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Are you prepared to sidestep financial pitfalls in retirement? Join Ralph Estep, Jr., and learn how to break bad money habits and enjoy a blissful retirement.
In this episode of the Ask Ralph Podcast, host Ralph Estep, Jr., a financial professional with over 30 years of experience, discusses common financial missteps retirees often make and provides practical strategies to avoid them. The episode focuses on five key bad habits: splurging on travel, enabling adult children, carrying debt into retirement, supporting unhealthy adult relationships, and compulsive shopping. Ralph also offers actionable tips to manage these issues, emphasizing the importance of wise financial stewardship from a Christian perspective. Additionally, listeners are encouraged to join the podcast’s Facebook insider's group for continued discussion and support.
00:00 Introduction and Episode Overview
00:20 Welcome to the Ask Ralph Podcast
00:52 Motivational Monday and Show Announcements
01:15 The Importance of Avoiding Bad Money Habits
03:32 Bad Habit #1: Splurging on Travel
04:48 Bad Habit #2: Supporting Adult Children
06:25 Bad Habit #3: Carrying Debt into Retirement
08:33 Bad Habit #4: Supporting Unhealthy Adult Relationships
10:46 Bad Habit #5: Compulsive Shopping
13:08 Recap and Final Thoughts
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Ralph:
Well, here's the question for today.
Ralph:
Folks, do you cringe when you see your retired friends or maybe even your own parents?
Ralph:
spending recklessly.
Ralph:
Are you worried about falling into those same money traps when you retire?
Ralph:
Well on today's show, we're going to cover some financial bad habits and more importantly, how to avoid them.
Ralph:
So stay tuned for a very Frank discussion.
Intro:
Welcome to the Ask Ralph Podcast, where listening to an experienced financial professional with over 30 years of experience can help you make sense of confusing questions, current headlines, and industry trends about taxes, small business, financial decision making, investment strategies, and even the art of proper budgeting.
Intro:
Ask Ralph makes the complex simple by sharing his real world knowledge from a Christian perspective with all things financial.
Intro:
Now here's your host, Ralph Estep, Jr.
Ralph:
Welcome to our motivational Monday show.
Ralph:
I'm so glad you chose to join us.
Ralph:
I just want to thank you for listening and more importantly, supporting the program.
Ralph:
I'm coming to you today from the Estep farm and the Saggio accounting studio.
Ralph:
Let me put on my podcaster hat put down those overalls and let's push that adding machine to the side.
Ralph:
Let's get into some financial wisdom from a Christian perspective.
Ralph:
In today's episode, we're going to uncover some of the most common, bad money habits that can truly plague retirees.
Ralph:
And these are things you're going to want to avoid yourself.
Ralph:
Then we'll explore some practical strategies to break negative patterns and maintain wise stewardship well into your golden years.
Ralph:
Well don't forget to subscribe to the show and join our email list.
Ralph:
You do that at askralphpodcast.com . So you don't miss tomorrow show.
Ralph:
For our technology Tuesday show, we're going to talk about some steps you can take to declutter your digital life.
Ralph:
Yes.
Ralph:
You heard me right?
Ralph:
Declutter your digital life.
Ralph:
We all need some digital cleansing and tomorrow I'll share some great ideas on how to do that.
Ralph:
We also just launched an insider's group on Facebook and boy is it growing.
Ralph:
And I encourage each of our listeners to join the group, to continue the conversation from the show.
Ralph:
It's a great place to share ideas for the show.
Ralph:
And we've had some great discussions out there already.
Ralph:
It's a place to talk about your triumphs and also the things that are challenging.
Ralph:
You.
Ralph:
I have a link in the show notes day.
Ralph:
So I encourage you to join.
Ralph:
Let's kick things off with Proverbs chapter 21, verse 20, which reminds us that precious treasure.
Ralph:
And also oil are in a wise man's dwelling, but a foolish man devours it.
Ralph:
I believe we've used that one before, but it's very appropriate today.
Ralph:
So first let's answer a basic question.
Ralph:
Why is this topic so critical?
Ralph:
Well, simply put my friend's retirement is an expensive phase of life that can truly span decades.
Ralph:
When I was preparing today, I found this the average American retirement last 18 years.
Ralph:
So even with a decent nest egg, and unfortunately, a lot of people don't have that.
Ralph:
And social security or a pension you'll need to carefully manage your resources.
Ralph:
Otherwise you risk outliving your savings in just a few years of careless spending.
Ralph:
Unfortunately, I think we all have seen stories of when this happens.
Ralph:
This issue hits close to home for me.
Ralph:
I've witnessed dear older friends cashing out their 401ks or running up those credit card debt.
Ralph:
To support, truly unrealistic lifestyles and my friends.
Ralph:
It's heartbreaking.
Ralph:
I want so much better for all of you.
Ralph:
My valued listeners.
Ralph:
So here's the truth.
Ralph:
with a bit of education self-discipline and God's guidance.
Ralph:
You can avoid financial pitfalls and enjoy a truly prosperous.
Ralph:
And wonderful retirement.
Ralph:
So let's explore five bad money habits that can sink retirees.
Ralph:
So, you know what to watch out for
Ralph:
the number one habit is this.
Ralph:
Splurging on travel.
Ralph:
Being Footloose and fancy free in retirement can be alluring.
Ralph:
And far flung adventures, often top retirement bucket lists.
Ralph:
But extensive travel, especially abroad is incredibly expensive for retirees living on fixed incomes.
Ralph:
Even domestic travel adds up quickly when you do it for weeks or months at a time.
Ralph:
Things like fuel hotels, entertainment, and eating out drain travel budgets fast, not to mention the incidentals like souvenirs, you got to bring something home for the grandkids.
Ralph:
How about illnesses, losing things in weather delays.
Ralph:
So, how can you indulge in your wunderlust without sabotaging your financial plan?
Ralph:
So Ralph, how do you do that?
Ralph:
Well, here's the first action step.
Ralph:
I always like to give you things that you can use.
Ralph:
Set a reasonable annual travel budget that aligns with the retirement plan and stick to a diligently.
Ralph:
You gotta be selective about trips and watch expenses closely while you're traveling.
Ralph:
Consider cheaper destinations scale back trips, house swaps.
Ralph:
Budget lodging and avoiding peak seasons.
Ralph:
To be honest with you folks, as I get older, I like to avoid those anyway.
Ralph:
So let's move on to bad habit.
Ralph:
Number two.
Ralph:
This one is going to cause some discussion.
Ralph:
And that's supporting adult children.
Ralph:
As parents, we want to help our children succeed in life.
Ralph:
But continuing financial support after they become independent adults can foster unhealthy dependence.
Ralph:
I have seen this.
Ralph:
So many times I've seen it completely.
Ralph:
Decimate clients.
Ralph:
It also jeopardizes your own retirement.
Ralph:
That's the whole point.
Ralph:
many retirees who pay for their adults, kids expenses out of guilt or some sense of parental duty things like cell phone bills, rent, car loans, spending money, vacations, weddings, tutoring, or private schools for the grandkids.
Ralph:
We can make a list a mile long.
Ralph:
Often a support has no end date.
Ralph:
This leads to ongoing strain and it breaks down the relationship, but more importantly, breaks down the finances.
Ralph:
So here's another action step.
Ralph:
You've got to have candid conversations with financially independent children about gradually weaning off support.
Ralph:
When they were little ones, you wean them away.
Ralph:
You wanted them to be independent.
Ralph:
Well, guess what folks.
Ralph:
They need to be independent in their adulthood.
Ralph:
You've got to set reasonable timelines and boundaries.
Ralph:
Redirect gifts to education funds for the grandkids and stick to your guns.
Ralph:
That's the key to this.
Ralph:
Don't let them break you down.
Ralph:
Well, meaning sacrifice can still be foolish over indulgence that harms everyone in the long run.
Ralph:
It harms you financially.
Ralph:
And you're making them dependent on you for life.
Ralph:
What happens when you're gone?
Ralph:
What are they going to do then?
Ralph:
So let's move on to bad habit, three.
Ralph:
And that's carrying debt into retirement.
Ralph:
It's staggering.
Ralph:
How many Americans enter retirement, still saddled with debt.
Ralph:
I see clients in their late sixties, early seventies with 30 year fixed rate mortgages.
Ralph:
And they still got 29 or 28 years left on it.
Ralph:
In fact, here's a sobering statistic.
Ralph:
The average retiree today carries $86,068 in debt.
Ralph:
Now, of course that's mostly mortgages, but it's also credit cards, auto and personal loans.
Ralph:
Servicing debt is challenging on a limited income.
Ralph:
It often forces drastic lifestyle cutbacks.
Ralph:
These debts also press retirees to take greater portfolio risk, hoping for higher investment returns.
Ralph:
This gamble can backfire disastrously in market downturns.
Ralph:
I think about it like this.
Ralph:
If you're young, you've got plenty of time for recovery.
Ralph:
If the market tanks.
Ralph:
But if you're not, you don't have that time.
Ralph:
Carrying debt loads robs us, not only financially, but emotionally and spiritually as well.
Ralph:
There is wonderful freedom.
Ralph:
When we walk in God's blessings of prosperity and get to bless others, because we are debt free.
Ralph:
I've said this a time or two on the show.
Ralph:
You will never be able to bless others if you're not financially prosperous yourself.
Ralph:
So you've got to pay attention to that.
Ralph:
So that leads me to another action step.
Ralph:
And that's this make paying off all consumer debt before retirement, a top priority.
Ralph:
I would even venture to say, maybe you shouldn't retire until it's all paid off.
Ralph:
Well, you might ask Ralph, how do I do that?
Ralph:
It's not rocket science.
Ralph:
It's important to create a payoff plan.
Ralph:
Trim your expenses.
Ralph:
Pick up extra work if needed.
Ralph:
Sell assets, maybe you need to downsize and pour every spare cent toward becoming debt-free.
Ralph:
Start with the smallest debts first for early wins.
Ralph:
Then plow ahead without compromise.
Ralph:
You're going to thank yourself in just a few short years when you are completely debt-free.
Ralph:
Well now let's didiscussad habit, number four.
Ralph:
And that's supporting unhealthy adult relationships.
Ralph:
I have seen this with my clients.
Ralph:
And it's sad.
Ralph:
But it's true.
Ralph:
Loneliness causes some retirees to settle for companions that slowly drain their finances.
Ralph:
Whether due to desperation.
Ralph:
Naivete or impulsive judgment calls, retired folks can fall victim to financial abuse in dysfunctional relationships.
Ralph:
I have seen this firsthand.
Ralph:
And it is brutal.
Ralph:
These red flags include controlling partners who restrict access to money.
Ralph:
Thin official relationship statuses.
Ralph:
Shady background addictions.
Ralph:
Pervasive money problems refusal to work, erratic behavior.
Ralph:
And isolation from friends or family.
Ralph:
I'm sure you could name an about 10 others.
Ralph:
Regardless of the circumstances though, it's never wise for retirees to fully financial support.
Ralph:
Another able-bodied adult or take on unreasonable financial risk for another's benefit.
Ralph:
We got to safeguard resources for our own care first.
Ralph:
And I'm not saying to you to be selfish.
Ralph:
But you've got to pay attention to this.
Ralph:
I don't know how many people I've met.
Ralph:
They want to help people.
Ralph:
They want to save people.
Ralph:
They want to change people.
Ralph:
But you've got to be financially secure before you even try to do that.
Ralph:
So here's another action step.
Ralph:
Proceeds slowly and cautiously if entering a new relationship in retirement.
Ralph:
Watch for those red flags of financial abuse.
Ralph:
Unfortunately, there are people out there that are looking for what I've heard, the term sugar daddy.
Ralph:
To take care of them.
Ralph:
And they prey on these people because maybe they lost a spouse.
Ralph:
Maybe they're lonely.
Ralph:
Maybe they're having health issues.
Ralph:
You just got to have your antenna up.
Ralph:
And what goes along with this, it never add new names to assets right away.
Ralph:
Maintain separate household finances until relationships prove healthy over significant time.
Ralph:
And here's the deal folks.
Ralph:
Stay connected with trusted family and friends for gut checks.
Ralph:
And most importantly, seek guidance through prayer on when and how much to reasonably share.
Ralph:
And now on to our final habit.
Ralph:
Number five.
Ralph:
Compulsive shopping.
Ralph:
This one is really rough.
Ralph:
It's disheartening to watch fixed income retirees, fritter away, money on frivolous shopping excursions.
Ralph:
Storage lockers crammed with unused stuff, home shopping cable channels blaring 24 7.
Ralph:
Or garage sales every weekend.
Ralph:
I did a show a few weeks ago about these soft storage units.
Ralph:
And I would encourage you to go back and listen to it.
Ralph:
If you haven't already, what a waste of money.
Ralph:
While anxiety, depression, hoarding tendencies, or simply loneliness can drive compulsive consumption.
Ralph:
The root cause is, often an unwillingness to accept the constraints of living on a retirement income.
Ralph:
One of the things I think of my clients that are successful in managing retirement finances.
Ralph:
Is they've been able to understand and accept the constraints they live under.
Ralph:
If you don't do that.
Ralph:
This can become a huge problem.
Ralph:
Unfortunately, our consumer culture feeds the myth that lavish living standards should continue indefinitely after retiring.
Ralph:
That's why so many folks find themselves staring at decimated savings and struggling to make ends meet just a few years into retirement.
Ralph:
I've seen this so many times, but it doesn't have to be this way.
Ralph:
So let's discuss our final action step.
Ralph:
You've got to reframe your mindset from keeping up with consumer culture, to finding meaning and fulfillment by simplifying and sparking joy in what you already own.
Ralph:
Adopt an attitude of wise contentment.
Ralph:
Then get support to address any underlying issues, feeding, unhealthy attachment to possessions or shopping.
Ralph:
Establish and stick to a reasonable spending budget that respects your IRA withdrawal rates.
Ralph:
And preserves your nest egg through your later years, you've got to do a reality check.
Ralph:
You've got to have that meeting with yourself or meeting with your spouse and say, look, here's what we can truly afford.
Ralph:
Here's how we can live.
Ralph:
Quite a reality check.
Ralph:
Right?
Ralph:
I told you it's going to be rough.
Ralph:
But I hope shining light on these common pitfalls before you retire will help all of my listeners avoid falling into these traps.
Ralph:
Remember what I said?
Ralph:
Proverbs chapter 21.
Ralph:
Verse 20 says.
Ralph:
Treasure is for the wise, but fools devour it.
Ralph:
I know you all have the wisdom to steer clear these traps and enjoy a fruitful stewardship of the wonderful retirement.
Ralph:
God intends for you.
Ralph:
So let's recap the key mistakes we covered today.
Ralph:
And the first one was this splurging excessively on travel.
Ralph:
Number two was enabling destructive dependence of adult children rather than empowering your self sufficiency.
Ralph:
Number three was carrying heavy debt loads like mortgages and credit cards into retirement.
Ralph:
And number four, financially supporting unhealthy adult relationships and risking abuse.
Ralph:
And last but not least number five was compulsive frivolous over consumption.
Ralph:
That decimate your retirement savings.
Ralph:
Along the way we shared some practical strategies to course correct.
Ralph:
And cultivate wise money management as retirees.
Ralph:
But don't just take my word for it.
Ralph:
Continue growing your own financial wisdom through prayer.
Ralph:
I can't stress that enough.
Ralph:
If you're struggling financially, pray about it.
Ralph:
attend biblical studies and find trusted advisors that will help you.
Ralph:
Stay connected in your community for accountability.
Ralph:
Maybe you find an accountability partner and support your retirement journey as well.
Ralph:
I strongly encourage all of our listeners to head, to askralphpodcast.com and check out all of the resources we have on our site.
Ralph:
I don't know if you know this or not.
Ralph:
We have a catalog of over 400 episodes.
Ralph:
And you can even purchase my book, mastering your finances right there on the site.
Ralph:
So lastly, I'd love to hear your biggest takeaways on the Ask Ralph podcast insiders group, Facebook page.
Ralph:
I mentioned that I have a link to that in the notes.
Ralph:
What retirement money habits will you be most mindful to avoid?
Ralph:
Share your action plan, share your ideas and encouragement with our community so we can all pursue fruitful stewardship.
Ralph:
And remember when it comes to taming bad money habits, we don't have to rely on sheer willpower alone.
Ralph:
Truth is folks, you probably not going to be able to do it yourself.
Ralph:
God promises to provide generosity and self-control, if we seek him first.
Ralph:
Well, thank you for joining me today on this show.
Ralph:
As our always say, stay financially savvy out there, and God bless you.
Outro:
Thank you for joining us on the AskRalph podcast.
Outro:
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Outro:
And remember, financial issues don't have to be complicated.
Outro:
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Outro:
The information contained in this episode of AskRalph is based on data available as of the date of its release.
Outro:
Sagio Accounting Plus and AskRalph Media Inc.
Outro:
is under no obligation to update this content if changes occur.
Outro:
Applying this information to your specific situation requires careful consideration of all facts and circumstances, and any information provided is not to be considered as financial, tax, or legal advice.
Outro:
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