How much income do you require?
Recent research has shown that Australian’s are spending approximately $70,000 a year on everyday expenses (or for those who like to work on pay cycles – this equates to $2,450 per fortnight).
Cutting back on daily “discretionary” costs can save thousands. For example, cutting back on your daily latte can save $4 per day or $1,460 per annum. To make this thought even scarier – over your working life (say 47 years) – your daily latte will have cost you $68,620!..(and this is without taking into consideration the cost of inflation.
Australian families on average spend:
$44 on clothes, $32 on lunches, $31 on takeaway food, $13 on cigarettes, $12 on lollies/chocolate and $11 on haircuts per week – which could all be described as “discretionary” spending. It may be time to see how much your “discretionary” account is costing you and your families budget .
Once the kids are off your hands
Once we retire, our money starts going to different things. We don’t have to spend money on car parking/ petrol and expensive lunches anymore, but there will be other increased costs such as travel and also rising costs of utilities.
Research by the Association of Superannuation Funds of Australia (ASFA) have shown for a couple to lead a comfortable lifestyle, they will require $55,213per annum. To live a modest lifestyle approximately $31,760 per annum will be required. The difference in living a “comfortable” lifestyle versus a “modest” lifestyle can be found in their extracurricular activities; Retirees living on $55,213 per annum will be spending $288 per week on activities such as holidays and hobbies whilst people on a modest lifestyle will only be spending $70 per week as seen in Table 1 below:
To see if you are on track for retirement please contact us for a free no obligation consultation.
By Jessica Hall, Financial Planner