Living Cheaper, Living Better: setting early goals for your retirement lifestyle

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Advising on an early plan for retirement spending may sound somewhat off-putting to people who prefer to spend with abandon while they are young and earning money. Even older generations may baulk at being told it’s time to pull in the reigns. And it’s perfectly understandable that you don’t want to worry about old age and retirement when you’re at the peak of your career and building a life.

But the key to planning and sustaining a comfortable life in your later years begins when you are young – and it needn’t be a burden. Even if your company has a good pension fund, and even if you have bolstered this with a private plan, and a couple of useful policies as extra savings vehicles – you still need to be sure that you manage your money with a retirement future in mind.

The early budget catches the worm

  • We’re all bored by the word ‘budget’ – but the thing is, it doesn’t have to be onerous. Nor do you have to forgo things you enjoy. You can live more frugally without stress. You just need to be pragmatic and steady, and remain focused. Can you go off the rails now and then? Sure. But whatever you are planning in your life and lifestyle, all you have to do is keep an eye on a couple of sensible points, and then keep doing whatever you like.
  • Truth is, we can get used to living slightly smaller; we can scale down in a way that doesn’t mean sacrifice, but simple mindfulness. This involves knowing not only where to cut costs, but also how to do so. Frugal budgeting is not haphazard. It is a thoughtful, documented, repeatable monthly budget that becomes over time, a way of life. Everything beyond what you need to spend, you can save – and from that amount budget how you will spend on extras. But protect your future first, not last. Be frugal, be cost-conscious, but don’t lose out on life.

Target your choice of home first
How will you want to live in retirement? And how can you choose a lifestyle now that will help to acquire the desired home in later years? If you know what you would prefer, then you already have a basis for your plan. An apartment or a cottage? By the sea or further inland? A warmer country perhaps? Your strategies begin now when you make those options real dreams.

Pay off your bond
Your biggest asset is your property – and therefore will provide a large part of your retirement funding. Pay it off as early as you can. Then you will be freed up to reorganise your finances to your advantage. Security of tenure is the one important way you can organise your finances and build wealth.

Downsize earlier rather than later
This is not always an easy decision – but it’s surprising how many people hang on in expensive big houses simply for the sake of sentiment. Downsizing as early as you can once your family flee the nest, is probably one of the best decisions you can make for savings for your retirement. Smaller homes are less expensive to buy and maintain, and lower on taxes. What you make on selling your larger house, you can immediately invest for the future, not to mention selling furniture and belongings no longer required.

Cutting down on the grocery bill
This doesn’t mean you have to begin a starvation diet – far from it. There’s a healthy aspect to keeping your grocery bill at reasonable levels. Eat more often at home. But then, don’t think you need the most expensive food at home. Research cheaper options at the supermarket, but don’t sacrifice quality for price. If you shop with focus instead of impulse, you can find good nutritious offerings at many stores, none of which will break the bank. Once you start shopping like this, it will stand you in good stead when you reach your retirement years.

Staying healthy will save you money now, and in the longer term
If you keep yourself fit and healthy, you’ll be saving yourself a lot of trips to the doctor, as well as medication and hospital visits. Keep up to date on vaccinations and flu shots. Get fit and stay fit by walking on a regular basis. Walking is free and an excellent way to stay fit – and is really something you can start younger, and keep going until older. Take advantage of free preventative services that may be included in your medical plan, like breast or colon cancer screenings. Have periodic check-ups with your GP.

Be a frugal fashion fundi
Buy clothes that are now on sale, and cash in on discounts – because the price is going to rise year on year. Buy classic and your clothes won’t date. Keep a special place in your wardrobe or in a suitcase to preserve purchases for future wear. The time will come in later years when you will have a fairly new wardrobe with little outlay.

Heed the advice of a financial advisors
Financial advisors will ensure you’re on track to meet your long-term financial goals. And it’s never too late to take advice. But the earlier you begin to consult a professional, the better off you will be. There are always tricks and tips that only he or she will know. Arm yourself with knowledge and your retirement will be that much easier when the time comes.

Being frugal is not meant to be a punishment. Enjoy your lifestyle, but learn how to stay comfortable for less. Soak up as many tips as possible – all will make the task of preparing for that distant day of retirement that much easier.

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