Dealing With My Own Fiscal Cliff

My attitude toward money was always 'easy come, easy go.' Then I met Next Avenue's financial guru.

By Larry Carlat
Originally Posted On May 17, 2013

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Larry Carlat served as managing editor for Next Avenue.

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Nobody scares me more than Rich Eisenberg.

Rich is Next Avenue’s senior editor of the Money & Security and Work & Purpose channels. The word “excellent” doesn’t do him justice, and I’m not just saying that because he’s a friend. His work is thoughtful and incisive, practical and prescient — and it scares the living daylights out of me.

Sure, Rich has prevented me from leaping off the fiscal cliff, pointed out my myriad money mistakes, explained why I will probably work forever, and shown me how to avoid one financial calamity after another.

But more than anything, Rich frightens me. Because after reading his blogs and the articles he has assigned and edited, I realize that up until now, every money-related action that I’ve taken — and, just as important, not taken — has been wrong.

I’ve always been bad with money. I grew up with very little of it, mishandled whatever I earned as a young adult, became a tiny bit more responsible with my finances after I got married and had kids, and now that I’m divorced, am back to having very little of it again.

Over the years, my financial strategy was simple: When I had money, I spent more of it. When I didn’t have money, I spent less. I talked about savings the way I would talk about going on a diet sometime in the near future. Retirement was something that was talked about by old people.

The truth is, money never really interested me. Don’t get me wrong, I always appreciated cash and have worked steadily since I was a teenager. But it never drove me the way it drives others. Even when I had some extra coin and invested in the stock market, I was still more interested in poring over stats of the Knicks and Yankees than I was in following the stock prices of the tech companies I had poured my money into.

A few years ago I finally hired a financial adviser, and he has helped me manage my meager portfolio. I see him once or twice a year, and he tells me how my investments have been doing. I usually stop him after a minute or so and ask if he wouldn’t mind repeating what he just said, but this time maybe perform it as a puppet show.

OK, I’m exaggerating — but only a little bit. When it comes to money, I’ve lived in a world of magical thinking. I’ve somehow thought there would forever be enough to go around and that I’ll always be able to eke out a modest living. Instead of saving for a rainy day, I just waited for the sun to come out tomorrow. In short, I’ve been clueless and irresponsible, refusing to grow up.

I’ve preferred to live in this make-believe bubble because I knew what lurked on the outside. There were occasions when the bubble burst (buying a house, covering my kids’ college tuitions, getting divorced), and these real-life financial issues filled me with anxiety and dread.

As we all know, it’s more difficult to remain in denial as you get older: At this stage of life, you come to realize that the rainy days are nearly here. Retirement is now something you talk about because you are almost that old person you'd never thought you'd be.

So I read Rich Eisenberg’s articles and they scare the crap out of me. But they also help me finally understand money like a grown-up. And they give me hope that maybe, just maybe, it’s not too late.

I hear there's something out there called a Roth IRA. ...