3 MONEY BASICS. Most of what is written elsewhere about retirement attends to FINANCE, and financing retirement, whileKNOWING MY RETIREMENT does not offer macro-financial direction. However, day-to-day money management must be part of retirement life, for social and emotional wellbeing.
Here are 3 core money managing basics for retirement.
1. First Principle: Partners should each have some money which they can spend as they want, without having to account for it, not to anyone; fritter it away, or save it up for a bigger purchase, no questions asked.
Robert Frost observed:
Never ask of money spent
Where the spender thinks it went.
Nobody was ever meant
To remember or invernt
What he did with every cent.
Mark Twain is supposed to have said, “The LACK of money, is the root of all evil.” Everyone needs some mad money; this is a principle of social-interpersonal health.
2. Second Principle: Have a budget and work it. My father, the economist, wisely observed, “Happiness is spending 95 % of your income, misery is spending 105% of your income, and it doesn’t matter what your income is.”
Outside “individual mad money” (which is a budget category)–and in some opposition to the First Principle–we need to know how much money we have, where we want it to go, and where it is going.
More will appear on KNOWING MY RETIREMENT about budgeting but for a good introduction to sound budgeting concepts we recommend an excellent website GETTING FINANCES DONE. Click on the link to the right.
3. Third Principle: Understand Money. Money is a means, a tool, an enabler. It is not a GOAL, nor a PURPOSE, nor a VOCATION.
It is well to identify goals, purposes, and vocations and to work and live in a way that can be guided by these. Then life is enriched and full of meaning. Money can help along the way, but it provides no satisfying direction. Keep the importance of money in perspective.