Retirement does not mean you should stop spending. It is rather the time to enjoy the money you have earned and saved. Money is a commodity which needs to be used and spent to make the most of it. Retirement plans available in the market might not suit you as they are not personalized. The best way is to build your own retirement plan according to your own specific needs. Since you will be not working full time when you retire, you have to make a plan to effectively replace 80 percent of your income. Here a few tips for building your own retirement plan.
- Save for the future – The first step is to start saving for the days when you will not have regular income. The traditional way is to save 10 percent of your pay every cycle. However the better plan is to save 30 percent of your annual income. It will help you retire rich.
- Invest in the right place – Money lying idle in your checking account will devalue due to inflation. Hence you need to make effective investment. Spread out the money in form of real estate, stocks and bonds. Build a portfolio to minimize the risk. Also keep some money in your checking account for emergencies. This should be around 20 percent of the total savings.
- Plan and Pay off debts – You should have zero debts by the time you retire. This will help you be stress free and have more money to spend on enjoying your life. Make a plan to pay off all debts like mortgage, auto loans etc. a year before you retire.
- Start working part time 5 years earlier – Do not quit your current job early. Rather start working part time on weekends to prepare for your retirement. You will have work to do and the money earned will add to your riches. When you are ready take the pending holidays and work in the new part time affair.
- Start your own business – There are many examples of people becoming entrepreneurs after retirement. The reason is they have enough money saved and can take risks easily. You can also explore this territory if you actually want to work full time even after retirement.
Taking cue from these tips for building your retirement plan, you can actually be more productive in the later life. This is due to the corpus you will build which will take care of your needs and keep you in the pink of health.
Funds you have are not enough? If you want some extra cash there are many ways to earn it.The ways may sometimes sound unethical, but are effective.
- Sell hair – Have a great crop of hair. You can sell hair for a fortune. There is no harm in selling hair. It will grow back on. It can be a regular supply of money. Only you have to take extra care of you hair. Isn’t this a nice way to earn quick cash.
- Baby sitting – Do you love kids and can manage them well. There is a way to earn extra from this talent. You can offer this service to your neighbours and friends on weekends to earn the extra buck.
- Collect the change – The small notes and coins go unnoticed. Collect them and you will find that they are worth very much at the end of the month.
- Sell stuff you do not use – There are many options to sell old stuff you do not use anymore. You can put an online advertisement for free and get more money than selling it in the open market. Great is it not.
- Sell scrap – All the scrap lying in your yard might be worth selling. Visit the local recycling centre for the knowledge what you can sell there. The beer cans, glass jam jars and fruit cans are all worth something.
- Find online work – You can earn a bit online too. There are many ways to earn online. You can read and learn how to do it here.
Making very small change in habits can help to save a lot. The most difficult thing to do is to start. The following tips will save you a lot in these difficult times.
- Knowing what are your expenses – We tend to spend money. Without caring to know where we spend it. The age-old practice of writing down each penny spent will help you to know what your expenses are. Small expenses like expenses on a cup of coffee should be recorded.
- Organizing – After recording each and everything, organize them under different heads like grocery, loans, stationary etc. This will help you in the next step.
- Budgeting – You have good knowledge of your expenses now. Go ahead and make a budget to plan the expenses. Create an emergency saving fund and put money in that fund. It can be a piggy bank to start with.
- Save regularly – Planning does not help if you do not act. Make it a point to save at least 10 percent of your monthly earnings. Look out for places where you are spending more and cut down.
- Set Goals – Challenge yourself and set goals of savings. You can start by saving for the emergency fund. This is to keep on going for six months in case you lose your job.
- Prioritize – Making saving your highest priority. It will help you focus.
- Make your savings work – Do not let the savings stagnate in the bank. Start by investing in bonds and mutual funds. After experience of six months you can go ahead and invest in shares. Believe me your money will grow and you will be happy.
- Check your Savings – Always keep an eye on the growth achieved every month on your invested money. Also keep on the good habit of saving. It will inspire you.
I am going to get rid of the mistakes I did the last time.I am not talking about business. It is reflecting back on what I did the right way and what things went wrong.
Planning the year does not mean financial planning only. It involves balancing between family, work and some personal ambitions. There are a few exciting ways to do it.
- Make a vision Board – Take a board and paste pictures of what you want to achieve. You can divide the board in months.
- Start using the Diary – Diary as a planner really works. Just write things you want to accomplish and note them down when you have completed it. It will motivate you to go on and also will help keep record.
- Keep Record of Earnings and Expenses – This is what my father used to do. He used to note down every credit and debit from his bank, in a small book of his. It helps to follow this technique as you will always know where you are financially.
- Start working on your goals – Just Planning and no action does not take you anywhere. Break down your plan in daily, weekly and monthly actionables. Review after every day.
Keep on your spirits going. You will surely rock this year. I am sure I will.
Wartime Christmas was not the celebration we expect these days, with rationing and food shortages. Giving presents was discouraged and unless you had reared a turkey yourself one was not going to be on a wartime table.There is an interesting and sad but amusing story about a pie gone wrong, that you can read it here, tells you what Christmas was like then. Gran’s diary was very similar but full of positive actions and even excitement for the coming festivities. One I share today. As Christmas approaches the differences between last year and this are considerable. Yes we don’t have much more money but with foresight, planning, watching the pennies and a positive attitude we have a Christmas to look forward to. We did have some Christmas decorations but we made some more out of pine cones and branches, spray painting them and glitter, they look lovely and the girls are so proud of them. We also updated some old plain baubles using finger paint, not quite as good as the picture but not bad.
Our Christmas is a result of a lot of planning and work, outfits a mixture of charity shop finds and new clothes in the sales. I am going out but it is the office do and we have all saved for it and the Drs put in for the drinks, so looking forward to that. I guess this post is about enjoying where we are at, and its a good place so I guess i don’t want to talk about economy and tips but enjoy what being careful has achieved. That said plans are in place for the New Year. See you then.
Merry Christmas wherever you are…
Now in wartime people paid in weekly to saving bonds, like Premium Bonds, the money would be collected from the home, so I decided I would save for Christmas in a similar way via Park hampers which is a weekly or monthly payment. I looked into it and decided to become an agent for them, so I not only save for that most expensive time of year but I am actually earning something as well, the commission has been an great bonus. This month the vouchers came,I took my bonus in vouchers and got an additional 5% for doing so. I have shopping vouchers and a meat hamper which will come nearer Christmas. Our Christmas this year will be good. I have used Pinterest to sort out which presents I will buy and which I will make. Yep, I have jams and marmalades made when fruit was cheap and plentiful, we have lots of pick your own here so that’s how we got our fruit, My strawberry and vanilla jam is delicious if I say so myself. I’ve knitted toys, made my own Christmas cards from the ones I saved last year and for a lucky few I have homemade chocolate truffles. I have planned Christmas all year and involved the girls in the preparation and making. I limit their time on the TV and internet and instead we do things together. As we do tend to do these things mainly in the evenings, though not always, we are nearly always in our big kitchen. With us all be in one room and I have noticed my electric bill has starting to decrease as we often only have one rooms light on whereas before the whole house could be lit up.
Last Christmas was too awful to even write about. New Year we spent with my family, courtesy of dad coming to fetch us. While we were there I helped mum pack away her decorations and her loft is a place of mysteries, an Aladdin’s cave so to speak. So naturally I started to poke around in interesting looking boxes, found my great gran’s diary from WW11; it was full of tips and comments on how to manage with shortages and restrictions. As a member of the W.I ( Womens Institute). they had a host of ideas to manage the rationing and G.Grans had written them all down in her diary with some sometimes scathing comments. Very funny to read and then I had a brainwave maybe I could get some ideas and guidelines to improve my situation from her. I have given it a go and am now in a position to say I have made changes and they have helped, not all from the diary but it was a good starting point.
A W.I meeting
My first step was to try and rethink how I used my money. One of the things I noticed when I read the diary was that money was cash, not virtual. Now like most I am paid into the bank monthly and I am on almost constant overdraft by next pay day. I also rarely have cash as I use my dedit card. So I decided to bring my cash home. Now I am not daft, I actually have a very secure safe in my basement left over from one of my ex.’s schemes. I got some envelopes and marked out what each was for. My mortgage, gas and electric are paid via standing order but I put the amount on the envelopes. My phone bill, internet, shopping and extras all had their own envelope. The idea behind to this was to remind myself of what I was spending. It was so easy to just use the debit card and pretend to be budgeting. This way I only used what I allowed for myself. I also planned in a time every week to do my accounts. Now I don’t intend to make this my lifelong habit, I just want to re-educate my thinking and spending habits and this seem a good hands on way to do it. Also I have managed to reduce my overdraft and subsequently my bank charges. You have to be strict though, no popping to the ATM when you feel like it. You draw your weekly amount and that is it. Cheat and the whole exercise is a waste of time.