November was Re-Direct Your Finances Month: Here’s What I Did


I hope you used the tips and the posts from this month to re-invent your relationship with money. It’s a sure way to realize the future you created for yourself faster.

Since my LIFE LAYOUT is mostly about retiring in a couple of years, I really needed to get serious about money.

Here’s what I did:

  1. I began by calculating how much money I would need monthly to be able to live in retirement and cover financial risks.  I realized I needed additional information so I contacted my benefits department to learn:
  • The exact amount and start date of my future monthly pension
  • An estimate of my 401(k) plan total at my planned retirement date
  • Transferability of my medical, dental, and vision, and life insurance

2.  The news?  My monthly pension and 401(k) were both higher than I realized.  Fantastic!

While my health and life insurance weren’t transferable, I would have Cobra to fall back on (if I can’t get less expensive health insurance) until Medicare kicks in.  And I will leave my employment insurable for both health and life.  My benefits representative helped me estimate these costs.  So I factored all of this into my budget.

3.  I budgeted for $100,000 of life insurance to cover burial costs and a small legacy for each of the kids.  Just enough for a first house down payment, extra schooling, or to start a new business.

4.  I added in the cost of a good long term care insurance policy to cover retrofitting a home, assisted living, at home care, or a nursing home.  If I become infirmed, I don’t want my kids to suffer financially or have to make difficult decisions based on money.

5.  I reviewed my annual Social Security statement to calculate my monthly income at various ages.

6.  When it was all said and done, I could enter retirement debt-free, pay for the move, and maintain a modest nest egg.  But, because I’m insistent that I want to cover all financial and health risks and maintain my current discretionary spending habits, I’m $800 short of what I need monthly for a couple of years.  Airplane tickets to visit the children and grandchildren and books I’m not really willing to cut back on!

I can easily cover this shortfall, without touching the nest egg, with my writing, book sales, and my marketing and job search business.

7.  To test out my calculations, I began living on my retirement budget as of my mid-November paycheck.  The rest I’m plowing into the 401 (k) plan.  My employer has a very generous match and I’m fully vested now.  I can always cut back on my contribution if I absolutely have to.  But because my contribution is not taxable, I increased my income tax withholding allowances.  This softened the blow to the net paycheck somewhat.

It’s amazing how focused I’ve become, especially about the “nickel and dime” spending!  Here’s the test I use:  Am I willing to pay to move this?  Am I willing to compromise my retirement strategy for this?

  • I’m cleaning out all of my books – you know how heavy those are to move- and selling unwanted books at the book store.  Pin money for sure, but I cover a sack or two of groceries with each trip.
  • I sold my treadmill which is, of course, like brand new, too heavy to move, and the walk from my apartment to the fitness room is, after all, more exercise.
  • I’m not renewing any magazines.
  • I sold the extra TV, which brought in a little cash, but saved $50 on the monthly cable bill.
  • I experiment with a generic or store brand item every shopping trip.  I previously have been “brand loyal” no matter the cost.  it’s been a real eye-opener for me how less costly items can be very satisfactory.
  • But here’s the most fun and powerful budget move I made, totally inspired by Nadia’s rule to “buy everything you would typically buy anyway at the lowest price”:

I made a spreadsheet of everything I routinely buy:  groceries, cosmetics, pet, and household, by brand name.  Yes, it took a while!  But I already had an Excel spreadsheet grocery list with little boxes to check that I use to create my shopping list.  So that helped.

The list of items went down the left hand column of the spreadsheet.

Then, across the top, I titled each column for a store at which I typically shop:  Target, CVS Pharmacy, Walgreens, Petsmart, HEB Plus. I could have added Walmart, but it’s a little further than the others and I rarely shop there.  These are my “go-to” stores. I rarely veer.

I printed out the list, clipped it to a clipboard, and stashed it in the car.

Over the last few weeks, as I’ve shopped, I’ve been jotting down the prices of my items at each of the stores.  Not the sale prices, the regular prices.   Someone more ambitious might do a field trip and knock it out in one day.  That is not me.

So I’m about a third of the way in completely listing and comparing the routine cost of each of my routinely purchased items.  But my master grocery list is already expanded and continually updated by store.  When I’m in Walgreen’s, I pick up certain items.  In Target, others.  And, of course, I buy my $50 of sale items I typically purchase.  So I’m always buying low.

I’m not obsessive about it but frankly, before now, I bought strictly on convenience.  I couldn’t have told you the cost of anything I purchased routinely if my life depended on it.  I’m already seeing a difference in my budget.  And it’s kind of fun.  It’s a challenge I’m freely embracing to meet my goal.

Me, thrifty.  Somewhere my kids are laughing…

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