Page 39 - Ready Set Retire

Ready. Set. Retire!

Ready Step 3: Start with What You
Know

This is kind of tough because it requires both a
different way of thinking about your process, and
focusing on things most people don’t want to focus
on, like a budget. However this is crucial. Without knowing
how much you spend, how can you possibly know how much
to plan for?

Take Control

It’s easy to do a budget, especially if you use some kind of
computer software to pay your bills. If you don’t, many banks
provide detailed statements of your checks that can be
downloaded and sorted in Excel or Google Sheets. To be sure
it’s accurate, you should take a full year and average all of your
expenses out by month.

Once you have done that, estimate which expenses will
continue, and which will not, over time. In addition, take a look
at your pay stub if working, and your tax returns if not. Make
sure to account for taxes, health insurance, savings deposits,
etc., as all of these will impact your cash flow.

It’s often useful to have two columns; one to record what you
are currently spending, and one to estimate future spending.

29