DO YOU KNOW WHERE YOUR MONEY WENT?? Since you have to get your tax records together anyway, this is the perfect time of the year to take a look at how you're spending your money.
You may have several sources of income from your salary, a pension, dividends, interest, maybe even rental income. It's pretty easy to determine your sources of income, but do you really have any idea where it goes -- other than maybe your house or car payment.
An easy way to get a handle on what you spent in 2008 is to begin with your checkbook and make a handwritten spreadsheet of what you bought by check. Or you might want to use a computerized program like Quicken http://quicken.intuit.com/
For charges, like Master Card, American Express, etc., look at the actual statements to determine the categories of expense. Some of the credit card companies actually give you a breakout at year end either with the final statement or by going to their website.
You might be reading this and thinking "what a waste of time".
BUT, how do you know where you might be able to cut back and save money, if you don't know where your $$$$ went. You really need to determine your minimum financial monthly outlay way before you retire just to make sure that you can afford the lifestyle you currently have. Frankly, I've not met anyone who gets 100% of their salary in retirement and I live in a retirement community!
So, most of us Boomers have to either cut back some in retirement or get a part-time job!
If you don't know where to start with making a budget, I found some good info and free worksheets at: http://www.betterbudgeting.com/budgetformsfree.htm
Here's a quick calculator that will give you an idea of whether your expenses will go up or down in retirement
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