Most of us have fits and starts on our financial journeys. But in the end, it comes down to “prosaic prudence,” or to put it simply, a humdrum approach, according to Jonathan Clements, a retirement expert and author of the new book “My Money Journey.”

Clements, who spent two decades at The Wall Street Journal, where he was the personal finance columnist, is also the founder and editor of HumbleDollar website. In his latest book, he shares the financial lives of 30 people, ranging in age from 30 to mid-80s, including a high school teacher, a minister, and a software engineer.

“When we write about our money journey, we inevitably describe our life journey,” Clements said.

He offered some advice, and some insights, in a conversation with Yahoo Finance about everything from the role that parents play in shaping their children’s future financial lives to recovering after financial mistakes.

My Money Journey

My Money Journey

Edited excerpts:

What inspired you to write this book?

One of the strengths of the website I run is that I have everyday Americans tell their financial stories. When they write for the site, they’re writing about their personal experiences such as how they’ve dealt with retirement, how they’ve dealt with down markets, how they’ve dealt with financial emergencies. I invited the contributors to tell their full financial story. The message: If these everyday Americans and investors can reach financial freedom, so can you.

What do you mean by financial freedom?

It means money isn’t a regular worry. It doesn’t mean that you can buy anything you want, but it does mean that you have enough money to meet your wants and needs. If your financial desires are relatively modest, you could be financially free with a relatively small portfolio.

Only five of the contributors are women. What gives?

There’s a less sinister answer. These are the readers who have followed me from the Wall Street Journal, and when I was there, it was mostly read by older white males. But I do think that there’s also a societal issue here, which is that for far too long, men have been in charge of financial issues in households, and women have taken the backseat. I think it’s entirely unfortunate, and hopefully, generations to come will be much more balanced about it.

You are known for extolling frugality in your own financial advice, how does this play out in the book?

A thread that runs through is that these 30 people are disciplined. They’ve become very good at delaying gratification and living beneath their means. That is the most important financial skill. It’s much more important than being able to pick good investments. It’s much more important than being able to decipher Social Security or figure out the best credit card to use.

What are some of the other major themes in these money essays?

Most of the contributors are dedicated index fund investors. A lot of them didn’t start out as index fund investors. Many of them made mistakes early in their financial lives, but eventually came to realize that they were harming their financial future by chasing the latest hot stock, or trying to guess which way the stock market is headed. Eventually, they settled down, and they spent many years saving diligently and shoveling those dollars into index funds.

One of the lessons of the book is that even if you mess up in your 20s and 30s and didn’t save as much as you should, or made foolish investment mistakes, it doesn’t mean you’re sunk. You can still retire in comfort in your 60s.

What lessons can we glean from these people’s stories about how to retire in comfort?

Working a little bit in retirement can help. One of the great silliness out there is that I’ve had countless readers over the years tell me that if you’re still earning money, you aren’t really retired. That is nonsense. It gives retirees extra income, but also it gives them a sense of purpose. And we all need a sense of purpose in retirement. We all need a reason to get out of bed in the morning. I would encourage anybody who’s approaching retirement, or in retirement, to think about what it is that will give you that sense of purpose. Because if you retire with the notion that you’re going to sit around all day watching the Lifetime channel and playing golf, you are destined for a miserable retirement.

Jonathan Clements

“Everybody should sit down and write their financial life story:” Clements. (Photo courtesy of Jonathan Clements)

Were there any surprises in the stories?

One of the biggest surprises is that there is more than one path to the top of the mountain. People reach financial freedom in all kinds of different ways. They don’t all enter the workforce in their 20s, start saving like crazy, and are smart about investing from the get-go, ending up with these huge portfolios. You know, many people try all kinds of different paths. Our financial lives are messy. We make mistakes. We wander off the path multiple times through our careers, and that’s fine. That’s the nature of being human.

Joan Didion wrote, “We tell ourselves stories in order to live,” your book reminds me of that a bit, don’t you think?

In a way. But everybody should sit down and write their financial life story. By writing down that story, you’ll get insights into yourself and what you’ve done right, and what you’ve done wrong. But also this is a chance to memorialize something that will be of value to future generations. I mean, I know very little about my great-grandparents. I would love to read their account of their financial journey, because if I read about their financial journey, I would also be reading about their life journey.

Did your contributors find peeling back their story to tell others was uncomfortable?

Absolutely, but they did. Money is the last great taboo. People will tell you about every other aspect of their life, even their sex life, but they will not have an honest conversation with you about money. They will not tell you what their net worth is. They will not tell you honestly how their investments have performed. They will not tell you their salary. I’m not saying that everybody should run around exposing their financial life to the world, but at a minimum, you should be discussing all of this stuff with your kids. You should be telling them where things stand financially. At some point, they may be taking over your finances.

What can our kids learn from our money stories?

If you’re a parent, the influence that you have on your kids is scary. One of the things that comes through in the book is that parents have a huge influence on the financial thinking of their children. Many of the people who wrote essays lived in the financial shadow of their parents for much of their adult life and struggled with the lessons that their parents taught them.

You should think really carefully about what financial lessons you want your kids to learn from you. And it’s not just the words that come out of your mouth, it’s the things that you do. They will model your behavior. If you spend your days shopping like crazy and stressing over credit card debt, think about what that’s going to mean for your kids down the road. They’re either going to imitate that behavior, or they’re gonna go to the other extreme.

In your money story, what’s retirement look like?

I’m 60 and semi-retired now. I envision a world where I work less, but keep working. I plan on delaying Social Security until age 70 to get the maximum benefit possible. Social Security is the best income annuity out there. It’s government guaranteed, partly tax-free, inflation indexed, and you’re guaranteed to get it for the rest of your life. Delaying Social Security, I believe, is the key to a comfortable retirement.

In terms of my portfolio, my plan is to have around 20% in cash and short term bonds and 80% in stock index funds. That may sound like a very risky portfolio. But with 20% in cash investments and short-term bonds, I have essentially five years of portfolio withdrawals there, assuming I use a 4% portfolio withdrawal rate.

And on top of that, once I start getting Social Security at age 70, it’s going to cover much of my retirement expenses. So my portfolio at that point is less about funding my retirement, and at least part about ensuring a nice bequest for my kids and some that I will hopefully one day give to charity.

Kerry Hannon is a Senior Reporter and Columnist at Yahoo Finance. She is a workplace futurist, a career and retirement strategist and the author of 14 books, including “In Control at 50+: How to Succeed in The New Work of Work” and “Never Too Old To Get Rich.” Follow her on Twitter @kerryhannon.

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