Comments On Article: Household Management On A Tight Budget

I just wanted to add that I allow for inflation when calculating our Sinking Fund each year; used to add 2% on the previous year's cost (eg, if insurance cost $1000 one year, allowed $1020 the next year), but I've found 4% is closer to the mark. Some things increase more, some less, so money gets shuffled a bit between different expenses.

Regarding Ann W's did observation about how long our money needs to last in retirement: any figures I come across are based on people living for 20 years of retirement; here in Australia that's from 65 til 85. My husband's parents are in their mid 80s and have been retired for 30 years (official retirement age has changed in the last few years); they're still going strong and so is my Mum in her late 70s. 

Joyce C I think you have a really good point about like-minded community. My mother and my in-laws are still socially quite active, but I can see they're starting to slow down physically, and I don't know about their finances. I like to think though, that they will never be left in the lurch because they have good families and support networks.

I have a question.

Ok..so my husband has Huntington's Disease and I also want to put Motor Neurone and other terrible diseases in this question .

Under the health system in America how are these people cared for?? They can't pay and the costs would bankrupt people

Ingrid M.. I thought the same about the medical costs being half our monthly income also and I had a good chuckle about the new funeral home/travel agency comment.  My husband is back out of hospital. As a family we believe it was Covid related as he tested positive after we went to the Dr before being admitted. His x rays and bloods showed no sign of a pneumonia ???? that we were told it was. It was an asphyxiation issue with oxygen levels dropping and that is a symptom of Covid.The medical people started telling him he had to change his eating which made him kick off as Huntington people can't handle or process changes. 

Grandma Donna Wrote,

Terri C, 

Very good post you just did here, so much to take in and there are many of us that will learn from this.  Charles and I pay our homeowners Annually, it will be due this September, last September after we paid it, I once again divided that by twelve and put that money in my budget as a i have it as a monthly bill.  I will do the same again but I never thought to shop around to see if there is once that is offering a better price.  Thank you for telling your story, it was full of helpful thoughts.  Donna

Stephanie G, I’m finding the Depression Era study invaluable!  It brings together the frugality I was raised with and frugal skills I gained as a young adult with the homemaking skills I’ve acquired over the past several decades.  I think some of the frugal ideas I encountered as a young adult seemed too difficult for me, but now I have the skills.

We truly have no idea what will happen with healthcare in the USA.  Joyce C, I appreciate you sharing that you took early retirement and never regretted it.  We are prepared for a frugal, comfortable retirement.  But if things go south and deep cuts to our budget aren’t enough, as Ann W says, we will have to reconsider retirement.  We actually sat down and asked ourselves what the worst case scenarios are and what we could do about them.  And we decided it is still worth it to use to take early retirement and see what happens.

Thank you to everyone who mentioned using a Medicare insurance agent.  I’d forgotten that is an option, and when the time comes we’ll be sure to do so.  We know a couple who do that as their business, but they’re a little older than we are and I don’t know if they’ll still be doing it when it’s time for us to choose.

We did start talking about our wishes for when we die.  My FIL had already arranged and prepaid for cremation, which was helpful to us.  We do want it to be planned and prepaid for our children.  My MIL refuses to make any plans at all because she is superstitious and thinks it will make her die sooner.  She won’t even talk about what she wants done, and we don’t know if she’s planning for funds to be available.

Our goal is to stay in our home as long as possible.  Our adult son lives with us and that seems likely to continue for a several years still, perhaps always.  It works well for all of us, right now he counts on me to cook his meals while he is working full time and also a competitive athlete (like having another job that takes 20+ hours a week), but he will be able to help do things we can’t do as we get older.  And if we want to go road tripping in the campervan without the dogs he will be home with them.

Terri C, your comment was so inspiring! It made me want to work all the harder to make every dollar count. :) Thank you for letting me know about Mrs. White's blog. I'll go take a look. :) 

Grandma Donna wrote,

Karen S, 

We have Medicare and Medicaid.  Medicaid is tied to the percentage of the federal poverty level.  That is when someone will qualify for Medicaid.  It does have its limitations but helps many people when their income or health is very low. 

Thank you Donna. I've found the system your Country is very complicated compared to what we have here

Bless you.

I agree we certainly can learn so much from the Amish, my goal is to slowly build my library of Mrs Whites books and I have some Amish books that I am looking forward to owning one day. And as Terri C mentioned I have been really enjoying reading the blog Letter's From Mrs White.

Thank you for your comment Grandma Donna, I enjoyed reading your reflections and often feel very blessed, even when funds are low, I am eating so well and have such peace out here, it's something I am always very grateful for xx

Thanks for that Grandma Donna. I didn't scroll back to re read. Anyway it sure did make me laugh.

Hello!  Donna, I have been reading your blog and all the comments for years, but haven't ever commented.  Your simple life and wisdom helps to bring clarity and reassurance to my weeks.  I'm 43, a mother of two - a daughter who is 9 and son who is 7, we live in Melbourne, Australia and I'm about to celebrate my 18th wedding anniversary!  I've been brought up to appreciate and enjoy homemaking and have luckily been able to stay at home with the kids, picking up a few hours of work each week as a high school teacher.  I look on all of you lovely ladies as mentor figures to me and garner so much wisdom and encouragement from the articles and from this forum.

I'm so grateful for the upbringing I've had - my mum has taught me to cook from scratch, sew, mend, iron, do laundry and my dad has taught me how to manage my finances, live on one income and still save money and keep a detailed budget (or 'figures on paper' as he calls them!), and I have taught myself how to grow fruit and vegetables and keep chickens.  Even so, I feel that as a mum of young kids in this modern era, trying to live a simple life is like trying to swim against the current.  It takes so much physical and mental energy and it's so easy to slip into bad habits eg. overspending, buying junk we don't need, filling our schedules with too many commitments, wasting time on screens (To be honest, I have found myself spending WAY too much time on websites searching things like 'how to find time to sew', instead of just shutting the computer and going and sewing!) .

I find the modern world quite overwhelming, especially with all of the apps and notifications and supposed need to be always connected and on.  I would absolutely LOVE to be able to do this 1930s challenge in it's entirety (I've always wanted to be on one of those TV shows like 1940s House), but I will have to be content with just doing as much as I can and making tweaks to our living situation here and there.

Thanks Donna for the time you take to write these posts!

My husband and I have Medicare A, B, and D plus a supplemental plan.  We have a dental plan that pays well for preventive services, but not too well on other things.  We also have an Alfac cancer plan that I first got when I was working and we have used this and it was very helpful.  My husband didn't think this was worth the money, but one cancer diagnosis and he changed his mine.  You never know what will come, my husband had the cancer and there was not any family history of cancer.  My family had lots of cancer of several kinds and so far I have not had cancer.  

Preparing for retirement is one thing, but when you are retired all type of things come up that you don't expect.  My husband and I have been retired over 20 years and at the time we thought we had everything covered and could live quiet comfortably.  Then 2008 hit and our stocks in our retirement funds went way down.  I don't think anyone could have seen that one several years before that.  

That being said I am glad we retired when we did because I would have worked a lot longer I am sure.  We have taken on temporary jobs when additional income was needed and occasionally we look around for what we can sell.  But we are both glad that we retired while we were healthy and could enjoy some time before the problems of getting older really kick in.

There has been talk about a funeral vacation, but once you get passed that and the medical bills start to come in if there has been a long illness this can be expensive.  I have a friend that lost her husband just a few weeks ago and there are lots of medical bills.  She has been told that as long as they are all in his name with him being responsible then she doesn't have to pay them.  She said she is going to check with a lawyer, but I think that would be a good thing to know.  Does anyone know here know?  Might vary by state, I don't know.

Like any other preparedness you prepare for what is most likely to happen to you, but then you can get surprised.  

I just wanted to mention that you can call the billing department when someone is in the hospital and check on the bill. You can also negotiate for what services you get, and get a cheaper option sometimes. Even when in the emergency room I'd be questioning if all my services were going to be covered by insurance and request that only covered procedures be done or negotiate the price of services not covered. You can call the billing department from the emergency room too. :) This keeps the surprises with the bills at a minimum. 

I have in the past called the hospital billing office and asked for a payment plan. There wasn't any fee or interest and paying over time was better than paying all at once. My daughter who had a low income requested and received a discount on her bill and some of her bill was covered by the hospital's charity fund. 

I second Stephanie's suggestion to ask about covered expenses.  Sometimes just asking is enough for a doctor to reconsider whether you really need a drug or procedure. 

Grandma Donna Wrote,

Hi Melanie d, I am so happy that you have decided to join the conversation here on the forum.  I am happy to know that you have been following along reading the blog for many years.  We give you a big group (HUG) and welcome you to jump right in with our conversations.  I agree with you that this modern world is quite overwhelming.  I truly believe we can get ourselves to a more simple place right here in our homes as a place of refuge.  Our home wherever that may be, it is our place to feed our family and ourselves with homemade nourishing meals, bring calm and rest, so our minds can cope with the stresses of today.  I am glad that you posted today.  :)   Grandma Donna

I enjoyed reading your comment so much, and agree, this world has many challenges, I often reflect back to how my days looked before mobile phones, and very limited internet and even no internet. We hear it said quite often and I think it myself, how little time we have now, even with the modern conveniences we have compared to the 1930's.  But I really believe it's the devices and technology that robs our time. You have a thought about something and you think, I'll just look that up and the clock ticks on, your flow has been disrupted and on it goes. I'm contemplating getting a phone that is only for calls and text messaging no apps at all, an Australian man has started a company selling them, kidcomms I think it's called, I've just ordered one for our 15 year old son. That way if I need or want to use the internet I have to go and use the laptop. What a world we live in! Congratulations on your 18th wedding anniversary I hope you have a very special time together, what a blessing!! 

Everyone should go to an attorney and discuss financial and legal matters BEFORE someone dies.  A Last Will and Testament can name guardians for your underage children so it's not just for old people!  Young people get sick and have accidents, so legal preparation is for all adults.  A Durable Power of Attorney for Health Care Decisions is for everyone.  A Living Will is for everyone.  A Power of Attorney naming someone to handle financial and legal matters is also for everyone.  

The question on whether or not the wife is responsible for late spouse's final medical bills is a very good example of what to ask the attorney.  The answer to that type of question has a lot of "ifs and buts" to it.  

Another question is, is it possible to set up our finances so that probate will not be necessary?

To save time and expense when you see your attorney, have the names, addresses and phone numbers of parties you are going to name on various documents AND BE SURE TO CHECK WITH THOSE PEOPLE TO BE SURE THEY ARE WILLING TO SERVE.  You don't want to pay to have documents drafted and then have to pay to have them redone.  My parents named my youngest sister as POA, and she pitched a fit asking me why I'd put her name in.  I told she was the one they chose.  

Most people say they can't afford an attorney, but from experience I can tell you not getting legal advise and be much more costly in the long run.

Hello, and thank you for the interesting blog post, Grandma Donna. You all are certainly doing a good job of living carefully!

This week with you in mind, I tried to think of what I could do differently, and I gave up buying plastic wrap. I have always used it sparingly, but now plan to just cover dishes of leftovers with other dishes and use foil if taking a dish of food to a potluck.

Buying a cow and having it butchered is a tremendous savings. The meat is also much more healthful. You could always go in together with another family if the amount of meat would be too much for you. Our family does this with my husband's family.

My last idea is doing calisthenics as a way to strengthen the body and relieve pain. I had nagging knee pain for years; finally I found some descriptions online of calisthenics routines and started doing them. Within three weeks my pain was gone. 

I would appreciate any nutritious and inexpensive breakfast ideas that anyone could share. 

Grandma Donna, why doesn't Charles go to VA for his medical?  Is there a VA clinic or hospital near you?  My husband has gone to the VA for years.  We have a VA clinic/hospital 20 minutes from us.  We are lower income and  the VA has paid for two knee replacements for my husband and his PT and chiropractic appointments are free for us at the VA.  His meds are $24 for three months' worth.  They go by your income.  He  has had excellent health care through them.   If they are unable to get you in within 30 days, for a surgery say, then they have what is called community care where you can see a doctor or surgeon of your choice.  You should check into it.  It has saved us thousands of dollars for his health care.  Good luck!  Happy retirement, Charles.   

Grandma Donna wrote,

Cate D, another commenter in the forum brought up the VA as well.  As I told her, we have called the VA before but as long as Charles is still working his job he does not qualify due to income.  They said after he retires he may qualify for some VA assistance but they cannot talk with us at this time. He will go back once he is retired. Possibly help with medications.  When my father lived with us after he had a stroke, we used VA for him. They were very helpful and were able to send us medical equipment that I needed to care for him.  Also he received his medication from them for free. Thank you for asking. :) Donna

Elizabeth, you were smart to find some exercises that helped you. I'm working on doing that too. 

I'm busy and active but I realized that I need regular exercise.  Two people I know required physical therapy after being hospitalized for only a short period. That surprised me because they are busy, active people. They couldn't get around at all. I think it's because it takes longer to recover when you older.

My husband used to eat 2 eggs and a piece of sausage for breakfast. That was 14 eggs in a week! So to save on costs I now make egg bakes using 10 eggs for 12 servings. It's basically a crustless quiche. I add some sort of breakfast meat I get on sale. I give him a piece of fruit with it. My daughter makes something called an oatmeal bake. My other daughter has switched to homemade bread and homemade applesauce for breakfast.

Ann, my husband is and attorney and we have hired his friend, who is an estate attorney, to plan ours. You CAN do things to prevent having everything go to probate. 

We are only 43 and are doing our planning now so that we don't have to worry about it later. We have designated Durable Power of Attorney and Secondary Power of Attorney for health and financial decisions. We have living wills and have set secondary beneficiaries to all of our accounts. 

We purchased a cremains burial plot at a beautiful natural cemetery so that our ashes will be interred together and go back to the earth. 

Anyone who can, should make these plans as early as they can to prevent more confusion, stress and grief when the inevitable happens. You never know when it will!

Ann and Sharon, we just finished all of that up with an attorney. She was extremely thorough and covered all contingencies. We avoided probate by doing a TOD (transfer on death), for our home. Had we not had that option our children would have had to mess with probate. I would, also, suggest POD's (pay on death) on all bank accounts and as Sharon mentioned, putting secondary beneficiaries names on insurance policies. My husbands parents did POD's and that was a true blessing; quick and easy.

    Our wills included the personal property sheet, so whenever we pass those items go to a specific person. Since the list is mentioned in the body of the will it becomes part of the will.

Great conversation, everyone. Your tips are appreciated.

Thank you to all who are sharing their tips for planning for going on your final vacation. :) I'm writing everything down. I had a question, which if it has a quick answer that someone knows that would be great, but if I need to see an attorney I'll understand it can't be answered here. It's about POD. Is that for if there's no rights of survivorship on an account?

Hi Stephanie,

POD is when both parents have passed and the names of the beneficiaries is listed as who receives the money. For example, my husband and his brother were listed as recipients for the Pay On Death of their parents. Their mother died in May and their father died in October of the same year. After their Dad died, they took their mom and dad's death certificates to the various banks and were given a check on the spot. Each received half of what was in the accounts. Being totally debt free makes this process much easier for the loved one's that are left.

I am not sure if I explained it well enough to make sense, but I hope this helps some.

Glenda

Stephanie G, if I understand your question correctly you are asking if the POD/TOD (payable on death, transferable on death) only kicks in after both people on a joint account die (or all people if there are more than 2 account holders)?  If so, then yes, that is the case.

Many people choose to do a living trust instead of just naming beneficiaries on accounts, deeds (real estate), titles (automobiles), insurance policies, etc.  There are good reasons to do a living trust and it’s probably best for people to talk to someone about the best choices for their situation.  Not the person who wants to get paid for making a living trust, however!  Some people want to make parts of the trust irrevocable when one person dies, so the other person can’t make changes and possibly leave out an heir that the first person wanted to receive an inheritance.  Some people want to designate funds to go to charitable organizations in a living trust, in addition to heirs.  Some people need to set up a special needs trust within a living trust, to avoid a lump sum going to an heir who would lose government benefits if that were to happen.  We had a family member lose SSI benefits because of an inheritance, since a special needs trust hadn’t been set up.  The inheritance is long gone but it’s hard to get back on SSI and this person now lives with another family member.  Sometimes people like to set up a a spendthrift trust within the living trust, or designate an age an heir can receive the funds, or instruct that funds should be spent on college tuition, etc.  These are things that need a living trust.  But if a couple wants their estate to go to an only child, a living trust might be overkill.  Even going to just a few heirs might not need a living trust.  But property can be tricky, whether you use a living trust with a TOD, depending on the state and the heirs.  In California an heir of a house can keep the property tax basis if they inherit from a parent and choose to live in the home as their primary residence.  If multiple heirs inherit the house it might have to be sold to provide them each with their inheritance.  My neighbor recently died and his house is part of the estate to be shared equally, and the daughter who lived there with him for the past decade and provided his care has to move out when the house is sold.  She’ll never be able to afford a house on her own.  A living trust can help divide the total assets while still preserving a house for one heir if the estate is large enough.

Also, a person can have some accounts and real estate in a living trust and some as POD/TOD accounts.  My FIL chose to keep his living trust as it was before he remarried, willing everything in it to his children, but had one separate bank account with a POD on it for his second wife.  This made things much easier!  She had signed off when they married to relinquish any claim as heir to his retirement accounts

If people do choose to bypass a living trust and only do named beneficiaries for accounts and property, they should consider where funds to wrap up the estate will come from.  Technically, a POD account belongs to the beneficiary after the death of the account holder, so those funds aren’t required to be used to pay final bills, etc.  One way to do this is to have an account with those funds held with someone as a joint owner who will then use them to finish the bills.

As a reminder, don’t name a living trust as the beneficiary of a retirement account!  If you do, the account will have to be liquidated and all taxes paid before the heirs receive any of it — meaning the taxes can be very high if pushing into higher tax brackets because of the amount.  If the heirs are named beneficiaries, they have 10 years to withdraw all of the money from an IRA and can spread out the taxes that way! 

When DH and I went to the VA for his registration and introduction (getting his card and getting a run down of how things there work) the person advising us there said any honorably discharged vet can use the VA, but they may have to pay for the services and medications themselves if their income is too high.  The VA has group levels based on income, which affects how much is paid by the VA.  I'm not an expert and maybe we misunderstood that part, but maybe you could contact your county's VSO (Veterans' Service Officer) if you haven't already, to check to see if Charles can apply now, even if not much or nothing is paid for now.  The VA has an annual form to update income as income and expenses change, so retirement and loss of working income could be submitted as that happens.  

Also, I want to bring up having a VA burial, a real benefit of using the VA.  If a vet applies to be buried in a National Cemetery and is accepted - which most are - while the vet would have to pay for cremation or casket, the funeral service and interment or inurnment in the cemetery and the headstone or plaque is free, for the veteran AND spouse, even if the spouse dies before the veteran.  Our funerals were pre-paid.  We chose cremation and a simple memorial service at the funeral home (which we could have opted out of) then a military funeral service with inurnment at the National Cemetery.  It was about six years ago that I bought those contracts.  The cost for both of us combined, for everything - cremation, services at the funeral home, death certificates, service bulletins, inurnment in the National Cemetery - everything, was just over $6000.

Even if you don’t choose a National Cemetery, the VA will provide the gravestone plaque at no charge.  We didn’t know it before, but when we were making plans to have FIL buried in the same plot as his parents, the owner of the cemetery told us about the VA gravestone program.  He had already prepaid cremation through another company, but hadn’t said what to do with the ashes so we were making those plans.

In addition to frequenting my favorite frugal blog — that would be this one! — I’ve also been rereading my favorite frugal books (The Complete Tightwad Gazette, Living More with Less, Miserly Moms) and some retirement finance books, including Jeff Yeager’s How to Retire the Cheapskate Way.  Somewhere in my reading, I was reminded that (almost) everything in my home used to be money.  Even my house used to be money!  And for the most part, our money represents time spent earning it and time spent stewarding it well.  Then of course, we use more time to turn the money into things we need — food into meals, yarn into dish cloths, fabric into clothing, seeds into produce, etc.

So basically, most of us trade a huge chunk of our time for money, and then we trade our money for the things we need for living and often for things we don’t really need.  At some point we did realize that we wanted time more than money and started living on less than half our income so we could save for an early retirement — and prove to ourselves that we could live on less money when it came time to retire.  This is written about in Your Money or Your Life.  In truth, I saw recommendations for the book long ago but didn’t read it then, and at the time I did read it my husband wasn’t interested in early retirement.

We’re at a place where we can have more money if my husband keeps working, but we will continue to not have time.  Or we can retire and have time, but have less money than if my husband keeps working.  I think there’s a tipping point, and we really want the time.

We are ready to retire, and while it will start out quite frugal because of health care needs, in time it might get a little easier, because as we get older we won’t be as worried about how long the money has to last, Medicare will be less expensive than the $20K per year we estimate to spend on healthcare in the beginning of our retirement, and we will get some Social Security, even if Congress does nothing to fix it and it is a reduced payout.  I don’t need it to be easier so we can buy more things, I just don’t like the idea of feeling so insecure and worried about money, whereas with an income we are better protected against that.

Household management on a tight budget is going to be the name of the game!  But we are up for the challenge, and Grandma Donna’s blog is a big help!   Halfway through July we started living on our retirement budget!  But then I realized I forgot the budget amount included money for healthcare premiums and the deductibles/out-of-pocket, which we aren’t paying yet.  So in August we will be living on the retirement budget adjusted to remove those costs.  This will be our lowest budget amount in more than a decade!  I’m excited to make it work! 

Glenda H_2 thank you, you answered it perfectly. :)

Kimberly F  Yes, you understood my question. I always appreciate your very detailed explanations. I learn so much from them. I am so happy for you and your family because you have thought everything out so well and are changing your life in such good way. :) 

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I have making a will on my list of things to do by the end of the year and that's why I am grateful for everyone's contributions. :) I'm watching the economic news, and the big corporations in my husband's industry have already started laying off and selling or retiring inventory, and not in small numbers either. :( This means these actions will trickle down to the mid-sized companies like where my husband works, and the small companies might go out of business altogether. We're trying to do the important things by the end of the year that we might not have money for later. 

Elizabeth M_2 one egg and potatoes cooked in oil with a banana on the side is a pretty cheap breakfast. I have a garden so I can make very inexpensive vegetable omelets. Or maybe oatmeal with some inexpensive fruit. 

I've gotten some great ideas from everyone's post in cutting even more costs. 

My husband and I don't have health insurance. We live in the USA. Last month I had emergency surgery for an infected gallbladder. I stayed overnight in the hospital but it was not even a full 24 hours. I've gotten the bills in the mail. The Surgeon is about $2600, the radiology dept $2000 and the hospital $53,000. I'm sharing these numbers just to show how something very unexpected can happen and cause us to have new burdens to deal with.

Tandi S, I’m so sorry to read that you had to have emergency surgery!  I do hope you can make an arrangement with the hospital not to pay that amount.  All medical providers have these inflated prices that they bill and then agreements to pay less with the insurance companies.

The numbers are crazy!  My son had a bike accident and just his surgery was billed at over $80K, plus there is what the ambulance and the trauma center billed.  We are very thankful he was on our insurance at the time, and when he had to choose his own insurance he chose a more expensive plan than what his employer covers (employer will pay an amount that is half the price of a low level plan) to make sure he has good coverage while he is still racing.

I’ve read that medical bills are the number one reason for bankruptcies, accounting for more than half of all bankruptcies.  That right there shows how broken the system is.  I don’t know what the answer is, but I do know the system is broken.