Friday, October 9, 2009

So what is next....

Now that we figured out a way to pay off our mortgage early we need to start planning for retirement in other ways.  What about our expenses?  In order to retire at the earliest time we can we have to watch the only two things that we can impact -  savings and expenses.  We have made the necessary adjustment to increase our savings in both the tax-deferred and taxable areas.  So now we need to get a grip on our expenses.

The best way to do this for us was to set up a spreadsheet in excel that allowed us to track in detail what our expense were currently.  So I went back in time and pulled all of our financial records together and recreated our expenses for the last 16 months.  Since we have never really budgeted but always watched out for our money's best interest this provided us with a snapshot of what we were really spending.

Our two biggest expense categories were our travels (we love to travel) and department stores!  Department stores????  Now that had me scratching my head... it appears that my DW loves to shop more than I had originally thought.  We sat down and discussed this new information and decided that we should not change our spending habits at all at first.  But we should at the very least start asking the question - "Will I really need this in my retired life?  This has resulted in us not buying any big ticket clothing and other w*rk related items that we won't need after two years and thus, don't really need now.  We will see what this does to our expense over the next 4-5 months. My guess is they will drop some.

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