Honestly, I do not know but I do it anyway. Why? Because of the too many articles that I have been reading about what happens during retirement when health expenses rise exponentially and income is almost negligent. There are too many ‘what-ifs’ that are driving me to save money for my future. Following are 3 examples from people I know and their money saving model.
- Save, save, save:
- Saves 70% of the paycheck
- I don’t have binge shopping sprees. Almost all purchases are well planned.
- I indulge myself with Lunch\dinners outside at least twice a week and Starbucks- maybe twice a month as so on.
- For any purchase over 100$, I sit with the decision for a day before I buy it.
- I am not cheap but I do not spend on unnecessary stuff.
- Summary: I am on track for retirement. I wish to retire by the time I hit 35 or 40. I do not wish to work for all the good years of my life. I have a huge bucket list that I must get started on soon.
- Save first, spend later: Saves 40% of his paycheck
- This is my husband’s style of saving. He puts away a part of his paycheck into savings as soon as he gets it.
- He makes it a point to spend the rest of it even if it involves things that are marginally in the ‘I may want this’ list.
- Thanks to this, we indulge in a lot of trips and travels.
- Summary: He is on track for retirement as any other human being. He is happy today, he will be happy later. His wants are modest and he has no early retirement plans.
- Why save? Future shall take care of itself. Saves 0% of his paycheck.
- This is a friend’s style of money management. Every time he had a salary hike, his lifestyle had a corresponding upgrade.
- He always has the latest gadgets, fancy cars, expensive hobbies.
- He also has the finest Steaks and lamb shanks for lunch\dinner every day.
- He leads a credit based lifestyle.
- Summary: He has no plans to start saving for future. He believes that no one knows what the future holds and he is happy to live in the present.
Each of us believes that our money management skills are better than the skills possessed by the other two. All of us are happy with our lifestyles and maybe at the end of the day, that is all that matters. Being content in our own money managing skills and not having to worry about the future.