Retiring in 2017? Check out these simple budgeting tips to be in charge of your finances:
1. Change the old budgeting rule
While still working, the equation income minus saving equals expenses may be effective. But after retirement when there is no stable income, do budgeting differently. Divide your dollars into 3 parts: fixed essential expenses (such as utility bills, grocery bills, housing costs, debt obligations if any, and so on); savings (like depositing money into savings account and emergency account); and extra expenses (like entertainment, gym membership, etc.).
2. Make room for extra money
When income is limited, make way for additional streams. Go for a part-time job like tutoring or freelancing. You can also be a bit creative, and save hundreds of dollars. Savings is another way to make room for extra money. For example, if you have an extra car, rent it out in a car rental marketplace and get paid for it. Or, if you are having a party, borrow the barbecue grill from your friend rather than buying it only for that occasion.
3. Become a smart consumer
Cash flow will slow down after retirement; so, be a smart consumer. By that I mean, think before you spend each penny. Try to do more comparison shopping and look for ways to cut down expenses like switching to a prepaid cell phone plan and getting cable and Internet connection from the same provider, among others.
4. Change your lifestyle
Don’t continue to live a lavish lifestyle after retirement when there is a shortage of money. Look for cost-effective ways to live your life. Avoid borrowing money from others only to maintain your high-class lifestyle. Live your life with what you have. Otherwise, you will fall into debt. Don’t make your retirement miserable. Remember, one mistake in retirement may ruin the rest of your life.
5. Plan for the first month of retirement beforehand
You are going to enter a new life. To be a bit relieved, plan the first month of retirement while still working. Think of how you want to spend your retired life. Make a rough retirement budget, check out any loopholes and make adjustments where needed. By doing so, you will not get stressed out with budgeting after you retire. Retirement budgeting is not really different from budgeting while you are still working. It is just that you have to be more careful with spending.
Best wishes for your new life!
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A guest post by Phil Bradford. Phil is a financial web enthusiast whose passion for helping people stuck in financial problems has earned him recognition in the industry. Besides writing financial articles, he loves to travel and cook.
Photo Credit: 401(K) 2013
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