Proof is in the Prudence

I’m starting a new series where I’m interviewing people who are older- I mean- more experienced with personal finance. Specifically, people in (or very near) retirement and their views on money. I kick things off with an interview with Teacher4Life (T4L) who has recently semi-retired teaching in her 50’s. Overall, her views show that she is content with her past financial choices and that prudence can pay out as a comfortable middle-class life.

SCS: When you were 26-years-old how did you view money?
T4L: At 26 I was already married and we were living in our first house. We had borrowed money from my mother-in-law to make the down payment on it and to pay her back we used an "official" payment booklet. We budgeted, but we felt like we were living on easy street because we had two incomes. Both of us were already saving for retirement in a TSA*. We also put money into an "unexpected" expenses account for annual expenses like property taxes, car and house insurance, and anything else that might pop up.

* The 403(b) plan, often referred to as a tax-sheltered annuity (TSA), was created in 1958 specifically to give teachers and employees of other nonprofit organizations the opportunity to save money on a tax-deferred basis. It's like the 401(k) plans available to private-sector workers, but with fewer regulatory controls (WEA Trust)

SCS: When you were 26-years-old how did you view wealth?
T4L: Wealth – hmmm… I don't think I thought much about this. I knew that we were middle-class and were perfectly happy with that. We were "wealthy" in our happy home.

SCS: How do you think of money now?
T4L: We are reaping the benefits of our early good planning. We still try not to have two car payments at a time. Our car loans are always for the shortest amount of time which makes our payments higher, but the overall outlay is less. We still try to pay off the credit card each month. Being in semi-retirement is letting me ease into really being home and the money I make is going to our travel fund.

Our mortgage is paid though we are carrying an equity line. There is an automatic interest payment taken out of our checking account, but we make a minimum of $1,000 a month on the principal also. At the end of the month I just transfer any money left in that account over as extra principal payment.

I no longer have a budget!

SCS: How do you think of wealth now?
T4L: I feel we are wealthier now due to having a great house that we can afford to remodel as we like. Home ownership is wealth to me because it is security. We have physical proof of our working days. Also, though I still shop sales, I'm willing to spend more on good quality clothes and shoes. We can buy whatever we really want, but our wants are not outlandish. Part of our wealth is the fact that my husband is Mr. Fixit. We have always saved money because he can fix just about anything so we didn't have to pay a serviceman.
I think monetary wealth is being able to meet your wants and needs without accruing debt. Your assets should be much more than your debt.

SCS: What events in your life shaped your current beliefs about personal finances?
T4L: Education was always paramount in my family! Having a mother and grandmother who were college-educated helped drive me to go to college in an age when most women were stay-at-home mothers.

I always knew that I would be responsible for a good part of the costs of college due to being the third child in my family to be in college at the same time. Accepting responsibility by working part time and getting a state scholarship made me feel good about myself. I like being a responsible person and I think that carried over to personal finance. Reality has a way of developing responsibility. I also made a good choice when I married my husband.