Budgeting after retirement is a lot like budgeting during your working years. The best practices involve taking careful stock of the money you have coming in and going out, and being financially prepared for emergencies.
First, make a list of all your expenses. Be sure to include the bills you receive every month, insurance, taxes, payments for housing or transportation, medicine and other healthcare costs, and food. List everything you pay for, how often, and the amount you pay. Use your bank statements if you have to. The more thorough you are, the more it will pay off.
Divide your expenses into separate budget lists. You may find it useful to combine some of your expenses, such as food and personal care items, so you have a better idea of how much you’re spending and where. Since emergencies happen when you least expect them, you’ll want to add another budget list for emergencies. Also, create a budget for savings. You can separate your savings into two groups: savings you don’t touch, and savings you set aside for special occasions or for a trip.
Then, consider the money coming in. This might include your work earnings, social security benefits, or any other payments you receive.
Divide your monthly income into different budget lists. Start with the budgets that are necessities, such as food, medicine, and insurance. Then, take what you have left over and divide it into your emergency and savings budgets. The amounts you put into these columns are up to you. It’s a good idea to divvy up these amounts by percentages, especially if your income differs from month to month.
Some aspects of handling your finances are a little different from what you might have done during your younger years. However, once you have a reliable system in place with the best practices for budgeting, you can spend less time worrying about your finances and more time enjoying life.
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