midlifedude

Man at midlife making second half matter

Archive for the category “family finances”

Debt: The Mosquito in my Ear

Debt nags me like a mosquito buzzing my ear as I try to sleep.

I’ve spent my midlife trying to get out of debt while preserving assets – in other words, reducing debt with current income while attempting to avoid incurring more liabilities Debtor depleting investments. Sometimes I have had to unload investments to pay off debts, and always feel bad about it, like I’m filling a city street pothole that is sure to crater again.

Overall, I’ve been fairly successful at paying down and staving off debt. Still, whenever I become completely debt-free, something seems to suck me back “into the red” – a job loss, a major repair, education costs, or simply operating a budget that gets out of whack and spending beyond current means, a cash flow problem. I’m not alone.

Americans are swimming in debt:

  • The average American household that carries credit card debt has a balance of more than $15,000 on the cards, according to a 2017 NerdWallet survey. The same study found that the average American household carrying student loan debt owed $46,597 in education expenses, and the average American household with auto loans owed $27,669 for their vehicles.
  • A 2014 Urban Institute study found that 35 percent of Americans had delinquent debt. That debt typically came from credit cards or medical or utility bills that was more than 180 days past due and had been turned over to collections. The debts averaged more than $5,000.
  • In 2013, 7 out of 10 graduating college seniors were entering post-college life with student loans, which averaged $28,400, according to the Project on Student Debt.

Debt limits freedom and choice. Debt triggers shame and guilt. Debt causes stress and distrust in relationships. Worry over debt can lead to physical health problems, such as high blood pressure.

Debt makes me irritable, anxious and angry. I’m not alone in suffering from negative emotions related to debt. Research has found links between financial health and mental health.

Researchers from the University of South Hampton who analyzed 65 studies on debt and mental health determined the likelihood of having a mental health problem, particularly depression and anxiety disorders, is three times higher among people who have debt. The link between debt and suicide was especially pronounced: People who committed suicide were eight times more likely to be in debt.

Drug abusers were more than eight times more likely to be in debt, and problem drinkers 2.5 times more likely.

Short-term debt, such as credit card debt and overdue bills, was associated with greater depressive symptoms, according to a 2016 study in the Journal of Family and Economic Issues. People in the latter stage of midlife and closing in on retirement, 51- to 64-year-olds, were among the groups where the link between debt and depression was the strongest, along with people who were not stably married and those with no higher than a high school education.

Researchers aren’t unified in what causes what – whether stress related to debt causes mental health problems or mental health problems lead to poor financial management. But the two woes are close partners either way.

As midlife progresses, the urgency to escape debt and then keep it at bay increases. Time becomes the enemy; opportunities to get out of debt and recover start to diminish. Wives have been horribly miscast; debt is the real proverbial “ball and chain,” and not something one wants to drag into later adulthood. Whenever I hear that mosquito known as debt whining in my ear, I’m going to slap it silly.

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Riding the Marry-Go-Round

I’m a two-timer. An encore performer.  A twin-biller. A mulligan-taker.  A repeat customer. A re-doer. A rider on the marry-go-round. I’m remarried.

I was remarried at 47, placing me among the 16 percent of U.S. men aged 40 to 49 who have been married twice, a figure that climbs to 21.6 percent at 50 to 59 and to 24.6 Divorce-Remarriagepercent, or nearly 1 out of every 4 men, at 60 to 69, according to the U.S. Census Bureau’s 2015 study, “Remarriage in the United States.” An even higher percentage of 40-to-49-year-old females, 18.2 percent, have been married twice.

My second wife has watched my two kids, who are now college-aged young adults, grow up since they were 9 and 7, and became their stepmother when they were 14 and 12, heading into the most challenging adolescent years. It requires bravery, patience, tolerance, acceptance, respect, understanding, flexibility, persistence, discipline, forgiveness and the capacity to love to become an effective and enduring stepparent.

Remarriage brings a whole new set of complications and negotiations for the new couple that cause stress: blended families; ex-spouses who may be intrusive; divided loyalties among children and extended family members; ambiguous stepparent roles and expectations; uncertain and evolving children’s reactions to changing family dynamics; financial complexities; practical and logistical decisions to reconcile often well-established, separate lives, lifestyles and cultures; trust issues and other emotional baggage; and legal agreements and bleed-over contentiousness from first marriages. Compared to the virtual blank slate of a first marriage, remarriage can appear an Etch A Sketch on steroids. My second marriage has not been immune from some of these challenges.

If raising kids is the toughest job you could ever have, imagine stepping in as a relief pitcher in the seventh inning, when kids are entering and navigating adolescence as mine were, with all the challenges that raging hormones, establishing independent identities, questioning authority and fitting in with peers presents. A stepparent who adopts an authoritarian approach risks creating an environment of constant tension and turmoil.

On the matter of step-parenting, The Gottman Institute, which researches marriage and relationships, explains the disappointment a stepparent encounters in desiring reciprocal love from stepchildren that may fall short of expectations, and outlines a realistic role: The “role of the stepparent is one of an adult friend, mentor, and supporter rather than a disciplinarian,” says the Gottman Institute blog. “There’s no such thing as instant love. When stepparents feel unappreciated or disrespected by their stepchildren, they will have difficulty bonding with them – causing stress for the stepfamily.”

When a biological parent of the same gender as the stepparent is firmly involved in the family picture and the children’s lives, even when not living with them full-time, it may be unrealistic to expect of the children to show equal respect, appreciation and love to each parental figure. A stepparent who keeps score in such ways is setting himself or herself up for disappointment, corrosive resentment and an emotional rollercoaster ride. Children of divorce do their best to cope with confusing and distressing situations and want nothing to do with choosing sides or participating in competitions for their attention and affection, even under the friendliest of circumstances.

Financial issues, which can be vexing in first marriages, can become even more complicated in second marriages. Sharing finances and deciding on financial priorities are aspects of marriage that can produce vulnerability and distrust. These feelings can be amplified in remarriage when one or both partners, often with decades of accumulated assets, debts and obligations, may have children for whom they are financially responsible, child support or alimony payment arrangements, pending college tuition and room and board costs, or property, equity and retirement investments.  My second wife married me at a time when I had years of kids’ college costs upcoming. In any remarriage, it would be fair to ask: What should be the new stepparent’s financial obligation toward the stepchildren’s college expenses, if any?

Remarriage is volatile. The odds of second marriages surviving are worse than first marriages. The National Stepfamily Resource Center cites a divorce rate among individuals who get remarried of 60 percent, while most measures of the divorce rate among first-timers hover around 50 percent.  Studies show those who have experienced divorce before are more likely to consider it again when marital struggles emerge.  Also, ex-spouse conflicts and new partners parachuting into often ill-defined parenting responsibilities add to the strain that pushes the remarriage divorce rate higher.

Yet those who have lost in love still want to take their mulligans, men more than women. A 2014 Pew Research Center study found that adults who have been previously married are more likely than not to remarry: 57 percent of previously married 35-to-44-year-olds; 63 percent of 45-to-54-year-olds; and 67 percent of 55-to-64-year-olds had remarried. A Pew survey found that only 30 percent of previously married men did not want to remarry, while 54 percent of previously married women indicated they would prefer to remain single, reflecting men’s greater needs for the social and emotional support that marriage provides.

Perhaps more than anything, the high rates of remarriage show resiliency of spirit, faith in the institution and the innate desire of humans to connect on a deeper level and share lives, longings that outweigh the challenges of remarriage for many. Apparently, remarriage stands as the poster child for the trite cliché: “If at first you don’t succeed, try, try again.”

 

15 Principles for Surviving and Executing a Career Transition

In two months I will complete a graduate degree in clinical mental health counseling that will have taken 5½ years to finish, enabling me to take final steps to executing a fairly drastic midlife career change from public relations. I had made a career change before, from journalism to public relations. Though still jarring, that transition was significantly more seamless than this one, requiring no additional education and using many of the same skills.

I have been seeking to derive more meaning and satisfaction from my career, as well as tCareerImagehe opportunity to self-direct my future, embrace an entrepreneurial spirit, contribute value to society and work flexibly, creatively, collaboratively and independently. I explored life-coaching, completing a series of training courses, but ultimately didn’t pursue it. But the idea of helping people with psychological, emotional and life challenges stuck with me.

It took me about three years of mulling the idea to apply to graduate school for counseling and another year after acceptance to enroll in my first class. Twenty-one classes and three internships later, I’m on the precipice of a career transition.

It hasn’t been easy. As I started my internships, I ran into a buzz saw at my PR job. It was miserable, and at the same time the best thing that could have happened. I couldn’t have done both well simultaneously, along with graduate classes. I would have burned out. I left my job, and the security blanket of a biweekly paycheck. That was 18 months ago. Since then, I’ve lived a much more itinerant, unpredictable and frugal existence, cobbling together temporary, seasonal and part-time jobs, and unpaid or low-paid internships.

In brief, these are 15 principles I’ve learned about making a significant career change, concepts that are valuable to consider while mulling a change or while bulldozing through the trenches:

  1. Long-Term Vision – A career transition won’t happen if you can’t envision a different future, if you are too overwhelmed by the daily grind and stressors to dream about a new life.
  2. Delay Gratification/Patience – Depending on how drastic the change and the amount of education and training required, the transition could be a long haul rather than a quick fix.
  3. Risk (Tolerance/Acceptance) – You will be giving up something known for something new, with no guarantee of breaking in, or even being proficient at or liking the new endeavor.
  4. Self-Knowledge – Become clear on what is most important to you, your values, how much risk you can tolerate, and how hard you are willing to work to make a change happen.
  5. Courage – You’ll have to be brave enough to take risks and step out of your comfort zone.
  6. Confidence/Self-Assuredness – Consider how you will handle other people in your life, including those closest to you and colleagues in your current occupation, questioning or casting aspersions on your decisions. How much would a wave of skepticism and criticism deter you or affect your thinking and beliefs?
  7. Identity – Leaving a profession, especially one you’ve worked at for years and in which you’ve achieved a certain level of expertise, status and success, can significantly alter how you identify yourself. Can your ego withstand such an identity loss, while building a new and different piece of your identity?
  8. Research/Network – It will be important to determine the costs and requirements (and barriers) to entry into a new profession, as well as occupational outlook, such as job growth and salary projections. Soak up all the information you can about your prospective new career while considering a transition and in the transitional phase by interviewing people in the field, networking with fellow career changers and professors, taking classes, attending conferences and reading industry journals.
  9. Commitment/Persistence – A half-hearted or uncertain effort will likely fail to result in lasting change, like my foray into coaching. The urge to give up may hit, especially early in the process. You’ll have to constantly re-evaluate your commitment, revisit why you embarked on the effort in the first place and resist inevitable doubts.
  10. Embrace Uncertainty/Unpredictability – Become comfortable with not knowing and embracing the journey as an adventure. View unpredictability as making life more exciting, stimulating and challenging. Here’s where faith and spirituality can come into play.
  11. Sacrifice – Be prepared to pay costs in terms of money, time, effort, perceived security and status (you may go from being expert to novice).
  12. Hustle/Scramble/Diversify – A career transition may not be seamless, moving directly from a job in one career to a job in another. There may be an intermediary period involving education, training, internships and the like. You may have to jump off the cliff during this period – leaving security behind – but with a parachute. You just won’t be able to be sure where you may drift or land along the way. You may have to be aggressive in patching together a living from various jobs that aren’t career jobs, but serve as a means to your end. You may have to call on skills you weren’t using in your current career, or adapt your skills to different positions that work within your new goals. For me, that meant working summers as a tennis teacher and applying writing and teaching skills as a university writing tutor.
  13. Flexibility – A flexible frame of mind complements the principles of identity and hustle. If you are not rigid in your identity, you can explore varied employment opportunities, living arrangements and lifestyles that can help you manage the transition. If you are open to a wide range of income-producing opportunities, you can minimize your reluctance to try new things – perhaps jobs you would have once considered beneath you — and ramp up your hustle to get them.
  14. Financial House – Your transition will be easier and less stressful if there is Order in the House, the Financial House. As much and as far ahead as possible, craft a financial plan for the transition. Build savings cushions and tuition accounts, if education is necessary. Consider becoming a minimalist in your lifestyle choices, to some degree. A transition likely will come with some financial pain, including possibly a precipitous income drop from your previous career once you start in a new occupation, but planning and frugality can mitigate the potential pitfalls.
  15. Negotiation – If you’re lucky, you’ll have a current employer who respects, or maybe even encourages and supports, your career-change endeavor (I wasn’t). If so, see how you can negotiate to get what you need – time, a flexible schedule, tuition assistance, remote work arrangement – while continuing to fulfill your employer’s needs. You may be able to hold onto your job and income much longer (I couldn’t), helping to bridge the transition.

 

 

Divorced Parents with United Financial Goals

One of the toughest things about divorce is untangling and dividing finances, and planning and making financial agreements for the future that each party can live up to when kids are involved. Fortunately, my ex-wife and I have done a pretty good job at that, and it’s paying off now.

Money battles between divorced parents and short-sightedness not only cause intenseCollegeTuition acrimony between the former husband and wife, but almost unavoidably will spill over into relationships between the parents and the kids and cause more turmoil, stress and anxiety. Challenging enough that parents who once combined incomes to create more buying power and economies of scale have to double down on everything after divorce – housing, property taxes, furniture, electricity, cable, maintenance costs, health and car insurance and more – without negatively affecting relationships and kids’ attitudes, perceptions and sense of well-being and security.

My ex-wife and I are likely going through our greatest time of financial stress since our separation 11 years ago right now, yet we are weathering it well (I can’t be positive, but I think I can speak for both of us). This fall 2016, both our children will be in college at the same time. In addition, I am in a graduate school program for counseling, so I’ll be paying for three higher education degrees simultaneously.

But a few things have saved us from potentially extreme financial pressures and enormous debt.

First, we planned for the kids’ college education early in their lives, investing in Maryland’s prepaid college tuition program (for two years’ tuition) when they were 4 and 2. We also opened Education IRAs for each child around the same time. Second, when we divorced, we agreed to continue contributing to each fund on an arranged schedule, and each of us adhered to the agreement. Third, I opened Maryland 529 college investment accounts for me and both kids a few years before my oldest entered college to help fund my education and fill in inevitable gaps in theirs. Finally, each kid made wise choices to attend state universities, where tuition costs are half or less of private or out-of-state colleges.

My ex-wife and I each have had the discipline, cooperation and foresight to keep contributing to the kids’ college educations, even though we were no longer united or in agreement on other things. Sending both kids to college still will make a big dent in my monthly budget and annual cash flow. But as a result of our advanced planning and divorce agreements, I believe each kid will be able to graduate from college debt-free (and me from my graduate program without wiping out savings and investments). That will be a huge gift to each of them, and a big benefit in starting out their adult lives.

Working together with an ex-spouse after a divorce, as aggravating and imperfect as it may be at times, certainly pays off, both for the kids and the adults going their own ways.

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