...a painfully thin margin of savings, and it can be wiped out simply by stringing together seemingly innocent expenditures: a latte per day, a too- rich cable package, an apartment that's a little too tony...

Some highlights from the article (at http://www.msn.com/en-us/money/retireme ... li=BBnb7Kz):

“This is the first time where we have seen such a high degree of debt held by people at such a late stage of life,” said Torsten Slok, chief international economist at Deutsche Bank AG...

Ms. Wolf, who for years had shopped for food, clothing and luxuries without constraint, now lives within a budget.

Until recently, she said, “I didn’t understand the value of a dollar.”

Against the backdrop of the real estate boom, Ms. Wolf thought she would continue prospering financially into her 80s. She bought fur coats, designer handbags, furniture and, in the 2000s, a succession of upscale cars: BMW roadster, a Lexus 420 SL. She paid $17,500 to join the Spanish Bay club in nearby Pebble Beach.

“I was just playing being a rich person, I wasn’t rich,” Ms. Wolf said. “What you’re supposed to do with your money is sock it away. I didn’t.”

Ms. Wolf turned from shopping at Whole Foods to Costco to discount-food markets. As her savings and income dwindled, she turned to the Salvation Army for dried and canned foods. Instead of making money flipping houses, she cleaned them.

Her vision worsened, but she couldn’t afford the Medicare copay for a new prescription. To read bills and legal documents, Ms. Wolf said she would press a magnifying glass to her glasses—in Tiffany frames, which she laughs about now.

Ms. Wolf will seek a job soon, she said. She has noticed women her age working at local big-box retailers, and she hopes to find part-time work at one of them.

http://www.msn.com/en-us/money/retireme ... li=BBnb7Kz
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by motorcyclesarecool » Fri Feb 17, 2017 10:34 pm

I think there are many boomers who will have to wake up and smell the Alpo. I had many coworkers who went 100% stable value in the dark days of '08 and never came back. Lots of boomers still buying cars on credit. Let's face it, Bogleheads are a weird sort, compared to the society at large.
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by 2pedals » Fri Feb 17, 2017 10:35 pm

So many people buying things beyond their means. This makes me really sad. :(

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by Dottie57 » Fri Feb 17, 2017 10:51 pm

Somtimes I end up seeing myself in these articles. I am one of those people who buys a latte every day and sometimes a sweet. My day doesn't seem right without it and I admit it.

However, I am still living in my starter home which I bought 30 years ago. My cars are kept until I feel unsafe in them. Not a lot of spending on vacations since I don't have the travel bug. So the big ticket items are well under control. So I don't think I should be ashamed of the smaller items if they don't represent over-spending on bigger ticket items.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by dwickenh » Fri Feb 17, 2017 10:58 pm

Dottie57 wrote:Somtimes I end up seeing myself in these articles. I am one of those people who buys a latte every day and sometimes a sweet. My day doesn't seem right without it and I admit it.

However, I am still living in my starter home which I bought 30 years ago. My cars are kept until I feel unsafe in them. Not a lot of spending on vacations since I don't have the travel bug. So the big ticket items are well under control. So I don't think I should be ashamed of the smaller items if they don't represent over-spending on bigger ticket items.


I agree Dottie57, sometimes it is the simple pleasures that count the most. Because you indulge yourself occasionally, or even daily, does not mean your budget is out of control. I budget for the simple pleasures and do not feel guilty that way.

Best to you,

Dan
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by Dottie57 » Fri Feb 17, 2017 11:41 pm

dwickenh wrote:
Dottie57 wrote:Somtimes I end up seeing myself in these articles. I am one of those people who buys a latte every day and sometimes a sweet. My day doesn't seem right without it and I admit it.

However, I am still living in my starter home which I bought 30 years ago. My cars are kept until I feel unsafe in them. Not a lot of spending on vacations since I don't have the travel bug. So the big ticket items are well under control. So I don't think I should be ashamed of the smaller items if they don't represent over-spending on bigger ticket items.


I agree Dottie57, sometimes it is the simple pleasures that count the most. Because you indulge yourself occasionally, or even daily, does not mean your budget is out of control. I budget for the simple pleasures and do not feel guilty that way.

Best to you,

Dan


Thank you.

About 5 years ago I was chastised by the director of my work group for wasting money on lattes. She however, had a large, expensive house she couldn't sell, a payment for a big boat, an unemployed husband And a big expensive wedding for her daughter.

I think I was in better financial shape than she.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by Erwin » Sat Feb 18, 2017 1:52 am

My parents, holocaust survivors, fearful of running out of money, although they worked hard and accumulated plenty, lived an extremely simple life, never allowed themselves any luxuries, died leaving their two sons most of their wealth. Does that make sense?
There is nothing wrong with being a big spender if that is what you enjoy and you can afford it.
Erwin

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by SpecialK22 » Sat Feb 18, 2017 3:08 am

Interesting. I'm either a late Gen X or early Millennial depending on how it's defined, but I wonder how my generation will end up in middle age. Overpaying for college seems to be a major problem for many in my generation, but I admit that might just be anecdotal. It also reflects my own biases. Little expenditures add up, but it seems pale compared to spending late teens/early twenties effectively unemployed and racking up non-dischargeable debt. All for what is little more than an overpriced trade school.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by grettman » Sat Feb 18, 2017 6:22 am

Erwin wrote:My parents, holocaust survivors, fearful of running out of money, although they worked hard and accumulated plenty, lived an extremely simple life, never allowed themselves any luxuries, died leaving their two sons most of their wealth. Does that make sense?
There is nothing wrong with being a big spender if that is what you enjoy and you can afford it.



Agreed. I struggle with finding a balance. What has helped me is goal setting and monitoring my finances closely. I believe that if you are fully funding your retirement accounts, tamping down debt, and minimizing recurring costs that provide little value, you should fee free to have the splurges. Big or small. Lattes and big purchases are fine if you are taking care of business.....

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by cinghiale » Sat Feb 18, 2017 6:39 am

Dottie57 wrote:
Somtimes I end up seeing myself in these articles. I am one of those people who buys a latte every day and sometimes a sweet. My day doesn't seem right without it and I admit it.

However, I am still living in my starter home which I bought 30 years ago. My cars are kept until I feel unsafe in them. Not a lot of spending on vacations since I don't have the travel bug. So the big ticket items are well under control. So I don't think I should be ashamed of the smaller items if they don't represent over-spending on bigger ticket items.

I'm glad to see that a few people have chimed in to support your perspective. After 30 years of work and pretty consistent careful budgeting, we are very happy being "penny foolish and pound wise." We "splurge" on a cappuccino at a comfortable cafe. We indulge in locally grown and that-day-harvested produce. We treat ourselves to live music venues. Meanwhile, like Dottie, we remain careful with the big stuff, and frankly are not tempted to live, drive, eat, or travel "top shelf."

In a sense, it's a process just the opposite of the article's title. We are Making Peace With More.
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by frugalecon » Sat Feb 18, 2017 6:49 am

This person made many mistakes, but at least she eventually analyzed her situation and implemented a realistic plan. I think that is an important lesson. Run the numbers and trust the math. There really aren't magical solutions to these problems. I have a friend in his mid-60s who has been intermittently and marginally employed for the last three years. He has burned through all of his savings, and every month is a struggle to cover his basic expenses. Unfortunately he hasn't been willing to abandon unrealistic thinking,

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by cherijoh » Sat Feb 18, 2017 7:42 am

SpecialK22 wrote:Interesting. I'm either a late Gen X or early Millennial depending on how it's defined, but I wonder how my generation will end up in middle age. Overpaying for college seems to be a major problem for many in my generation, but I admit that might just be anecdotal. It also reflects my own biases. Little expenditures add up, but it seems pale compared to spending late teens/early twenties effectively unemployed and racking up non-dischargeable debt. All for what is little more than an overpriced trade school.


+1
I don't think it is just anecdotal. I'm a late boomer who is flummoxed by how much college costs these days. And how many people rack of debt that exceeds 3x, 4x or even 5x multiples of their potential starting salary upon graduation.

Let me give you a contrasting picture from several decades ago. I went to an in-state school and lived on campus. IIRC tuition was $600 per semester as a freshman - which was only about 1.5 - 2x what my textbooks cost! Room and board added about $1200 per semester. So all-in, my freshman year of college cost less than $4500. I also received $1000 in scholarship money as a freshman, so the net cost was less than $3500.

I was a chemical engineering major - which was in hot demand at the time. Recruiters visited the campus in droves and all you had to do to get an interview was stop by the campus recruiting office and sign up on the schedule. I recall one company with a facility in rural WV that spend the entire campus interview trying to entice me to come to the facility and interview. It was definitely a buyer's market.

I had a job lined up at least 6 weeks BEFORE graduation and my first year's salary was more than the cost of my entire college education. Admittedly this was peculiar to STEM majors and my friends who had liberal arts degrees had a harder row to hoe. But I think most people had a job within 3 months of graduation, if they had a decent GPA and hadn't majored in partying.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by The Wizard » Sat Feb 18, 2017 7:46 am

2pedals wrote:So many people buying things beyond their means. This makes me really sad. :(

I have no idea what other people's means are and I don't really have any concern about it.
I just focus on my own situation...
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by simmias » Sat Feb 18, 2017 7:52 am

cherijoh wrote:But I think most people had a job within 3 months of graduation, if they had a decent GPA and hadn't majored in partying.

Thankfully I only minored in partying.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by SleepKing » Sat Feb 18, 2017 7:55 am

SpecialK22 wrote:Interesting. I'm either a late Gen X or early Millennial depending on how it's defined, but I wonder how my generation will end up in middle age. Overpaying for college seems to be a major problem for many in my generation, but I admit that might just be anecdotal. It also reflects my own biases. Little expenditures add up, but it seems pale compared to spending late teens/early twenties effectively unemployed and racking up non-dischargeable debt. All for what is little more than an overpriced trade school.


I agree. So many friends have seemingly insurmountable student debt. average, at best, career prospects. Sadly, many seem fine with living in debt until thet die....new cars on credt, never paying off mortgage, etc.... and spend 'living in the present'. Wonder if this is a late x to millenial trait (obviously there are responsible subsets in any generation) but overall very concerning.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by cherijoh » Sat Feb 18, 2017 8:13 am

frugalecon wrote:This person made many mistakes, but at least she eventually analyzed her situation and implemented a realistic plan. I think that is an important lesson. Run the numbers and trust the math. There really aren't magical solutions to these problems. I have a friend in his mid-60s who has been intermittently and marginally employed for the last three years. He has burned through all of his savings, and every month is a struggle to cover his basic expenses. Unfortunately he hasn't been willing to abandon unrealistic thinking,


+1
I think that a lot of people were ill-prepared for the financial crisis and then compounded it by living in a state of denial for far too long.

It was also dependent on the items upon which people were over-spending. If your indulgences were a twice daily latte or eating out twice per week at upscale restaurants, you could change your behavior at any time - either by tapering off gradually or going cold turkey. Other expenses like expensive cable packages and gym club memberships could be easily cut when you finally woke up to the fact that this wasn't a short term blip. But if you were paying off last year's expenses via credit card debt or by taking out a 72-month car loan (or a 36-month car lease) it was much harder to turn that ship around. And of course so many people were living the high life by using their home equity as an ATM machine and were over-leveraged. So the housing crisis was amplified for them.

I had to shake my head at this section of the article:

The value of her house and savings surpassed $800,000, and she had an annual income of about $85,000 from various real-estate transactions.

Against the backdrop of the real estate boom, Ms. Wolf thought she would continue prospering financially into her 80s. She bought fur coats, designer handbags, furniture and, in the 2000s, a succession of upscale cars: BMW roadster, a Lexus 420 SL. She paid $17,500 to join the Spanish Bay club in nearby Pebble Beach.

“I was just playing being a rich person, I wasn’t rich,” Ms. Wolf said. “What you’re supposed to do with your money is sock it away. I didn’t.”

When the financial crisis struck, Ms. Wolf said it took her two years to curtail spending: “I had never been a budget person.”

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by fourwheelcycle » Sat Feb 18, 2017 8:16 am

Our son and his wife recently had their first baby (our first grandchild). She stopped working and they realized they had to start living on a careful budget.

When they sat down to put their first budget together, with a record of their previous expenses layed out in front of them, they were shocked to see how much they had been spending on restaurant meals and on drinks with friends at live music bars.

With the new baby they don't go out so much anyway. So far, they are doing OK on their new budget.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by BTDT » Sat Feb 18, 2017 8:34 am

Erwin wrote:There is nothing wrong with being a big spender if that is what you enjoy and you can afford it.


The problem being many 'big-spenders' are not saving for the future, nor recognize that as they age their 'working-value' rapidly deteriorates. :oops:
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by cinghiale » Sat Feb 18, 2017 8:36 am

Not to sidetrack this thread into a debate about higher education and colleague expenses, but there's a fairly simple (though not a fun) plan for getting a Bachelor's degree without ending up with a mountain of debt.

A prospective student could:
1) Stay at home for the first two years and attend the local junior college or community college.
2) Use public transportation to commute.
3) Actively seek financial aid and parlay very-good-to-excellent grades into financial aid at state school.
4) Transfer to state school that offers best financial aid and scholarship package. If best choice institution is close enough to home, continue living at home. Car may be purchased (or better, borrowed from parents), if car costs are less than on-campus living expenses.
5) If not, live on campus. Eat on campus. Do not own a car. Use weekends for study. Use public transportation or hitch ride with fellow students to get to/from home when home visits are needed.
6) Graduate in four years. Not five. Not six. Four. Graduate with high GPA.

Then, get a good job and see if your employer will provide some tuition assistance for graduate study...
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by dodecahedron » Sat Feb 18, 2017 8:43 am

frugalecon wrote:This person made many mistakes, but at least she eventually analyzed her situation and implemented a realistic plan. I think that is an important lesson. Run the numbers and trust the math. There really aren't magical solutions to these problems,


It is not clear to me how "realistic" her plan is. Moving out of a condo into a four bedroom house may not be sustainable, even though the house appeared to be much "cheaper" since the house is apparently not in good repair.

I have a large house, which is almost 80 years old, with almost three decades of memories of our family living here and which I love and hope to stay in for the rest of my life, but her story about drawing a bath her first night in the home only to have a disaster is a reminder that I need to budget for preventive maintenance and periodic unexpected disasters.

I have relatives and friends who made a very different choice. They chose to rent small but perfectly nice apartments in senior complexes operated by stable well run responsible nonprofit agencies. No maintenance headaches, good companionship with others also living on limited budgets, and a sliding scale rent based on income, modest rent even if at maximum income ineligible for subsidies. At times I think about the simplicity and placidity of their lives and wonder if I should make a different choice. (Sometimes I fantasize about really paring down and leading a very monastic existence. And maybe I will eventually do that some day. I feel fortunate to have assets allowing me choices.)

The OP tied the article into Bill Bernstein's LMP concept. The idea of an LMP is that living expenses are predictable. The problem is that they are not (e.g., homeowner disasters or landlords raising rents) so there need to be fallback plans.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by munemaker » Sat Feb 18, 2017 8:44 am

The Wizard wrote:
2pedals wrote:So many people buying things beyond their means. This makes me really sad. :(

I have no idea what other people's means are and I don't really have any concern about it.
I just focus on my own situation...


Generally I don't care about other people's situations. I have some close relatives that have moderate income and spend excessively. They openly say their motto is "You can't take it with you." I am concerned for them. I am sure they think we are nuts for living so conservatively.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by livesoft » Sat Feb 18, 2017 8:47 am

The woman in the linked article did GREAT! She lived the California Dream while younger with a low income job, then retired to Iowa where her last check will bounce just as she passes away. Many people wish they could live such a life! Give her credit because she has done really well.

She may live like Mr Money Mustache now, but she lived much much better than he does for many years. She should start a blog.
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by Tycoon » Sat Feb 18, 2017 8:53 am

motorcyclesarecool wrote: Let's face it, Bogleheads are a weird sort, compared to the society at large.


I see the opposite. The others are weird for not doing the math.
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by ny_rn » Sat Feb 18, 2017 8:58 am

This story reminds me of why I started what I call my personal "latte contribution schedule." For this exact reason, I set up a automatic contribution ($40) into my taxable account (100% vtsax) on a weekly basis. I love coffee, but I "try" to make my own or buy $1 coffee from a bodega. I do enjoy a latte 1-2x per week though.

I know I'm weird, but whatever. Maybe I can buy coffee everyday for the rest of my life in retirement (30+ years).

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by RadAudit » Sat Feb 18, 2017 9:01 am

livesoft wrote: Give her credit because she has done really well.


And, she probably has a higher credit rating than folks who live frugally and pay cash for stuff other people finance.
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by Watty » Sat Feb 18, 2017 9:05 am

motorcyclesarecool wrote: Let's face it, Bogleheads are a weird sort, compared to the society at large.


Bogleheads may try to invest better but there are are a lot of financially responsible people so in that aspect we are not that unusual.

A lot of people that are doing well just don't flaunt it. I think it was in the book "The millionaire next door" that the author pointed out that the vehicle that is most typically driven by a millionaire is a pickup truck and not even a fancy pickup truck.

One metric you can look at is home ownership. About a third of homes are owned without a mortgage. That is not as good as it might sound because a lot of people are renters but that is still a lot of people that are likely doing pretty well.

When you consider that a lot of the homes are owned by people in their 40's or younger that will be able to have their homes paid off before they retire that increases the the number of people that are likely more than OK.

That said there will always be people that get into trouble by living above their means or but having low earnings but that isn't anything new to the baby boomers like the article suggested in its title.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by flyingaway » Sat Feb 18, 2017 9:22 am

SpecialK22 wrote:Interesting. I'm either a late Gen X or early Millennial depending on how it's defined, but I wonder how my generation will end up in middle age. Overpaying for college seems to be a major problem for many in my generation, but I admit that might just be anecdotal. It also reflects my own biases. Little expenditures add up, but it seems pale compared to spending late teens/early twenties effectively unemployed and racking up non-dischargeable debt. All for what is little more than an overpriced trade school.


I am a professor and I see the rising of cost of education these days. Tuitions and expenses are up quickly, because the students can "afford" the cost. Why? Every students are encouraged to seek every available "financial aids", and these aids, mostly loans, are readily available. Even kids from rich families are told to get maximum loans for their medical school education, because they can have the loans written off if they will work in public sectors for 10 years.
The student dorms have been built like hotels. Universities are becoming the places that students enjoy their educational experience, never mind what they actually learn there.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by sunny_socal » Sat Feb 18, 2017 9:29 am

Someone mentioned it's sad to see people not saving. The only sad part is that us savers must one day bail them out!

cinghiale wrote:Not to sidetrack this thread into a debate about higher education and colleague expenses, but there's a fairly simple (though not a fun) plan for getting a Bachelor's degree without ending up with a mountain of debt.

A prospective student could:
1) Stay at home for the first two years and attend the local junior college or community college.
2) Use public transportation to commute.
3) Actively seek financial aid and parlay very-good-to-excellent grades into financial aid at state school.
4) Transfer to state school that offers best financial aid and scholarship package. If best choice institution is close enough to home, continue living at home. Car may be purchased (or better, borrowed from parents), if car costs are less than on-campus living expenses.
5) If not, live on campus. Eat on campus. Do not own a car. Use weekends for study. Use public transportation or hitch ride with fellow students to get to/from home when home visits are needed.
6) Graduate in four years. Not five. Not six. Four. Graduate with high GPA.

Then, get a good job and see if your employer will provide some tuition assistance for graduate study...


That's exactly my plan. I've saved up enough so my kids can get a decent education at a state school but there's no way I'm sending them to a private university.

livesoft wrote: The woman in the linked article did GREAT! She lived the California Dream while younger with a low income job, then retired to Iowa where her last check will bounce just as she passes away. Many people wish they could live such a life! Give her credit because she has done really well.


She did survive the ordeal. I'm living the CA dream but I can already see myself moving "inland" to lower the cost of living (and I anticipate my career coming to an end as tech jobs move to China/India.) I don't want my kids to fight the CA housing and job market, they'll do better elsewhere.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by Tycoon » Sat Feb 18, 2017 9:37 am

flyingaway wrote:
SpecialK22 wrote:Interesting. I'm either a late Gen X or early Millennial depending on how it's defined, but I wonder how my generation will end up in middle age. Overpaying for college seems to be a major problem for many in my generation, but I admit that might just be anecdotal. It also reflects my own biases. Little expenditures add up, but it seems pale compared to spending late teens/early twenties effectively unemployed and racking up non-dischargeable debt. All for what is little more than an overpriced trade school.


I am a professor and I see the rising of cost of education these days. Tuitions and expenses are up quickly, because the students can "afford" the cost. Why? Every students are encouraged to seek every available "financial aids", and these aids, mostly loans, are readily available. Even kids from rich families are told to get maximum loans for their medical school education, because they can have the loans written off if they will work in public sectors for 10 years.
The student dorms have been built like hotels. Universities are becoming the places that students enjoy their educational experience, never mind what they actually learn there.


Hear, hear.
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by HomerJ » Sat Feb 18, 2017 9:45 am

frugalecon wrote:This person made many mistakes, but at least she eventually analyzed her situation and implemented a realistic plan. I think that is an important lesson. Run the numbers and trust the math. There really aren't magical solutions to these problems. I have a friend in his mid-60s who has been intermittently and marginally employed for the last three years. He has burned through all of his savings, and every month is a struggle to cover his basic expenses. Unfortunately he hasn't been willing to abandon unrealistic thinking,


This. See how she bought a 4-bedroom house in the Midwest for $70,000. There are perfectly nice places in this country where one can live very cheaply.

House was bigger for 1/3 the price, and property taxes were 25% as high.

With a paid off house in a LCOL area, one can easily live on Social Security and minimal savings. I mean, at that point, all you need is food and utilities, which isn't expensive. Unknown medical care costs is the main problem.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by cinghiale » Sat Feb 18, 2017 10:10 am

I am a professor and I see the rising of cost of education these days. Tuitions and expenses are up quickly, because the students can "afford" the cost. Why? Every students are encouraged to seek every available "financial aids", and these aids, mostly loans, are readily available. Even kids from rich families are told to get maximum loans for their medical school education, because they can have the loans written off if they will work in public sectors for 10 years

This reply is a bit of a jumble. For many state schools, tuition is up because the state in question has withdrawn its support. Paying college tuition is seen in more and more states as a user fee rather than something the state should subsidize. Thus, state support as a percentage of many state institutions' budget has plummeted. Medical schools and other graduate programs are a separate matter, though rich kids aren't going into medicine any longer. I'm generalizing here, but medicine is not perceived as a prestige job anymore. Liability issues are ever-present, burnout is high, and carriers in business or law look more appealing.
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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by petulant » Sat Feb 18, 2017 10:11 am

flyingaway wrote:
SpecialK22 wrote:Interesting. I'm either a late Gen X or early Millennial depending on how it's defined, but I wonder how my generation will end up in middle age. Overpaying for college seems to be a major problem for many in my generation, but I admit that might just be anecdotal. It also reflects my own biases. Little expenditures add up, but it seems pale compared to spending late teens/early twenties effectively unemployed and racking up non-dischargeable debt. All for what is little more than an overpriced trade school.


I am a professor and I see the rising of cost of education these days. Tuitions and expenses are up quickly, because the students can "afford" the cost. Why? Every students are encouraged to seek every available "financial aids", and these aids, mostly loans, are readily available. Even kids from rich families are told to get maximum loans for their medical school education, because they can have the loans written off if they will work in public sectors for 10 years.
The student dorms have been built like hotels. Universities are becoming the places that students enjoy their educational experience, never mind what they actually learn there.


If I was an artist I would draw a cartoon with a big, bad federal student aid bureaucrat dumping gold coins in a machine that says "Government-University Complex" and out pops little gold shackles being put on kids.

Too bad my university education didn't equip me to draw political cartoons. ;)

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by petulant » Sat Feb 18, 2017 10:17 am

cinghiale wrote:
I am a professor and I see the rising of cost of education these days. Tuitions and expenses are up quickly, because the students can "afford" the cost. Why? Every students are encouraged to seek every available "financial aids", and these aids, mostly loans, are readily available. Even kids from rich families are told to get maximum loans for their medical school education, because they can have the loans written off if they will work in public sectors for 10 years

This reply is a bit of a jumble. For many state schools, tuition is up because the state in question has withdrawn its support. Paying college tuition is seen in more and more states as a user fee rather than something the state should subsidize. Thus, state support as a percentage of many state institutions' budget has plummeted. Medical schools and other graduate programs are a separate matter, though rich kids aren't going into medicine any longer. I'm generalizing here, but medicine is not perceived as a prestige job anymore. Liability issues are ever-present, burnout is high, and carriers in business or law look more appealing.


I disagree with your take on state schools. The flagship public university in my state was $7000 per year when I was studying there in the late 2000s. It is now over $10000 per year. The state government hasn't dropped support materially, nor has it increased support. At the same time, the university's enrollment has grown closer and closer to 50% out-of-state.

The reason it's going up? Out-of-state tuition income is up, state aid isn't down. The only answer is expenses are up.

And you know what? Just like the professor said, new buildings all over campus, including hotel-like dorms; the university is dabbling in real estate all around campus; and we've got a student counseling office for almost every sociopolitical grouping you can think of. Do-nothing academic counselors across several different programs to give you bad advice navigating your degree sheet. Computer labs full of iMacs and do-nothing lab monitor employees.

All very unBH.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by beezquimby » Sat Feb 18, 2017 10:24 am

I think we need to cool it with the judgmental and condescending posts.

I actually think the take home message is you can live a rich and nice lifestyle and things will probably still work out just fine.

It looks like she is doing fine- from the picture it looks like she has a nice place.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by Constant Chaos » Sat Feb 18, 2017 10:51 am

I commend the subject of the piece for realizing she needed to retrench. I have a parent living in a somewhat HCOL area (not anywhere near CA standards) in the Midwest who is desiring a better climate and much lower property taxes. We are grappling with the trade offs-- lower cost of living and warmer winters vs. being far away from friends and family as one ages and perhaps needs to rely on them more than ever.

I wish the article would have gone into more detail regarding Ms. Wolf's decision to move to a tiny town in Iowa. The climate change alone must be a shock. And all the maintenance required on a single family home, when she had been used to condo living! I am very curious why Ms. Wolf did not choose a condo in a somewhat more temperate state, closer to CA? Was there nothing in AZ, NM, NV etc?

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by kjvmartin » Sat Feb 18, 2017 11:00 am

cinghiale wrote:Not to sidetrack this thread into a debate about higher education and colleague expenses, but there's a fairly simple (though not a fun) plan for getting a Bachelor's degree without ending up with a mountain of debt.

A prospective student could:
1) Stay at home for the first two years and attend the local junior college or community college.
2) Use public transportation to commute.
3) Actively seek financial aid and parlay very-good-to-excellent grades into financial aid at state school.
4) Transfer to state school that offers best financial aid and scholarship package. If best choice institution is close enough to home, continue living at home. Car may be purchased (or better, borrowed from parents), if car costs are less than on-campus living expenses.
5) If not, live on campus. Eat on campus. Do not own a car. Use weekends for study. Use public transportation or hitch ride with fellow students to get to/from home when home visits are needed.
6) Graduate in four years. Not five. Not six. Four. Graduate with high GPA.

Then, get a good job and see if your employer will provide some tuition assistance for graduate study...


1. You're assuming all kids have a home they can return to or stay at. Some kids do not have welcoming or supportive environments.

2. You are assuming all kids live in areas where public transportation is an option. Some live in rural or suburban areas where there is no public transportation.

3. You are assuming that these kids, some without supportive parents and good homes, will then obtain excellent grades. Average students need avenues to success as well.

I could go on, but there are a lot of non-cookie-cutter situations out there.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by randomguy » Sat Feb 18, 2017 11:21 am

Constant Chaos wrote:I commend the subject of the piece for realizing she needed to retrench. I have a parent living in a somewhat HCOL area (not anywhere near CA standards) in the Midwest who is desiring a better climate and much lower property taxes. We are grappling with the trade offs-- lower cost of living and warmer winters vs. being far away from friends and family as one ages and perhaps needs to rely on them more than ever.

I wish the article would have gone into more detail regarding Ms. Wolf's decision to move to a tiny town in Iowa. The climate change alone must be a shock. And all the maintenance required on a single family home, when she had been used to condo living! I am very curious why Ms. Wolf did not choose a condo in a somewhat more temperate state, closer to CA? Was there nothing in AZ, NM, NV etc?


There are also a zillion places in CA that are cheap. Move inland 100 miles and it is a vastly different property world than the costal regions. Might not be as cheap as Iowa. There could be a reason but she might have just gotten it into her head that this was the thing to do.

With stats, I always wonder about about the details. Are people holding auto debt and mortgages because they don't have the money or becasue it is the smart thing to do? I had auto debt for a while because it was .9%. And my dad decided not to pay off the mortgage because he could get a 3% mortgage when they moved to their retirement home. He choose to invest his prior house money. As far as student loans, I am guessing the growth is largely a result of starting from a small base. Yes there are some people making poor choices (lets go to law school at 50) but I doubt it is a ton of people.

It is always easy to come up with schemes to do things cheapier. It isn't always clear how applicable they are. Not to pick on a post

A prospective student could:
1) Stay at home for the first two years and attend the local junior college or community college.
2) Use public transportation to commute.
3) Actively seek financial aid and parlay very-good-to-excellent grades into financial aid at state school.
4) Transfer to state school that offers best financial aid and scholarship package. If best choice institution is close enough to home, continue living at home. Car may be purchased (or better, borrowed from parents), if car costs are less than on-campus living expenses.
5) If not, live on campus. Eat on campus. Do not own a car. Use weekends for study. Use public transportation or hitch ride with fellow students to get to/from home when home visits are needed.
6) Graduate in four years. Not five. Not six. Four. Graduate with high GPA.


1) Sure. But this might make graduating in 4 years hard. Getting credits to transfer and meet degree programs is hard. Remember the opportunity cost of not graduating might be 60k+/year
2) I would have had to walk 4 miles to get to the nearest public transit. Then it would have been a 1 hour ride to the community college. You can do the math on how much that would cost
3) Yes but how many kids does this apply to. Top 10-20%? Doesn't help the majority of kids who are average.
4) See 3. For top 5% or so kids this is an issue. Go to the good school that offers no money or the school that offers cash. For the average kid, nobody wants them enough to make good deals:)
5) You are looking at minor differences.
6) definitely. But as I said 1 makes this an issue.

But yeah school doesn't have to be crazy expensive. The state schools are ~80k in my state. That isn't a lot of money. Say 30k from working (other money for taxes/personal spending), 10k of tax credit and your graduating with 40k in debt. Get a job paying 15k more than one without a degree and it pays for itself in no time. Get any money from your parents/grants/... and it is even better. You need to go down the private school, 6 year plan, not working, grad school,... path to end up with crippling debt.

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Re: "With $15 Left in the Bank, a Baby Boomer Makes Peace With Less" -- A cautionary tale

Post by LadyGeek » Sat Feb 18, 2017 11:51 am

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