It is important to have fun and celebrate along the way. There is no point saving everything for the future and not living now. But there is a balance. We regularly remind our clients to celebrate milestones – repaying the mortgages, getting to a particular value of investments. On the other hand, you do need to have that discipline to make sure that you are putting away money to achieve those goals.
While it would be easier if we all just won lotto or got a big inheritance, the reality is that the majority of people achieve their goals and have a good retirement because of good old hard work, regularly saving.
And it does work.
Putting money into KiwiSaver means that you don’t really notice that you aren’t getting it the bank. Every year when we meet with people we work with them to gradually increase how much they are saving to achieve their goals. It might only be an extra $50.00 a month. But when they look at the retirement savings analysis every few years, they can see the difference that it makes.
As you get closer to retirement, this is the time that you need to be more aware of how much you are spending, and whether that lifestyle is sustainable in retirement. Where possible, upgrade the vehicles and whiteware, do those touch up’s to the home if you are going to stay there for a long time – but do them out of cashflow.
It is harder when you aren’t going out and earning money to live off, so this is when you really need to be aware of your spending and make some decisions, to make sure that your investments will sustain you through retirement.