Did you figure out how much money you need to save for a comfortable retirement? That number is scary!! Mine is 2m. I need 50k a year on top of my 26k teacher pension. I figure in 2024 75k a year is a comfortable amount of money. And again I'm retiring at 60 and living to 100 (40 years retired), so 50k * 40=2m. How does a teacher save 2m dollars in 14 years? Go on a budget, save, and choose wise investments. How much do I have to save to make 2m in 14 years? 2m/14=143k a year. I don't make 143k a year, how am I expected to save 143k? This is where we need to make sure we put the little money we can save in the right place so it can grow.
Did you figure out how much money you have right now for retirement? Did you figure out how much you need to live comfortably during those retirement years? Did you figure out how much you need to save every year to make that number? That number is scary too!!
Time for a budget to see how much we can really save.
If you are on a budget, skip this part.
The best online budget resource is mint.com, but I don't use it. When I signed up it asked me for my credit card numbers and I got the willies. But if you feel comfortable, and millions do because it is rated highly, use it. Everyone I know who uses it raves about it and then tells me to get over myself. Well, I'm not at that point. If you decide to use mint.com skip the rest of this blog and go to it.
Here's what I learned about creating my own budget...you have to be realistic. The first budget I put together was so tight I couldn't do it. I am right now doing another one.
Get all your bills together. Remember this, you will not remember them all and this is where you need to practice your budget for a month or two and tweak it along the way to make sure it is realistic.
Here are the bills I thought I had:
Mortgage
heat
electricity
cable
water
cell phone
charge card #1
charge card #2
car
car insurance
gas for car
food
Where did I get this? From my online banking statement under future payments. That was easy. Nope, here's what I forgot.
delta dental
total gym
gym membership
flood insurance
car maintenance
clothing
entertainment
gifts
coffee on the way to work
banking fees
medical co-payments
time share that I bought after a bottle of champagne
time share maintenance fee
vacation
You get the drift......you will make the same mistake, which is why I say try out your budget first to make sure it is realistic. Here's what you need to do the first month while trying to figure out your budget..save 10 percent of your check. I make 1500 every two weeks. I put 150 aside....and I always spend it on something I didn't think about. I'm trying. Set yourself a date to get your budget in order. Mine is 1/1/2011. And yes, I am not listening to my own advice. I've been playing the stock market since last July, I'm still not on a realistic budget, and I don't have an emergency fund. Which I'll talk about in the next blog.
Your homework: Make a budget as realistic as you can and try to start saving 10 percent of your check. Next blog...an emergency fund. And don't think we're done with talking about the budget. We still have to discuss what we can cut back on....now that's scary!!
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