“Some old-fashioned things like fresh air and sunshine are hard to beat. In our mad rush for progress and modern improvements let's be sure we take along with us all the old-fashioned things worth while.” Laura Ingalls Wilder

Friday, January 04, 2013

Easing Into Retirement

We're back to the 'grind' of a budget.  This year it's with new purpose.  The Mr. is planning on retiring at the end of December, 2013, and we need to adjust our spending.  Last year we paid off the last of our debt; the biggest being our mortgage.   Now we must squeeze back into the habit of setting aside a portion of future known bills that will be due over the next 12 months.  To do this we have made a list of known expenses:  life/home/auto insurance, property/estimated income taxes, etc.  These bills are either paid quarterly, semi-annually and/or annually. This year's coming due date was noted, along with how much the payment will be ... divided by how many months until it's due.  That amount will be set aside (noted in our checking account) and when the time comes for it to be paid, we will have the full amount waiting to have a check written.  'Setting aside' money in the checking account takes much will power not to spend on other things .. such as emergencies.    We have a separate fund just for such unexpected occurrences.  Paying for items such as groceries, clothes, office supplies, etc. is done with cash accumulated each month in envelopes. Spending with cash 'hurts' more (mentally) than whipping out a debit or credit card.  Parting with greenbacks is tangible/concrete/painful in a way.  It takes a written budget showing INCOME minus EXPENSES with a NET BALANCE of ZERO .. and is known as spending your month's income on paper (assigning a name to each dollar), and takes both of us working together, going over each month's budget and bills to keep on target.  We make sure to allow a little 'free' money to do with as we please each month so we don't feel dread about living on a budget.  

Our goal over the next several months is to get caught up with our future bill reserve so we can then budget and 'practice' living on our predicted retirement income and banking any extra.  This endeavor has become almost exciting as we whittle out unneeded expenses and return to thrifty buying practices (thrift stores, garage sales, used items) consciously making an effort to watch EVERY penny. 

Happy New Year from our home to yours.

Sound financial advice for getting out and staying out of debt.


Diane said...

I guess I have been 'whittling down' for so long and living within a budget that it doesn't even seem like a chore to me anymore. Actually, I love it when my budget has 'excess' at the end of the month! I didn't plan for the excess, but I was careful with my money and it's a nice surprise when it happens. I am debt-free other than my mortgage, which will very soon be gone. I was thinking the other day that, when that mortgage is paid, I can start some 'real' savings to begin some upgrades on my house. Now that is exciting! I know you guys are going to excel at this budget thing! It surely has it's rewards!

Sandy said...

Mrs. Mac,

Congratulations on getting closer to the big day.

I love Financial Peace University, Dave Ramsey tells it like it is!!!!

Great sound advice :-)

Felisol - Elise Ljung said...

I admire the way you make plans and see them through.
With a general's strategic skills.
I read and I get inspired.
January is just the month to do so.
We pay one month's salary just for insurances.

Ruth Trowbridge said...

Mrs. Mac, just got your message on my blog - my prayers for 2013 to be the best year ever for you two, all the practice, all your commitment will pay off, so sorry for your loss it is a good thing you know heaven is real, my heart joins your for a better world for all, peace

Corner Gardener Sue said...

We had our house paid off until borrowing money to remodel our kitchen. I made larger payments than required, and got it paid off in July. Since then, I have been throwing the same amount into savings, which was very small at the time. I've never been able to get my husband to budget, although we did use the envelope system when we were first married. He has always been a spender, and I remember giving him twice or more as much money in his personal spending envelop as I did myself, and he spent every bit of it.

Anyway, my new concern is trying to figure out how much we need to have for when we get older and have a lot of medical bills, or even need assisted living. I am hoping to retire this summer, or else work fewer hours in order to keep my health insurance.

Have fun getting your ducks in a row! It can be an adventure.

OurSearsKitHome said...

Great post. Wise and bottom line.