3 Rules to Build Your Budget for Retirement

0:00I've tried every kind of tracking system out there, cash envelopes, spreadsheets, apps, credit card tracking, you name it. And along the way, I not only discovered what works for me, but also the philosophies I teach my clients. Welcome to the Wealthy After 40 podcast, the show for Gen X women and couples who are ready to ditch financial stress and feel confident about retirement. I'm your host, Dalene Higgins, financial and retirement coach, helping Gen Xers master their money and create a personalized retirement plan so they can stop spinning their wheels and step boldly into their dream retirement.

0:41If you're feeling behind, don't worry. Continue listening to this podcast, as well as be sure to grab your free guide, 5 Must Do Steps to Start Retirement Planning Now at elevatefinances.us backslash must do. And remember, let's make retirement possible together. Welcome to this episode. So last episode, I talked about budgets and how they are a power tool for your retirement. If you missed that, be sure to head over there after this episode, but they have so much power. And I decided to follow up with how a budget really gave me the power on my money journey to get me to retirement, and how on that journey that I turned those philosophies into the things that I now teach my clients.

1:38First off, budgets are not one size fits all. There's not a standard way to budget. There's not standard elements. There can be, right, in general. But really, a budget, the power from a budget comes when you design one around your values, your priorities, and your vision for retirement. And I'm going to show you how that worked for me so that you can see how it can work for you. Being able to create a budget with who you are, I talk about that a lot, your values, your priorities, basically, that's what makes budgeting sustainable and also likable. Nobody really loves budgeting, except for me.

2:27I'm sorry. Yes, my prior boss called me a nerd, but he was like, that's kind of a good term. And I'm like, yes, because I do. I love numbers. And not everybody does. And I've definitely learned that on my journey. But there's some things that I didn't agree with either out there in this space. And so my goal with this episode is to share with you my journey so that you can see what kind of would happen on your journey or what should be happening on your journey. And that it really is all about who you are and what you want from your money. The goal with a budget is to create a static but flexible budget.

3:13Now when I say static, it's going to be a budget that flows month to month. We're not creating a budget for September and then a new one for October. Oh no, we don't need to do that. We need one that is going to be able to be static but supportive of every month, and then ultimately flexible enough to give you the power to make the choices you need. I believe that's what a budget is all about. We have a budget, it's laid out what is going on, what we're doing right now. And there are times when we talk about emergencies all the time. And so I think everybody understands that. But there's times in our lives especially if you're with a spouse or children, right?

4:04People, two minds coming together, basically two plus minds coming together. And you're talking about, wow, wouldn't this be exciting? Or have you thought about this? Or man, I've been thinking, and really you start going down that, I call it a rabbit hole, but really I think it's a dream pipe. Oh, that would be so nice. That would be amazing. Do you think we could do it? At that point, that's when you go to your budget. How can you make that work? How can you realign what is going on in your budget to help you get that new thought, that new idea, that new desire to happen in your life? That is with a budget.

4:52That is with a budget. Okay, so I've digressed just a little bit, but I want to share with you my budget journey. I'm not going to walk you through all the steps and all the boring stuff, but what I'm going to share with you is the things I've learned. And then from the things I've learned, how I now support clients. So 15 years before I retired, I had changed jobs and I'm like, okay, great. New agency, new place to be. Man, I was there for 17. I could do 17. I'm quickly adding. I actually have the option to retire in 13 years. Now on the sense of money, 13 years is not a lot of time. 13 years was not a lot of time compared to the 17 I had already put in.

5:41And I'm like, oh my gosh. And this is what I call my aha moment. And I'm sure we all have that crap moment. I've got to get my money together. And this was mine. And I'm like, okay, I want to create that option strongly. If I am ready to leave, if I'm ready to be done with this part of my life, I want that door to be open. And I knew at that point, I had to get my money in order. And so the first place, I got to create a budget. Yeah, I wasn't budgeting before, right? I was doing the bank account budgeting. I was doing all those things and it, yeah, I had no proof that I was going to be able to retire in 13 years.

6:22I created a budget. I had my bills on auto pay. I love auto pay because there is less decision fatigue. If you're in a sense of wanting to be free from certain choices, putting those on auto pay is one of the things you want to do. Now you got to make sure you have the money for those bills. The timing of where your money is when the bill call comes in is important as well. So my bills are on auto pay. I just and my savings, I have retirement savings, I have other savings, those monies are going out. I decide to do cash envelopes. Now if you've listened to my very beginning story, I talk about them very fondly.

7:10I absolutely loved my cash envelopes. And now reflecting back, I can see the reason why, regardless of if you use cash envelopes or not. Okay, let me share my story first. Cash envelopes I had for groceries, eating out, entertainment. We also had it for clothing, pet food, allowances for those of us in the household. There were a couple other things I can't think of. My daughter knew where the envelopes were. My husband knew where the envelopes were. It worked for us. I know there's lots of people that it doesn't work for. That's fine. That's not what I'm here to really discuss, but we had the envelopes.

7:52The reason I loved the envelopes so much was because I realized how much control I had over my discretionary funds. Now, let me quickly define discretionary funds are your groceries, your eating out, your entertainment, your spending allowance, your clothing. You have these choices to make. You have choices within the choices. That's why they become discretionary. They're not a fixed bill. They're not a, I signed up for this, I have to pay it on this date. This is a discretionary in that I can fluctuate the timing, I can fluctuate the amount, I can fluctuate, you know, different things of that.

8:35The cash envelopes helped me see and feel that control of discretionary funds. The biggest takeaway I have, I'm sure there were several, but was when my daughter came home from school and she says, I need$150 for ban tomorrow. And I'm like, really? Okay, we didn't have a note about this a week ago. The banks are closed. I says, let's go to the envelopes and see what I have. Maybe I've got enough there. I had more than enough, more than the 150. Being able to, again, flexible, right? This is part of a flexible budget. Give that to her, still meet all my discretionary needs, but see the power, fill the power, have that control.

9:21Now, I'm not control freak, but that control of that power, recognizing that. So whatever system you have for those specific expenses, those discretionary, recognizing how much control you have in the timing, in the purchasing, in the amounts, in all of those things, the more you have connection with that, the better it's going to be. For some people, that may be cash. And I know in this digital day and age, that may not seem effective, but it can be very powerful, even if you just did it for a short, short while. So I think I did cash envelopes, year and a half, two years. And then I'm like, okay, I really got my purpose from that.

10:08I moved to a tracking app. And a tracking app is not for everybody. It was following every single line in my budget. It's more reactive than proactive, but it supported me as a numbers person. I thought it worked really well. And so I did that for a while, and now I have transitioned to the current way that I teach clients. Very simple. You don't have to be numbers oriented. It still gives you the information. I know we're talking about tracking as the budget journey, but those two pieces go together. Those are two of probably five, six pieces that I help you put together in a money management system.

10:49It is important to have a budget, but have a tracking system that supports specifically where your money is going to be able to refine and realign those budget numbers. On my journey, I was really focused on two goals. So short-term and long-term. So for the short-term, we were recreating. We loved to go camping, motorbike riding, all of those things. We ended up buying a piece of recreational property, a new trailer. That was my short-term goal. We were living for the now, enjoying the now. That was our big thing. And then again, my aha moment was about saving enough for retirement. That was my long-term goal.

11:34These were my two big areas of focus. It simplified life for me, right? Money either went to retirement savings or to the short-term now of I've got to pay those off. I need to pay those off soon. I want to pay off the property. All of those choices went in there, balancing between those two, but keeping me focused. Those two areas were what I was doing. I was enjoying it. I was loving life. I wasn't swayed by comparison or others spending. It just kept me going. I knew exactly my money was either going to go here or here or a split between. And I just kept going. I just kept going. And doing it that way gave me so much satisfaction.

12:24And I was not burnt out. What I did find that as I wanted to pay off that debt quicker, for the now, to be able to have more money to put towards retirement savings in the next few years, I would look at where my money was going and I would spend time with every expense. People, I think, get caught up in, well, if I just not spend it, well, is there a different way to do it? That's like my client learned after session one. And just thinking about where you can better appropriate. It's either time or money. Do you want to spend some more time or some more money? And so being able to kind of balance that.

13:07I took up mill planning. I did bulk buying. I made my own foaming hand soap. If you've listened to that, it was, that was a dire move, that little one. But overall, all of them together added up. And I know that's where we get caught up in the only, and it's only going to net me this much, or it only costs this much. And remember, I just did an episode on that. That's going to limit you. That's going to limit you. I really spent the time in the areas of expenses where I wanted, not where others told me to. I didn't listened to the big group gurus at the time. I took into what fit best with our house, what we wanted to do, what we enjoyed, what we could give up.

13:59Once a year, I would rewrite my budget. So I'd just make a new, so I was doing my budget in Excel. I would just make a new sheet and I would just start from scratch. I didn't copy it over. And I was just like, okay, last month it said it was this. I was looking at my all of my history and creating it. This helped me to find 20 or$30 more a month for retirement savings or for debt payoff if I was still in that mode. But really, I did this once a year and I'd be like, oh, gosh, you know, I didn't realize that bill went down and I didn't realize that we weren't spending that much on groceries anymore or whatever it was.

14:38And I would be able to eke out$20 or$30 more and get that to retirement savings. Budgeting can be very powerful in the ways and knowing how to, quote, manipulate it, but manipulate it for you. Don't let it be manipulated by others. As I got closer to retirement, I created a budget for retirement. I duplicated what I had. I reduced the expenses I knew what that would reduce. I deleted those that I knew I wouldn't have. And I added in the new expenses I knew would be there. This gave me a framework to work on in heading and moving forward, having the confidence that we would be able to, quote, live off of what was expected on our retirement and being able to do those things.

15:24I still have this framework. And I use it often. It gets changed when bills are adjusted, insurance goes up or utility bills go down, whatever it is. And when we get raises, all of that happens to, again, fluctuate and support our security for additional savings. I've got to keep those savings up just in case we want to do something we desire or there is an emergency. Through my budgeting journey, the lessons I learned and now share as rules and philosophies for my clients because I found success and empowerment within them myself. Number one, I will never tell you where or how to spend. Number two, I will show you how to make money work for what you want to do.

16:18Number three, budgets are living documents. You refine them, you rework them, you realign them as your goals shift and change. Overall, learning to align your spending with values will help you create what you're ultimately trying to create through consistency and confidence. I love talking about my budgeting journey. I love budgeting. If you're curious what that would look like for you, I invite you to a Clarity Connection call. You can do that at elevatefinances.us backslash connection. We'll spend 45 minutes gaining clarity with yourself about retirement, budgeting, those things that you're dealing with right now.

17:08And as you gain more clarity, things become clear. I think you become excited, motivated, and ready to do something to make the change so that you're not feeling stuck. To recap, everything I teach my clients within my coaching containers are from the experiences that worked for me, the rules that I leaned into, the philosophies that I used, and I will share them with you and we will make them yours. We will make what works for you become powerful and you can see how budgeting can get you to retirement. Until next episode.

17:52Thank you for spending this time with me. If you're not already following the show, be sure to hit subscribe so you don't miss what's coming next. And I'd love to stay connected with you between episodes. So come join me inside my Facebook community, Retirement Ready Hub for Gen Xers. It's where we're having real conversations about money, sharing wins, working through challenges, and building a clear path toward retirement. And remember, retirement isn't just a dream, it's a plan, and you get to make it possible.