A successful retirement is a dream for most middle aged people, but the truth is that many of these individuals spend a significant fraction of their hard earned salaries and savings by the time they are close to their retirement, as a result of poor retirement planning and improper money management. While discussing retirement plans and money management makes several individuals wary, going through the drill is very advisable and highly recommended by the financial experts. Effective planning and execution in always the key to a successful retirement and the first step begins with looking into ways which enable one to track spending. Making a personal and family budget plan, and tracking your expenditures always helps in better savings, which is essential for one to retire successfully. No one would want to be dependent on their spouse or children post-retirement, thus hurting their self-esteem and respectability.
Ways to track spending
Budget Spreadsheets
The easiest way to track expenditure would be with the help of a budget spreadsheet, which can be done manually or via a software program available on the internet free of cost. This software allows access to one Excelsheet per month in which you can enter all the expenses made by you in detail, like restaurant bills, oil refills, gasoline expenses, amounts spent for household needs and education fee, shopping expenses etc. Separate the needs from wants, and analyze the expenses. Reflect on the areas where you could have spent less, and make a resolution for preventing those expenses.
Monitoring credit card expenses
Credit card is of great use in times of contingencies, but most people misuse the freedom quotient that tags along with credit cards by spending thoughtlessly. People go on swiping their plastic for purchasing all the things they want, and soon they realize that they face serious debt problems, with no cash or credit limit left for purchasing things which they actually need for running their household. Make a detailed of your expenditures through credit card and analyze the spending. You will realize that most of these were for luxuries that you could have avoided.
There is another effective method for one to reduce their expenses through credit cards – just stop using it for a few months! Paying in cash would make you wiser, and you will be a better judge of your needs and expenses.
Switching from credit card to prepaid debit cards
Prepaid debit cards allow you to spend only what you load them with, and hence they contribute towards better savings and a successful retirement plan. Prepaid debit cards offer the same convenience as credit cards, minus the overdraft limit. Switching to this mode of plastic can call for some responsible spending on your end, and hence is highly recommended!
Investment Advice
Calculate your post retirement costs and compare them with your retirement savings. This would give you considerable estimate for the leverage and spending power you would be having. Talking to a financial expert about possible investment modes with low risk and good returns right away is a good idea.