10 Tips for Current Retirees – Tip 5- Track Monthly Spending

Wealth Advisor

In this video, Jamison Smith, wealth advisor at EWA, advises retirees and those approaching retirement to track their monthly spending. He emphasizes the importance of having a general idea of fixed and variable expenses but cautions against becoming overly obsessed with detailed tracking. The goal is to ensure you have a sense of your monthly financial needs, allowing you to enjoy your retirement without overspending or underspending. Consulting with a financial advisor can help strike the right balance in your retirement spending.

Video Transcript

Hi, I’m Jamison Smith, a wealth advisor here at EWA. And this is a continuation of our series which is Ten tips for retirees or anybody that is getting ready to enter retirement within the next couple of years.

So this tip is to make sure that you keep track of your monthly spending so that you know around of estimate of how much you’re spending on a monthly basis, but don’t over obsess over it. We find that a lot of people will become what we call Excel rich, meaning they track every single dollar they’ve ever spent on an Excel sheet.

It’s the biggest waste of time in our opinion. Really we just want to make sure that you have a temperature gauge on how much needs to go out on a monthly basis. And that broken down between fixed expenses and variable expenses.

And what we mean by that is we call it paychecks and paychecks. So when you’re in retirement, you have your paychecks that need to come in no matter what that’s going to pay. Things like your mortgage, if you still have one, your car payment, things that no matter what, need paid.

And then your paychecks would be things like going on vacation or any hobbies that you’re doing because you want to, but it’s not a necessity to pay your bills and live your life and that way that can easily be adjusted based on any circumstance.

You would have to taper back what you’re spending, you could make sure that the fixed expenses are there and you’re maybe adjusting how much you’re traveling, for example, once you’re in retirement. But what we’ve found is a lot of the best savers are the worst spenders in retirement.

So a lot of times it’s a mindset shift of I’ve accumulated, I’ve done a really good job of saving my whole working career. Now I’m retired. Now we have to actually train our retired clients to spend money.

But point of this tip is really just to have a high level overview and grasp on how much you’re spending. And then if you’re working with an advisor that’s doing a good job, they will be able to tell.

Barriers of how much you could spend and make sure that you’re not overspending or underspending. Because in our opinion, that’s the biggest failure is if you get to retirement and you don’t spend enough money and don’t enjoy any of the wealth that you’ve accumulated.

So if you have any questions on your specific retirement situation, feel free to reach out.

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10 Tips for Current Retirees

10 Tips for Current Retirees - Tip 1- Have a Team of Trusted Advisors
10 Tips for Current Retirees - Tip 2- Recognize Your Investor Bias
10 Tips for Current Retirees - Tip 3- Be Aware of Annuities
10 Tips for Current Retirees - Tip 4- Have a Game Plan for Long Term Care
10 Tips for Current Retirees - Tip 6- Don't Base Investment Allocation on Your Age
10 Tips for Current Retirees - Tip 7- Consider How You Will Spend Your Time
10 Tips for Current Retirees - Tip 8- Have a 7 Year Spending Back Up
10 Tips for Current Retirees - Tip 9- Have a Game Plan Around Social Security
10 Tips for Current Retirees - Tip 10- Plan Your Travel

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