Pensions Planning: The NUMBER
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I was being a bit flippant and like others I do know how much I spend, just not on exactly what. I'm in the fortunate position of not having to watch every penny so if I've spent more that the average in a period then it doesn't matter. It doesn't make any difference to me whether I've spent more on food, clothes or whatever and knowing won't change the decisions I make. I do understand that others want to/have to know this; it's just not for me. I have spreadsheets but they work out how much I'm going to have and how little tax I can get away with paying rather than what I'm going to spend it on.If you have no idea how much you spend then how do you keep within your income. No offence but sounds like a recipe for debt to me.0 -
I'm with Shinytop on this one. Not everyone has the inclination to track everything they spend and categorise it on a spreadsheet. Fair play to those that want to but I spend enough of my working life on excel without wanting to do so willingly outwith that.DairyQueen wrote: »If you have no idea how much you spend then how do you keep within your income. No offence but sounds like a recipe for debt to me.
We know what currently comes in at the start of month. We know what's there at the end of it (if any). We know what we will get from our pensions and at what stages. We know what bills we will bin and what new ones we will take on. We know what things we would like to do in retirement and roughly how much they cost. We know how much of a buffer we would need to help us sleep at night. These are all big lumps of numbers and not micro-managed pieces of data.
Back of a fag packet economics maybe but I'm pretty sure it's not going to lead to a road to debt. We have no clue what surprises both good and bad are round the corner for any of us so fussing over a spreadsheet for years prior to retirement is more than likely going to give the same results as a rough bit of simple but sensible arithmetic.0 -
I'm also one for dealing in "gross" numbers rather than drilling down into fine detail.0
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DairyQueen wrote: »If you have no idea how much you spend then how do you keep within your income. No offence but sounds like a recipe for debt to me.
It sounds like the best way to do things to me. It is possible to achieve the same results as someone who makes detailled budgets with much less effort.
Of course you can restrict your spending by budgetting and keep it under your income so that you accumulate wealth. But if you develop the habit of only spending what you have available and allocate money for savings first you get the same result for virtually no effort.
In my first year at university there was no ATM in town. I would withdraw £20 in cash at the start of the week, Some weekend s I would run low but I could not get any more out so I would just make do with what I had. In my second uear an ATM had been installed byt I kept the same habot (except that bank holiday mondays were less of a problem)..
I had a simple budget of how much I could afford to spend a week beyond costs like my rent and course books. Taking out cash once a week and then just spending that forced me to stick to it. I did a similar budget when I started working, but I didn't redo it when my pay increased. I did increse the ammount I withdrew but only when I was finding myself short and was sure I could afford it.
Since I was spending less than I earned money accumulated. Some I spent to treat myself such as a nuce (but cheap) holiday. Some went on cars, but nothing flashy. I started paying into pensions. Then I spent all my savings on a deposit for a flat. and the mortgage started taking a chunk.I moved a couple more times, each time wiping out my none pension savings. Then I settled dow for 18 years and my savings started to really build up.
Xurrently the only budgetting I do is to check my main bank account towards the end of each month to make sure there is enough to cover my creadit card bills. Uf not I transfer some in. Also I use an old account to put money aside to pay my tax.0 -
I've never had a budget as such. I know as long as I don't spend more than 150.00 per week on food incl dog food, toiletries, going out, discretionary stuff then I'm ok. Being old school, I draw that in cash once a week.
As for spreadsheets, wouldn't know how to do one. I know my pension will be circa 400 k by the end of the year. I know that minimum I will have 250k in the bank, but more likely to be 400+k. It all broadly brings it to what I live on now, 25k pa. I've future proofed the house over the last few years, mortgage has <20k to pay off.
I'm definitely of the jump and it will happen mindset.
PS that translates to my business as well. I'm rubbish at maths and would probably would fail the financial side of the CPC to run a haulage business, but someone told me a long time ago, fuel + wages should be 50% of your costs and it worked. Definitely a folllower of the KISS orinciple:rotfl:
I take it you do own a dog0 -
I am planning to take early retirement at 60 on 8 March this year so less than 6 weeks left to work.
I will be getting my DB works pension, which going off last year's forecast will give me approx £1,070 a month (£12,840 a year) after taking the maximum lump sum of approx £85k (this includes approx £48k AVC's I started in 2014). This will increase slightly due to pay increase this month.
I don't bother with spreadsheets, but due to paying approx £1k a month in AVC's for past few years my take home pay has between £850-£950 a month and I have not struggled, in fact I have saved quite a bit during that time, so I am sure I will be fine with my monthly pension amount.
It is only me, no mortgage or debt and have very small monthly outgoings as regularly reassess these and have approx £90k in savings.
I have started a list of things I want to do on retirement, with work on the house at the top of the list and some holidays, but I am confident I will manage fine moneywise.Decluttter 2022⭐Declutter 20230 -
The "saved as much as I reasonably could" part may be the clue. Consider my decade plus with a savings ratio above 60%. I didn't and don't use a budget or very closely track spending because I don't need to. Of course I've been broadly non-extravagant and do pay attention to substantial exceptions to my base spending.
If finances were tighter or I was inclined to engage in shopping as a pleasurable activity or buy and change cars or computers frequently the approach I use just wouldn't work and spending budgeting beyond core needs would be required.
60%- pah, I put 450% of my pre tax income into pensions and only work 3.5 days a week.I think....0
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