Desperate Housewives cont.
Continued from Desperate Housewives page
In a particularly poignant exchange, Frank tells her they need to get “real about their spending” and cut back due to the fall in his business. She tells him that she “doesn’t want to be in the dark about the finances and that she can
handle the truth.” His honest reply is that she really can’t handle the truth. He was hiding the reality of the situation so that he could indulge her in the high lifestyle she was accustomed, if not addicted to, which included serial plastic surgery and indulging every whim of their teenage daughters.
Apparently the “keeping up with the Jones” mentality was alive and well in the Curtain household. Frank, wanting to be the provider for the three females in his family, had a hard time saying no and a hard time discussing the finances with the family. Ongoing family conversations about spending expectations in the face of declining income from his business would have gone a long way towards bridging the gap between their spendthrift lifestyles and their bank accounts.
The fall out list continues over on the East Coast. Atlanta housewives Sheree Whitfield and Lisa Wu Hartwell are forced to downsize their real estate holdings in the face of divorce and loss of a major League football contract.
Celebrities and athletes fall into this trap of living high on the hog, as though their income will never decline. The reality is that the high income of most of these celebrities often has a shorter life-cycle than they expect. Managing the uncertainty of income is crucial by saving aggressively for “retirement” and hopefully living a lifestyle that does not have to be altered drastically should their career be truncated by an injury or loss of a contract.
Finally, Jersey couple, Teresa and Joe Giudice, file Chapter 7 bankruptcy when several of Joe’s real estate ventures fail. Once again, most likely this was due to over-leveraged, non-diversified investments and perhaps insufficient cash reserves, among other things. Teresa, although she seems to have no household help or nanny, does not seem to understand the concept of a budget. She equips her new, spacious, custom home with over-the-top furnishings and fixtures and spends more money on designer and custom-made clothing for her kids in one outing than what most “real” housewives spend on clothing for an entire year.
What a difference a few years and a downturn in an economic cycle make. Suddenly, these women became a microcosm of what was going on in households across America. We viewers felt their pain and we could finally relate to them, at least on some level. They were not spending extra cash on hand; but in most cases, were spending more than they probably should have, putting them in a precarious state once the economy fell. They, like most Americans, regardless of their high household incomes, were not immune to the emotional catastrophe that can happen when a job or marriage is lost, serious illness occurs, or there’s a downturn in the economy.
The overarching lesson learned for all women is that regardless of income, real wealth is not what you make but what you keep. So, being inspired by the gals from Bravo, I put together a to-do list for smart housewives to follow so 
that their financial lives never become desperate.
Smart Housewives protect their family and their sanity by keeping a stash of cash. They keep at least six months of living expenses in a savings account (nine if there is only one breadwinner). Saving for a rainy day will help keep the family afloat if a job loss or drop in income occurs.
Smart Housewives save for the future. They know that by delaying some gratification today they can really have peace of mind and fun tomorrow. By the way, having “enough” assets to fund a profligate lifestyle in retirement can be challenging.
Consider this quick back-of-the-envelope calculation. A general rule of thumb for retirement planning is that you can safely withdraw a maximum of about 4% of your assets in retirement to avoid outliving your money. If you spend $400,000 a year after taxes, that requires retirement savings of at least $10 million. Correspondingly, if you need $40,000 in retirement income net of social security and a pension, it will require at least $1 million. Hopefully these women are setting aside enough annual savings to reach their target goal, and only then are they spending the balance on lifestyle expenses.
Smart Housewives live within their means. Being purposeful about spending allows them to align their dollars with their important values and goals.
Smart Housewives don’t rely solely on a man for their financial well- being. They keep their skills current and maintain education to protect themselves in the event of a divorce. They also pick men who see eye to eye with them on financial matters so that fights about finances are kept to a minimum. (Ed. note: See Planning for Financial Harmony.)
Smart Housewives discuss the finances and budget with their family. They aim to be good role models by showing their children that money is not something that is endless in its supply and that that living with a budget means making ongoing trade-offs with respect to their weekly spending.
Those of us who are smart housewives don’t have a closet full of designer clothes, a beautician on call to primp us for a charity event, or a plastic surgeon on speed dial. We can live vicariously through the gals of Bravo’s Housewives of series and then sleep well at night knowing that what we do have is the real wealth of an emergency fund, a growing retirement account and living expenses that won’t break our future “retirement bank.”
Laura Scharr-Bykowsky, CFP®, MBA is a desperate housewife turned financial planner. She provides fee-only financial planning at her firm, Ascend Financial Planning, LLC in Columbia, SC. For more information go to www.ascendfinancialplanning.com.
See more articles by Laura.
Are You Hiding From Your Finances?
