Money may not solve all the world’s problems – but it sure can help you have more control over your life and the things you need to live it well. So when you’re thinking about your future, how can you plan to have more money (read: more control) when you are ready to retire?
In today’s episode of Your Money Minute with Tracy Stewart, CPA, I want to talk about using a budget to help plan for retirement. Cutting back your expenses when saving for retirement is going to help you cash out big time when it comes to actually putting up your feet and living for those many, many tomorrows. But here’s the thing: Unless you keep a budget and track your expenses, you won’t know what “cutting back” really looks like, will you?
I encourage everyone to keep a budget and track expenses. You don’t need a fancy app or formula to do it, either. Paper and pencil work just fine! I recommend you start by keeping track of three months’ worth of expenses. Write down every purchase, every check, every transaction… Be detailed. If it’s not written down, you can’t track it.
When you have a few months worth of expenses written down, you can begin to determine if what you make (your income) is more or less than what you spend (your expenses.) If you are making more than what you are spending, let’s start stowing that away — and fast! If not, that’s okay. Let’s figure out where you can cut back… What can you do without — even for just a short period of time. Nothing is permanent, you know. And this is minimalism… You don’t have to cut everything — just enough to help you sock away money for your future. It’s to help you hit your goals.
Financial independence is unbelievably liberating. Having enough money for your retirement years is freeing. Make sure you prepare now – so you can enjoy yourself later.
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