Chasing dollar…..always

Posts tagged ‘budget’

How to prepare your retirement budget?

For quite a few, retirement appears like a far-away stage of their lives, filled with carefree days with absolutely nothing to do but travel, sip wine and watch the sun set. Even though this might be the reality for some, for many people who don’t budget effectively for retirement, their golden years are filled with work and penny pinching, not relaxing. Planning a spending budget for retiring is very vital along with a vital tool to properly saving.

A generally utilised mathematical approach is to say that you need, on average 70 or 80 percent of what you make now per year to live on when you retire. A big part of what you might want to figure in is how you plan on spending your retirement years. If you are looking to travel the world and remain at 5-star hotels, you might desire to spending budget on the high side. If you are happy staying at household and relaxing, you are able to spending budget on the lower end.

To figure out your retirement budget, there a couple of things you must do. First, figure out where your retirement income is going to come from and how much of it there will likely be. A lot of people get retirement income from many different sources like the 401(k) plan they had at different jobs they worked over the years, social security payments, retirement investments and savings too as any possible income from a job that you would work soon after retirement. To figure how much you would be finding from social security, check the statements they send you inside the mail plus the amount you’d be finding is broken down there.

The next logical step is to try to estimate your list of expenses. Though this might be extremely tricky for those which are searching decades ahead, it’s most effective to try to put together some kind of plan. The top way to approach it is to itemize your expenses and break them down by category, for instance living expenses, utilities, health care and so on.

A couple of final tips that can enable you to inside the long run is to attempt to take care of all of your debt before you retire. Paying off the credit cards or your mortgage in 1 lump sum will help you out inside the long run.

Don’t forget any possible dependants. For anyone who is responsible for the expenses of other people, you must figure them in, too.

Retirement can either be a wonderful time filled with happiness or it could be a scary time filled with uncertainty. The road you walk down is up to you. The options you make now will influence how you spend the most beneficial years of your life.

How can you budget household finances?

Most of the people have a hard time managing their personal budget. Almost all of them end up spending more than what they can afford to and consequently invite debt problems. Therefore, it is very important that you take certain steps to set up a budget for yourself.  As you might already know, budgeting is a process of allocating one’s salary or profits according to one’s needs and expenses. Yes, it might at first sound to be a bit difficult but with a little determination it is not very tough to stick to your budget.

Take for example, you visit a supermarket today and an expensive pair of jeans catches your fancy. What do you do? Probably, you will end up purchasing the same. This would not have happened had you had a proper budget in place. With a solid budget, you would just know where you need to spend how much. All your unnecessary expenses would be curtailed and thus you will be on your way to paint a better financial picture of yourself.

So how can you go about building a budget? List down all the things that you need to make payments for. It could be groceries, transportation, gasoline, mortgage payments and the like. After that is done, set up an estimate on how much you can afford to pay for each item on the list. This is the perfect time to cut down on all your extra expenses. Weed out such expenses and start concentrating more towards your savings and investments.

It is also important to compare prices before you set out to shop. Settle for the shops that offer discounts and reasonable prices. Purchasing items in bulk is also a good idea to bring down your overall costs. Cut back on snacks and convenience foods. A major chunk of expenses is lost on entertainment, so it is advisable that you bridle your expenses on this front too.

Buying brands is a hobby and a matter of ego for most of us. Realize that opting for cheaper products might as well offer you the same advantages. Make use of coupons to avail discounts and you can also shop at thrift stores to purchase items at really low prices.

You should keep track of your savings for at least three months. This way you will be able to make adjustments to your budget plan if needed. Treading a little carefully with your finances can reap rewarding results and this in turn will motivate you to stick to your budget and enjoy an ever-lasting financial success.