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I have nothing novel to add but the previous experiences that live in my emotions today are:
The great recession of 2007-2009 that impacted most of us. Am definitely risk adverse from that experience and imagine losing all of my savings.
I don't like buying a new car as I haven't had good luck with them, even my Honda. Somehow I don't get the 200k miles with just oil changes and no major repairs that others talk about. Every car is a major hassle and costly. I fear getting stuck on the side of the road in the middle of nowhere.
Retiring from a job when I know that I can never go back and there is no way that I could find another job that paid that well. It causes me to delay my retirement so that I am absolutely sure that I can afford retirement.
I grew up rather poor, sometimes not having enough to eat as a child due to lack of money and my wacky mother. And there was always the threat of eviction. But I don't worry about having enough food or shelter over my head as a result of that experience although it has probably affected me in other ways. Am more concerned that I could end up in retirement sitting in the house all day because I can't afford to do anything.
I wish my parents had taught me more about real life and money. I'm sure their thinking was to protect me and let me be a kid. Probably that was depression mentality on their part because they spent too much time when they were children wondering where their next meal was coming from!
I remember applying for my first credit card and being denied. I was devastated and ashamed. Really for no reason. I realize now it was because I had no credit history. Anyway I walked away from that experience determined that would never happen to me again.
This was in the mid 70's. Historically speaking, just bit after it was decided in 1974 that a WOMAN could be credit worthy on her own. Without a man's signature. Yeah, I know that's hard to believe now but that's the way it was. And it was before Google was invented and there was no computer or internet I could go to. There was no firing up the laptop and checking the net!
So I made an appointment with the VP at my bank. A wonderful gentleman named Morris Waller. I mention his name because he died years ago. He took the time to explain to me how to get credit and deal with lenders. He helped me take out 2 loans which I paid back in order to establish a credit history. Over the next several years he gave me lots of advice and I listened. Mr. Waller had a great positive influence on my life.
But I still get a sick feeling whenever I think about being denied for that first credit card!
We grew up very poor. My mom was divorced and there were 5 kids living on her waitress salary and tips. Child support at that time was a JOKE. Not enough monthly to even buy one outfit for school. So we all learned to cook from scratch and how to stretch a dollar, because while mom was working 2 jobs at a time, we kids had to cook and clean to keep the household running. Since that time I have always been a bargain shopper and a saver. I always have had to have a stash of money for random emergencies. Now, even though we are pretty comfortably retired, I still hit the garage sales and thrift stores. I love to find something for less than half it's worth. Not to say I don't waste my share on hobbies, etc,, but on everyday things I do tend to scrimp. It is so rare that I will spend more than 3.99 a lb for any kind of meat. My MIL loves lamb and I just would not buy it because of the price. I still only buy filet mignon on Valentine's Day. I just can't bring myself to drop that kind of money on food.
The other big thing is my mom died at 65. I think that was a big factor in my retiring young. I saw her work waiting tables until she physically could not do it anymore. She passed away about 5 years later after some really hellish health issues. I didn't want to work until I die. I saw my hubby's parents happily retired in their 60's and living a nice but modest lifestyle in their 70's. I said "that's for me", so we retired as soon as practically possible. I left a lot of money on the table walking away at 51, but our pensions are "enough". There are other ways to make passive income, and in a few years there is SS, so we will always be fine, but I didn't want to work the extra years for a bigger pension, because what if I don't live long enough to enjoy everything I've worked for?
My "scar" was having financial fall at the time of losing a child in 1981. Totally unprepared. Some wonderful people helped, but it set us back many years. Other than that, I don't buy what I cannot afford up front with cash or minimal credit charge. I normally pay off any credit charges in huge chunks. I would never buy a home that is more than I need or can afford, that is folly imo.
Actually no because I was thinking about behavior that still lingers today for those who are retired or contemplating retirement but I do agree that this topic perhaps better belongs there. Thanks for asking.
I think I would have been less dramatic about phrasing the question - perhaps using the term "events" as opposed to "scars". Or "affect how you live in retirement/think about retirement" as opposed to "live in your emotions". I realize there are people who have lost parents at an early age - and had surviving parents struggle to make ends meet. Or people like Tallysmom - who lost a whole way of life with the "steel thing" (the late husband of the MIL of a good friend of mine used to work for Bethlehem Steel - what a mess - what little of her pension/union benefits that is left can't even pay for Medicare Part B today). And then there are older people who lost jobs/expected pension/health care benefits in their 50's or early 60's post-2008 (or even earlier as a result of things like corporate restructurings).
In all honesty - nothing bad like that has (knock wood) ever happened to me. Or my husband either. OTOH - 2 years after we retired - in 1987 - the stock market crashed 20%+ IN ONE DAY. We didn't lose a lot of money (because we didn't have a lot of money in the stock market). But I thought "wow" - look what can happen. That event increased my already conservative investment tendencies. Robyn
In the early 1970s, I applied for credit cards at 3 large Dallas retailers. 2 of them turned me down because I was a woman. The rejection letters I rec'd had long checklists of reasons - including insufficient income, time on job, time in residence, bad credit reports, etc., with one box at the bottom labelled "Other Reason". Both the retailers checked "Other Reason" and left the explanation lines blank.
I had my boyfriend apply in his name and he was quickly approved by both even though his time on the job and in residence were both way shorter than mine, and our incomes were comparable. We tore up and returned those cards.
Within a year or so, the Equal Credit Opportunity Act was passed and both retailers sent me unsolicited credit cards! I tore up and returned them.
How this affected me: I was a lukewarm feminist at the time, but this opened my eyes and made me a lifelong die hard feminist, and I never shopped at those 2 retailers again. Also I became a loyal Neiman-Marcus customer because they DID approve my account.
I spent most of my working life constantly worried about money and job security. I had plenty of good reasons. After my Vietnam service, I moved to Cleveland so my wife could complete her last semester of college. Unemployment was in the 20% range and it was extremely difficult to find a job. I am still scarred by that experience and have no sympathy for anyone who complains that it is difficult to find a job in the current economy. I then went to graduate school and as that came to an end I spent 6 months looking for a job. I thought I was going into a great field but everything changed when the government instituted DRGs. Well I did get a job and we moved to Arkansas. Both the job and location were disappointing and on top of that I was working on contract for the Federal government and the government announced they wanted another bidder for the contract. So I immediately started looking again. Within a year, I was working in Kansas City. Sure enough 6 months in the cut backs started due to threatened bankruptcy. Within a year I was working for a great company and training in California. To make a long story shorter, that company transferred me to Chicago and then was sold and closed down. I was fired from my next job in Phoenix due to politics and a change in management. Next job in NY lasted several years until the company was sold and the facility closed. Fortunately I was able to work at my last job for 12 years and then retire.
Our now financial behavior is the result of many factors and one for sure is our prior experiences from long ago, either what we learned from our parents (i.e. their financial dysfunction) or something we learned ourselves in our long journey of attending the financial school of hard knocks.
I thought I'd start this topic discussion to see if some good sharing results so we all learn from it. I'll start the ball rolling to hopefully get it going. I ask this question in the context of those who are retired or contemplating retirement and find themselves having a financial skeleton or two in their emotional closet that shows its ugly head in retirement planning or retirement living behaviors.
When I was a soldier in the Army stationed in Korea, I'd go to the BX (Base Exchange) there and they had a Harley Davidson motorcycle on display that I would adore. I made a promise to myself that upon discharge that I would buy one.
When I was discharged, I went to the local dealer to buy one and was told that I would need a co-signer for a loan. I asked one of my parents if they would co-sign and they said yes they would but unfortunately that didn't get the job done and I was denied the loan.
I was disappointed.
I think in some way that event left a lasting impact on me because I've always found borrowing stressful. And being self-employed, it was always challenging particularly during the early years of being in business.
Now it's no problem whatsoever and I'm probably done borrowing but about 11 years ago when buying an expensive home, I had occasion to apply for a large loan. While my numbers all pointed to me having no problem and that was my case, I still privately had worries about the underwriting process as it was taking place.
So this is my yesteryear financial scare that lives in my emotion today.
So how does this impact me in my retirement planning?
There may come a day when we need to take out a short term loan to purchase a retirement home before we sell our existing home. While the numbers would support such an action, otherwise we wouldn't pursue it, I'm sure I would find a new borrowing experience to be stressful
By the way, I never bought that motorcycle nor did I later in life when I could easily afford to pay cash for one. So my motorcycle memories are limited to the Honda 450 that I owned in high school.
Anyone else have something to share?
I can't say enough how incredibly important it is to start a retirement fund in early adulthood.
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