Money management for financial retirement should happen long before you hang up your work clothes for the last time and head off into the sunset with your gold watch. Learning to manage your money while you still have disposable income is the best thing you can do to guarantee a stress free retirement.
Set a budget for money management for retirement
Learn how to budget and set yourself a monthly spending limit and then don’t exceed that budget. You should allocate a smaller budget than you actually think you need. This will build in a little wiggle room and give you some peace of mind. Over time, the little savings you make each month can provide you with a nice boost to your retirement fund.
Living on a budget is one of the most difficult things that many of us have to deal with. It’s tempting to live on the edge of our budgets. We looked before at how to create a budget. Once you have an itemized list of expenses you will realize where your money goes each month. It’s often the little expenses that add up but they are sometimes the easiest to reduce. Make your own lunch to take in to work rather than paying for a takeaway sandwich. You can actually get health benefits also if you pick healthier options by planning ahead.
Add up the total of everything you spend and see where you could make savings. Don’t just say you are going to spend less in certain areas, you need a specified plan of action for doing so. Like any goal you need to make it SMART, that is Specific, Measurable, Attainable, Relevant and Timed.
Money management at home
You can also make savings in your home life.
- Batch cook meals and freeze some so that on those evenings when you are too tired to cook you don’t need to order a takeaway.
- Switch off lights and equipment when you leave rooms and cut down your energy costs.
- Buy in bulk where possible and use coupons to save on your grocery shop.
Once you start cutting costs you will find that you can live happily with much less than you thought possible. If you have a family involve them and turn it into a fun challenge. See who can come up with the best money saving methods each week.
I am not suggesting you live like a Spartan unless you are already in serious debt. If you are in debt then go and get some help; there are many organizations that can help you establish payment plans with creditors.
Little and often – changes soon add up
For most people who are living well at present but need to plan their money management for retirement you need to make changes gradually. If you deprive yourself of all the luxuries in life you may be tempted to blow all the good work when you are feeling down. Rather than a massive splurge you want to award yourself small treats along the way.
Set goals for saving as well as your spending and you will find that you are much better prepared when you reach retirement. You may find that you save enough that you can increase your investments which can go on growing until the big day comes.
Learning to manage money well is something that is best learned at an early age. I’m a great believer in teaching children to manage money but that is no help to you if you haven’t had that benefit. Make sensible adjustments as you approach retirement and that will serve you well when you are living on a much reduced budget.
Little things you do on a daily basis will become habits that over time will come naturally. Those habits will serve you well throughout life and into retirement. They will help you set priorities for your spending once you have a much reduced income.
Once you reach retirement you will find that some costs go down dramatically anyway. You won’t have commuting costs and no temptation to go out for lunch or to go out after work. There is much to be said for finding pleasure in things closer to home. You may discover that like many of us in retirement you will find enjoyment in things you haven’t had time for before.
There are many hobbies which are cheap or cost nothing to enjoy. Walking or cycling, gardening or some simple DIY can all give great pleasure without blowing your money. You may even decide to start a home business to generate some extra cash. There are many options available to make money from home. You should have a search around this very site and you will find ideas from affiliate marketing or course creation to creative ideas for passive income.
Simple money management can ensure you have a retirement that is both financially secure and also fun.