Here is a Household spending plan to save for retirement! Part 1
Step 1 – Set Your Retirement Savings Goal
If you’re still in your 20s, consider setting a savings goal of 10% of your income. If you’re in your 30s or beyond and don’t have a lot saved for retirement, think about how you can get to 15% or more.
This may seem a little intimidating, given all the categories of expenses that are competing for your paycheck. If so, rather than setting a final percentage goal (10% or 15%), make a commitment to increase your savings rate by 1% a year until you get to your final target.
Step 2 – Establish Your Spending Categories
Make a numbered list of your entire household spending categories. Lump things together as appropriate. For example, your heating bill, your power bill and your water bill can be combined under the category “Utilities.”
Step 3 – Make Some Super-Rough Spending Guesses
Spend no more than 10 minutes going through your list and making some super rough guesses on how much you spend in each category. Do not get out any old bills, credit card statements or a calculator at this point. Put the spending categories into three buckets – big expenses, medium expenses and small expenses. The purpose of these guesses is simply to group expenses into the categories, not to understand where every dollar is going.
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