And most people will certainly not take the time to crunch the numbers and figure their expenses.
I do not understand this statement. It is easy to figure out a person's annual expense. Take the gross income, Take out the tax. Take out the savings. What is left is the annual expense. It is easy to calculate. As to whether people want to really know how much they spend, that is another matter.
Annual expense = gross income - tax - savings
Here is an easier method. I suspect that for most people, expenses are roughly 12 times your monthly take home pay.
My taxes are withheld, so they are not in take home pay. If I get a refund, it goes into savings, so it is not an expense. My savings are also deducted from my paycheck before I get it. Everything else goes through my checkbook. So I can get a good idea of expenses just by looking at the deposits in my latest checking statement. There are a few adjustments. About every 8 years I buy a new car, taking the money from investment earnings, which do not flow through my checkbook.
Then you will have to make changes to estimate your expenses for retirement.
Biggest change will be an increase in medical expenses.
You may plan an increase in hobby expenses, travel, and eating out.
Decreases might be commuting expenses, purchasing meals at work, professional dues, work clothes.
If your mortgage will be paid off, deduct your mortgage payment and add back in your real estate taxes.
Les vieillards aiment à donner de bons préceptes, pour se consoler de n'être plus en état de donner de mauvais exemples. |
(François, duc de La Rochefoucauld, maxim 93)