Growing up, I remember watching reruns of “The Golden Girls” with my mom. We loved watching the antics between the four women, even if I didn’t understand all the grown-up jokes.
Years later, I still love watching “The Golden Girls" on my own or with friends.
As a kid, I never questioned why four grown women would live together. It just looked like so much fun. When I was on a trip with my college friends years ago, we joked about how we should all live together if we outlive our husbands.
Now, as an adult, I can clearly see why just a few sound financial moves could have prevented all of the characters' problems. Here’s what I learned about money from Blanche, Dorothy, Rose and Sophia.
A bond of friendship, finances
While the four women have an enviable friendship, their bond is built on one thing: money. Or a lack thereof.
Blanche, who owns the house, has to have roommates because her income doesn’t cover her mortgage. Dorothy, whose husband divorced her after 38 years of marriage, also can’t afford to live alone. The same is true for Rose, whose husband died, and Sophia, a widow living off Social Security. Money is what brings them together.
Now, as a financial writer and speaker, I can clearly see what went wrong for all four women — and it wasn’t just bad luck.
Not enough life insurance
For both Blanche and Rose, their husbands clearly didn’t have enough life insurance to cover the women’s living expenses after they died (an irony, since Rose’s husband was an insurance salesman).
“They would be in what is called the ‘black-out period,’ not qualifying for survivor benefits (dependents in the home) and not old enough for widow benefits (age 60 early and reduced),” said financial planner Megan Kopka, CFP, RLP of Kopka Financial.
We need your help to stay independent
For Dorothy, her salary as a substitute teacher doesn’t let her build an adequate rainy day or retirement fund, even though she receives alimony from her ex-husband. As the matriarch of the group, Sophia lives on a fixed income and doesn’t have a steady income source.
Whether you're married or living with someone, you need to get life insurance if you rely on their income to cover your expenses. Premiums for term life insurance are generally inexpensive. According to life insurance provider PolicyGenius, a 30-year-old man will pay only $29 per month for a 20-year, $500,000 policy.
To calculate how much you need for life insurance, add up your monthly expenses and multiply that by 12. Subtract your current salary from that figure. Then, multiply that number by how many years you want covered. Most people choose to have life insurance last as long as their mortgage term. Also, make sure to add in any future major expenses, like your child’s college education.
Poor financial literacy skills
During the series, Dorothy always explains that her husband handled the finances, even though she also worked. If she had had more financial literacy, she would have been able to invest on her own so she would have had more savings later on. She could have also managed the family’s budget so she would have known exactly where their money was going.
Even if you trust your spouse to manage the household finances, it still makes sense to have your own retirement savings. This can be in the form of an IRA, 401(k) or 403(b).
“I recommend that women have a variety of different accounts, such as retirement plans or IRAs, as well as investments that are not tax-advantaged so that they have flexibility when they need money,” Laura J. Cook, CFP Flourish Financial Life Planning LLC.
In one episode, Rose finds out that her husband’s company’s pension is going away, which means she either needs to find cheaper living arrangements or a better-paying job. Again, this shows why relying on a company pension can be tricky and why it makes sense to have your own retirement savings separate from a company pension.
No matter where you are in life, investing for the future can give you more freedom so you can choose what your “golden years” look like. That way, if you still want to live with friends, it can be a choice and not your only option.
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