Good old sibling rivalries. They can take on many forms when kids are young:

“Why is his curfew 11 o’clock, but mine is 10 o’clock?”

“That’s my doll, go play with your own!”

“I’m a better basketball player than you ever were!”

As people get older, many of these childhood competitions and jealousies tend to fade. Sure, people forgive and forget. And, more importantly, we mature. Many people even get closer to their siblings as they get older.

All is good, right?

Sure…..that is, until they have to deal with dividing up an estate.

Sometimes, when adult siblings have to deal with such situations, everything is handled well. It’s all fine, and people pull together and move forward in life. Other times, it’s a little different. I have a friend who recently had to deal with the very unfortunate situation of his mom passing away.  In a situation like this, money is the last thing that most people are thinking about. Including for my friend.

He told me the story about how in the aftermath, he and his brother and sister assumed that the modest inheritance would be divided by 3 – in thirds for each of them, as documented in the will.

Then, when going through their mother’s home, they found a handwritten note from their mom, indicating that she wanted everything divided into fourths. Who, besides the 3 adult siblings, would get the other fourth? It would be my friend’s young nephew.

My friend’s sister had spoken up at the time, and said that since this was their mom’s wish, based on the handwritten note they all found, they should follow her wishes and divide it into fourths. This meant ignoring the actual will, which indicated it would be divided in thirds. At the time, my friend and his brother – the two other siblings involved – quickly agreed. They were in a mournful state of mind and didn’t have the inclination to even discuss things.

Fast forward months later, after their mom’s home was sold. As everything was to be distributed, my friend’s brother – the middle sibling – apparently had time to think about things a bit. He then sent an email out indicating that he thought everything should be divided in to thirds – as stated in the will.

Needless to say, my friend was caught in the middle. Does he align with his sister and support the idea that things would be divided by 4 – to account for his nephew? It would follow his mom’s handwritten note, but not the earlier, formalized will. The will allocated 1/3 for my friend, instead of 1/4 per the note. He wasn’t sure how to handle this.

Question #1: If you were in my friend’s situation, which position would you support, and how would you handle it? Please answer based on what you know up to now.

Continuing the story, my friend’s sister was livid. She thought that her brother (not my friend) should show more kindness to his nephew (her son), and be fine with him getting 25% of the estate. According to her, this was her mom’s wish based on the note. Plus, in her view, she has more needs than her brothers since she has a young child, so they should consider that when dividing the estate.

Question #2: What do you think of my friend’s sister’s view on this?  Please answer based on what you know up to now.

So, the sister then sent an email to her brothers. She indicated that while their mother’s note indicated that it should be divided by 4, they could divide by 3 per the will. Additionally, if  they wanted to make a contribution to their nephew’s (her son’s) 529 account, they were welcome to do so.

Question #3: What would you do if you were my friend’s brother, who took the initial stand of 1/3?  Please answer based on what you know up to now.

Interesting situation!

Here’s the outcome. My friend’s brother sent a note back, saying that he was OK with it being divided 28% per sibling (84% total for the 3 of them), then 16% for the nephew. The sister went ahead and agreed to it. My friend, at that point, decided he would go with the two of them and get the whole thing over with. He didn’t want to continue this tension, and just wanted everything to be over and done with. He stated that he thought that these are the types of things that can impact family relationships, and he just wanted to avoid that.

I then asked him if his position would be different if it was, say, a multi-million dollar estate. He paused, and said, “well, um, you know…” I didn’t pursue it further, but his reaction told me that his response would have been much different in that case.

Money talks, doesn’t it?

Thankfully, all ended up OK here. Family is more important than material things.

What are your thoughts on this situation, consider the questions above?

Saving money is obviously an important action to be taken to maintain strong financial health. It’s something that too many people don’t do, despite being widely encouraged to do so. On the other side of the coin, there are some people who actively save. Within that group, there are some that are passionate about saving.

I’m in that latter camp.  As I’ve gotten older I’ve taken a closer look at my finances and projected where I am compared to I would like to be long-term.  The results of this analysis have pointed me in the direction of increasing my savings rate. Of course, one can only save so much; if you grow income concurrently, your savings increases further.

Clearly, there’s something motivating me, might you agree? This “long-term” notion I mentioned at the beginning of the prior paragraph naturally points to a future a need for money.

Ok – so that’s nothing different than saving from retirement, right?

Perhaps.  But it goes further than that.

While some savers are motivated to squirrel away money for specific items (house, for example), paying off debt, or for a retirement filled with world travels – I’m primarily motivated by one thing: not being old and broke.

Sure, I have other “aspirational” motivations, such as a glorious retirement filled with traveling around the world, living in a very nice home, spending lots of time with grandchildren, generously giving to those in need, etc. Actually, I what I would really like is financial freedom as soon as possible.

Let’s get that party started quickly!

But really, it’s that avoidance of being old and broke that’s at the foundation of my interest in saving. I had always had that in some far corner in the back of my mind, but my recent increase in time spent downtown here in Chicago – as opposed to the suburbs – has increased my daily exposure to people begging for money.

Now, the area around Michigan Avenue is a fantastic area with VERY expensive real estate, particularly for here in the Midwest. Additionally, it has what in my opinion is the highest concentration of fine shopping, dining, and hotels in between the East and West coasts.  That said, this perceived prosperity draws a few beggars at times.

I really don’t like to see this, and it’s not because I’m annoyed at them for being lazy. Well, it might be for some of them, particularly those in their 20’s and 30’s.  But mostly, I just don’t like to see people in a position where they have nothing – no money, no home. Call me a softie, that’s fine.

What really gets to me, however, are the older people who I have seen.  While being on the street probably ages people, a few of the people I saw clearly looked to be 65+. The first such person I saw was a woman, the second one an even older man.

That could be someone’s Mom or Dad out there!

Now, who knows what happened in their life to get them to that point. Maybe they did some bad things? Or, maybe they had just one or two bad financial decisions or life events and they were out on the street? Tough to say.

I give a few dollars to people such as this. Hopefully an exceptionally generous person will step up and do more.

Anyway, once I acknowledge that I feel bad for them, I start to think “I don’t want to be them.  Ever.”

In the hierarchy of financial motivators, that’s at the top of the list for me. Or maybe a better way to think about is that it’s at the foundation of my personal finance hierarchy of needs.

What motivates you to save money? Not superficially, but at your core.  Why do you, deep down, feel the need to save?

The good life…..a beautiful home in a tony neighborhood. Private schools. A high end luxury car or high performance car – maybe both. Cool vacations. Frequent nights out for expensive dinners or entertainment. Shopping for nice clothes, the newest gadgets. All the best for today, and tomorrow is another day.

All of this is what many people have seemingly aspired to – or have gotten caught up in. Whether it’s the desire for nice things just for the sake of having them, or it’s the drive to keep up with the Joneses and maintain an image, many Americans have been working for this type of life.

Many people still keep this approach. I’m willing to guess that even if these tendencies have been muted lately in a lot of people, they are still there and are just dormant for now but will re-emerge. However, for others, the recent economic conditions in this country– namely the manifestation in job losses, home value declines, and the topsy-turvy stock market – have caused a shift in perspectives when it comes to money and its role in our happiness. It may be a smaller segment of the population, but for some, being frugal is now cool.

I can relate, because I’m one of those, to a certain extent. Now, I have always had some focus on saving and investing, but have aspired to some of those nicer things to a certain degree. I still want certain things, and do set long-term goals that I am working toward when it comes to those things. Goals are great, and its fun and exhilarating to work toward them. But higher on my list is living within my means and saving for retirement, medical issues, unexpected financial emergencies, and overall financial peace of mind.

Why? Because these economic times have left the impression on myself and many others that ups and downs in the economy WILL happen, and to large extent, most of us WILL be impact to some degree. Some of us be impacted a little bit, some of us will be impacted tremendously. These ups and downs have caused people to take another look at what is truly necessary in day to day life, and how limited financial resources should be allocated.

Is it worth living in an expensive house with big mortgage payments and tax liability, that don’t go down even if the value of the house goes down? Is the house truly an asset as many of us have been raised to think, or can it be a huge liability as many going through foreclosure have come to find out? Is it worth driving an expensive car with monthly payments? Or is it worth spending far less, perhaps paying cash up front, and saving the extra money?

Ultimately, what many people have found out is that the income streams that most people use to feed their families are not guaranteed. If a job is lost, there might not be a replacement job to be found in short order…it may take a long time, and the replacement job may not pay a salary comparable to what was made before. That’s if a replacement can even be found in the same industry or line of work. With limited or uncertain income, what should we focus on first?

Many people are realizing that its best to focus on necessary daily expenses while preparing for future cash flow needs that could result from loss of job or the medical or unexpected financial emergencies I mentioned before. The stress of meeting needs today has jolted people into thinking about the rest of their lives. Is it worth it to have all of the finest things today, while worrying about tomorrow some other time? Or, is it better to live with the necessities today, and forego the finer things for additional savings instead?

What’s the tradeoff? It’s the mental dissonance of living with less than you technically could purchase now, knowing you could buy more – in exchange for the peace of mind that you have by knowing that you are taking pressure off yourself in future years. In its simplest form, it could be seen as delayed gratification. But looking at it further, its risk management because today you have income, but you really don’t know what could happen in the future. You might not have income, or you might have it but have massive cash outflow. Smartly, many people are in a way “self-insuring” themselves by living on less today so that they preserve the possibility of at least living on something in the future. Given that positive cash flow appears less certain now, in the minds of many, the value of that peace of mind that comes with saving has increased. Yes, the value of savings not just in monetary terms but in peace of mind has increased. In the overall scheme of things, savings are more important now than before to many people.

Pulling these thoughts together, what it comes down to is that the fear of financial problems has changed the value equation for what we invest our money in. Instead of buying all the luxuries in life with our current income, many of us are valuing peace of mind and financial FREEDOM more. And it redefines what it means to be “rich” – not just having money to buy the best things or luxuries, but enough money to reduce pressure on our minds and bodies. It’s cool to have freedom, and live responsibly and be out of financial misery.  It’s not as cool to talk about how you bought a big house 3 years ago with big payments, one which has declined in value substantially since then and your hard-earned equity has been wiped out.

Ah, the good life……a good enough home in a safe neighborhood with quality public schools. A practical, fuel-efficient, safe car. Inexpensive family getaways. Inexpensive, meaningful family activities for entertainment. Shopping for good, reasonably priced clothes on sale, and the technology we truly need. At least we have the basics for today, and the basics for tomorrow. And if we’re smart, maybe tomorrow will offer those finer things. That peace of mind makes us truly rich.

This article was included in the Carnival of Personal Finance – Blogthority.com Relaunch Edition! Make More Money Blogging edition