Isn’t it funny how the more we earn, the more things we view as being “essential”? When we start our working life we happily live within what we earn. Often we are content with the basics; we don’t need to splash out unnecessarily. In fact, we’re sure that even if we earnt more we wouldn’t suddenly start splurging on luxury items.
Then we get a salary increase. Since we got by comfortably on what we were already earning we’ll just be able to save all the extra right? Yet somehow that doesn’t happen and we only seem to have the same amount left at the end of each month as before. Sound familiar?
Often when it comes to planning for later life people believe they’ll be able to live on much less than they do now. “Our mortgage will be paid off”, “the kids will have left home” and “we won’t need two cars when we retire”.
The problem is people aren’t always honest with themselves about what they can suddenly live without. They underestimate what they can live on and then when it comes to retirement they realise they aren’t in a position to actually retire just yet.
When it comes to planning for the future you have to be realistic about the lifestyle you want. What do you class as essentials? What are you prepared to do without? Will you want to take the same standard of holiday each year? Will you want to be able to spoil the grandchildren at Christmas and birthdays? Will you want to eat out three times a week?
On top of that you need to consider things like long term care or end of life care if it comes to it. You’ll want to be able to keep some savings put by for those little emergencies and perhaps you’ll want a funeral plan or to leave a little something for your loved ones when you’re gone.
When you’ve considered all these things you’ll realise that maybe you can’t live on quite as little as you thought you could. Maybe you need to start putting a little more in your pension pot or putting money aside in savings.
This means you need to take a good look at your lifestyle and expenditure as it is today. Are you spending more than you should be? Could you be doing more to save for later in life? Are you wasting money on too many non-essential items?
If the answer is yes to any of these (which it probably is), then you need to make a plan. Keep track of your expenditure and make a list of areas where you could reduce costs.
If you find you waste a lot of food, start planning your meals and buying only ingredients you need. If you buy lunch out every day, try taking a packed lunch instead. If you drive to work, consider a car share, walking or public transport.
By making just a few small changes in your lifestyle now, you could make substantial savings which will benefit you in later life.
At Rockwood we can help you create a financial strategy. We’ll look at your current situation, listen to your individual needs and discuss what you want in the future. Then we’ll advise on what you can do to ensure your financial future is secure. All of our advice is completely impartial and we have your best interests at heart. Start planning now for the lifestyle you want later. Contact us today for more information.
Nothing in this blog constitutes financial advice or recommendations, for more information please contact Rockwood Financial Solutions on 0330 332 2679.