In modern times, it’s hard to imagine a former president being broke. Presidents currently earn $400,000 per year while on the job, plus a healthy annual pension (in 2008, it was nearly $200,000). More recent former presidents, such as Clinton and the Bushes, have also earned a fortune through speaking gigs and book deals. Sure, you may have to live with major security threats the rest of your life, but you’re rolling in money until you die.
Monday was President’s Day, and after recently watching a show about presidents on the History Channel, I was sad to hear that some former presidents from long ago were very poor — if not broke — after leaving the office. While it’s not surprising that some were in debt before presidency, such as Abraham Lincoln, I decided to dig into the post-presidency debt concept.
NBC News explains that early presidents were landowners, so their financial standing depended largely on crop yield. In the mid-1800s, NBC says, most presidents were lawyers who just lived off of those salaries. “They rarely amassed large fortunes and their incomes were often almost entirely from their salaries,” the article says. “These American presidents were distinctly middle class and often retired without the means to support themselves anywhere close to the presidential lifestyle.”
It got so bad for Thomas Jefferson and Ulysses S. Grant that both men were insolvent after their presidencies. Harry Truman also struggled after office, leading to the enactment of the Former Presidents Act of 1958, which set up the retired presidents with an annual pension, office allowances, travel funds and mailing privileges.
I’m glad they at least can retire comfortably after four to eight years performing one of the hardest jobs on earth. For those of us without lifelong pensions, however, we have to really pay attention to where our money goes. Explore my list of my 10 favorite personal finance blog posts from the past week for tips on smart money management.
1. Afford Anything reminds us of a concept that I often struggle with: a good deal isn’t a deal if you don’t need it!
2. The Money Principle explains the three stages of debt repayment you will go through in the process of paying your dues.
3. Money Crashers discusses eight sneaky expenses that will eat away at your budget and how to avoid them.
4. The philosophy of “you only live once” can be empowering, but it can also be abused. Free From Broke explains how to embrace this YOLO mentality without wrecking your finances.
5. An emergency fund is often touted as a key personal finance tool, but Simple Finance Blog warns against building up an unnecessarily large amount.
6. Enemy of Debt shares how ensuring financial peace and cooperation on budgeting with his wife makes his marriage work.
7. Squirrelers advocates smart purchases, but he lists five things that shouldn’t be skimped on, including nutritious food and car repairs.
8. Club Thrifty also provides a list of five items they think are worth spending more on rather than looking for the cheapest option.
9. The Frugal Path shares an idea for those who have trouble grasping their credit card expenses: draw a picture of your purchases to help them feel tangible.
10. PT Money reveals how to have an “app party” to maximize your credit card rewards and earn free travel.