AARP says there are seven common mistakes older adults make with their money.
Elise Amendola/AP file photo
My favorite magazine is AARP.
I don’t scan it. I devour it. Not only is the magazine relevant to what’s happening in my life, it is entertaining.
After all, what 70-something-year-old woman doesn’t enjoy reading about Robert De Niro’s private life or the “Sex Secrets of Extremely Happy Couples?”
The February/March edition is particularly helpful.
It’s about safeguarding your personal finances.
While most of us won’t retire as millionaires, we’ve worked too hard to see our savings in the hands of scammers or wasted on poor financial choices.
I was reading the magazine when I came across “7 Things NOT To Do to Stay Financially Healthy.”
I couldn’t believe it.
After reading the article, I discovered I made four financial mistakes.
Mistake: “Shower the people you love with money”
“It can be hard to tell relatives that you have to rein in your giving,” said Lena Haas, head of wealth management advice and solutions at Edward Jones, in the AARP article. “Sit down with your family before there is a crisis, and be honest about what aid you can give.”
As the eldest of several siblings, I’ve played the savior for a large part of my life. Now that I am the matriarch of my family, there is even more of an expectation that I’ll help out financially in a crisis.
That won’t change.
As a successful Black woman, supporting family members is a given. What will change, however, is my habit of giving large monetary gifts to make up for my failure to spend time with the people I care about.
As they say, time is money, but money can’t make up for time.
Mistake: “Lap up the luxury”
“Before you spring for that European sports car or total kitchen makeover, calculate how much you’ll need to live comfortably,” the article stated.
That’s the truth.
Because I remembered the sting of a supervisor telling me I would never be able to afford a Saab convertible, my idea of retirement was driving off into the sunset in a luxury car.
I got that Saab convertible decades ago.
But spending retirement money on one big luxury item turned out to be a dumb idea.
I now drive a vehicle with enough bells and whistles to make my head spin.
But what I needed was a cool car with a CD player.
Mistake: “Panic about investments”
For investment advice, AARP turned to Meir Statman, a professor of finance at Santa Clara University and author of “Finance for Normal People.”
“People tend to assume that what is going up or down will continue,” Statman said. “Use a two-week cooling-off period before you buy or sell.”
I warn new investors to avoid watching the market’s ups and downs daily. It could be bad for your mental health.
When I entered the market, I had no idea what I was getting into. All I knew, really, was that I had a 401(k) plan that I needed to roll over somewhere. I didn’t know the plan’s value could fluctuate — sometimes wildly.
I’m grateful that my financial adviser kept me from bailing out when the market sank.
Mistake: “Spend on autopilot”
According to AARP, “in 2022, C+R Research surveyed people who thought they were spending an average of $89 a month on subscriptions. But a review of their bills found they were actually spending $219 a month.”
For me, tax season is a wake-up call. I’m always astounded by how quickly the subscriptions and streaming services can add up. Because of rampant fraud, I’m also paying closer attention to my credit card statements.
The article also told seniors to make minor home repairs to prevent more expensive ones down the road and to get rid of items you really don’t need to avoid expensive storage costs. AARP also advised seniors to keep up with preventive health care to help to curb expensive medical care expenses.
As a senior, I’m developing a new relationship with my money — and AARP.