J.D. is on vacation in Alaska. This is a guest post from Neal Frankle, a Certified Financial Planner, and the author of Wealth Pilgrim, a blog about his financial journey.

If you know someone in their fifties, don’t be surprised when you discover they’re afraid. I’m 52, and I checked with everyone. They confirmed it. It’s true.

Ten years ago, all of our investments were booming: real estate, the stock market, you name it. It looked like we were headed toward retirement heaven. And we had no qualms about spending money we didn’t have.

Now, of course, we’re in trouble.

  • The equity in our homes has melted away. Even if we were responsible and didn’t take out home equity lines to pay for trips to the Bahamas and Bahrain, the slide in values has erased a good chunk — if not all — of our equity.

  • Retirement accounts have been shredded twice over the last decade. We’re lucky if we have what we started with ten years ago.

  • Our kids are moving back in with us. Need I say more?

  • We’re older. Besides the obvious depression associated with that, we now have less time to make up for all the money we no longer have.

  • Inflation is just around the bend. How are we ever going to be able to pay for those lattes at Starbucks?

  • Our dreams are now nightmares. We struggle with our money and our marriages. We had plans of early retirement, extended visits to Maui, and long walks along the River Seine. Now, we’re looking at working until we can’t, even if it means punching receipts at the Costco and moving to Barstow.

Nothing about this is news to you of course. What might be important, however, is to consider this a “teachable moment”, especially if you’re now in your thirties or forties.

I can tell you that when we were in our thirties and forties, we didn’t look to the people 10 to 20 years our senior to try to learn from their mistakes. Don’t make that same error.

Specifically, here are the four most important take-aways:

  1. Don’t assume your home is going to fund your retirement. It won’t. You have to live somewhere, and your equity may not be as great as you project. If I’m wrong….you won’t complain about it. But if I’m right and you ignore this warning, you’ll be licking your wounds all the way to Costco.

  2. Try like hell to pay off your mortgage by the time you’re 55. It may not be possible, but try. If nothing else, it’s a way to force yourself to save. You’ll thank me for it later.

  3. Don’t send your kids to schools you can’t afford. Never take on debt to finance Junior’s college or even high school. Don’t count your chickens before they are hatched like we did. We assumed that our investments and earnings would continue to grow so we thought it wouldn’t be a problem to spend that money. We learned how wrong we were.

  4. Think about saving as any other expense. Determine how much you need to save monthly and then do it before you spend a dime on anything else. It can’t be an afterthought. Don’t have the mindset of savings “whatever’s left over” because there won’t be anything left over.

I’m not wringing my hands, and I’m not trying to criticize you young pups. I think the recent economic turmoil is a fantastic opportunity for everyone to really “wake up”, take notice of what’s working and what isn’t, and then do things a little differently.

I’m astounded when I come to work and see people 20 or 30 years my junior who still don’t get this message. I know I’m looking at people who are a bit further down the road to try to learn from them. I don’t think it’s too late. How about you? Have you changed your financial behavior as a result of what you’ve seen others go through?

Previously at Get Rich Slowly, Neal has written about finding financial serenity, how to read a mutual fund prospectus, the benefits of starting a side business, and peer pressure and money.

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This article is about Planning, Retirement