Many people dream of retirement while others view the idea with dread. The difference usually hinges upon the individual’s feelings of future financial security. Despite tough times and widespread economic uncertainty, there are still plenty of things that can be done right now to foster financial comfort in later years.
According to Suze Orman in Ask Suze … about Planning for Your Future, "...you can find the money to secure your future from what you have." While this may be easier for some than others, it is possible for anyone in any situation to better their financial circumstances through diligence and wise decision making. Begin today to follow these key steps toward a financially secure retirement.
Manage Finances Now for Future Security
Planning a financially secure future requires an accurate assessment of the current situation. The first step in preparing for retirement is to realistically evaluate the current financial situation. Write down all monthly and annual expenses, both mandatory and discretionary. Be sure to include meals out, small daily expenditures such as coffee and any incidental purchases such a magazines or newspapers.
Consider each expense individually to see which ones can be reduced or eliminated altogether. The idea is to immediately cut back on expenses as much as possible and put the extra money toward eliminating debt or toward saving or investing for the future. View this as what it is – an opportunity to secure the future. Adopt a positive attitude and do not allow even the slightest feeling of deprivation.
Minimize Expenses and Responsibilities Prior to Retiring
Another key to future economic security lies in minimizing expenses and financial responsibilities. True security does not stem from having the most but from needing the least. Evaluate in which areas a do-it-yourself approach is feasible and develop the necessary self-sufficiency skills. For instance, learn to do simple car or home maintenance and repairs.
Especially when it comes to large ticket items, properly maintain and repair current possessions instead of replacing them. When contemplating any purchase, first consider potential maintenance costs. From haircuts to home improvements, select the option that will be least costly over time. In choosing a hairstyle, for instance, a wash and wear cut is much less expensive to maintain than one that requires a variety of styling products and frequent trimming.
Reduce financial responsibilities as much as possible. When contemplating pet ownership, consider the long-term costs involved and decide which type of pet is best. For instance, a cat is usually less expensive to keep than a dog. Also, make it clear to adult children that they are responsible to support themselves. Provide help only under extraordinary circumstances and when doing so does not jeopardize personal financial security in the future.
Embrace Frugal Living to Prepare for Retirement
Start now to prepare for retirement by becoming an expert on frugality. View the quest for frugality as an adventure. Make a game of finding the least expensive alternatives possible. Generic products can often replace name brands without sacrificing quality. Try all available options and choose the least expensive alternative that adequately meets the need.
Cultivate friendships with like-minded people. Share knowledge and trade services, when possible. Consider co-ownership of infrequently used items like a carpet steam cleaner or power tools. Check local freecycle sites or Craigslist for no-cost or low-cost items. Be sure to promote frugality and help others by passing along unneeded items in good condition, as well.
Develop interests and hobbies that are free or low cost. Advances in technology have made some previously cost-prohibitive activities affordable. For instance, the easy availability of digital cameras has eliminated the expense of film and developing, making photography a pastime that can be enjoyed by anyone. Rather than pursuing expensive hobbies, consider activities that require little investment or that can be enjoyed for free.
Develop Multiple Sources of Income for a Comfortable Retirement
To maximize the probability of a comfortable retirement, it is advantageous to have more than one source of income. Relying on a single income source can be disastrous, for instance, should the value of an investment portfolio decline significantly. Work toward creating multiple income streams as a hedge against uncertainty.
To develop multiple sources of revenue, think creatively. Consider whether existing hobbies or skills can be used to generate an income. Capitalize on knowledge gained through education or employment. Research whether a home-based business is feasible. Look into various ways to earn residual income through online writing opportunities such as that provided by Suite101. The idea is to have several small income sources that are independent of one another.
Create a Retirement Back-up Plan
Any prudent plan for retirement security includes a back-up plan. Brainstorm the what-ifs in life and develop a plan to cope. Analyze what options or resources would be available in case of an emergency. Consider whether private disability or long-term care insurance is desirable and cost effective. Be as realistic as possible when evaluating potential future needs and look toward the golden years with optimism and anticipation.
Crystal Marie - Crystal Marie is a wilderness-dwelling granny, quilter and freelance writer. In addition to enjoying the grandkids, she creates custom ...
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