Lately, I have been having conversations with people who are thinking about retirement or are close to retirement. Many from the age of 40 upwards. It’s the season of life when you have to become a lot more intentional. You have experienced life’s ups and downs and have enough material for reflection. If you recall, there is a time those in public service were made to do a lifestyle audit. The audit revealed whether their personal lifestyles and declared incomes were speaking the same language. For many, they were not. Things show up in lifestyle audits no matter how much we want to hide them.
At this point in life, budgeting or analyzing where you spend your money is not an issue. Many have done budgets and have a pretty good grasp of where their money goes. The lifestyle audit is not just about where you spend your money. It is figuring out whether your ‘spending’ and ‘life intentions’ speak the same language. Are you happy to retain things as is, challenge them, or change them? That’s lifestyle auditing! At your age, you are going into a new season of life and you don’t need to carry everything with you.
It starts with the day to day stuff. The bills to survive e.g. rent, transport, food etc. You will still need to eat when you retire. Even your food bill reveal something. For some people, the amount that they are spending on food (even for those who no longer have children) indicates there’s a lot of wastage. Or, somebody in your house other than yourself is benefitting from seven solid meals a day at your expense. Some of you value having a well-stocked store. You think it is weird if the store is half full. Maybe we just grew up seeing that and believe that is what a store should look like.
Other people shop with a ‘just in case’ scenario in mind. “Just in case they have guests”. You spend money in advance for people who may or may never come and visit. The same way we stay in large houses that have a spare guest room for the 3 days in a year that someone may visit. The places we live are usually still a huge expense for many. You still want to live two hours from the City even when you no longer need to be going to the city daily. It reveals people’s addiction to neighbourhoods.
You could collect rental income from your home and save money. You also don’t need that fuel guzzler anymore unless you have decided that out of town trips are now going to be what you do.
Then there is the other stuff. Entertainment expenses like going out for drinks, meals, club bills, holidays seem to prevail. People tend to hide a lot of habits here. Behind all this is people and time. The change would only happen if you want to spend less time with certain people and more time doing something else. Retirement does not mean you stay at home and do nothing until your friends call you for golf or a drink in the evening. It may just mean you will work differently but you still have a lot to contribute. Many people in my conversations realised they spend time and money with people because they were expected to. For example, certain Chamas because that is simply what they have been doing for the last ten years.
I have learnt that when you are transitioning, you have to consciously let go otherwise it is very hard to evolve and re-invent yourself. The familiar is comfortable but it will not let us change. If you are an architect and want to go into farming in retirement, you have to at least go for the professional architecture networking events (and paying for them) and spend time and money learning and building the relationships you need for the future.
In a nutshell the lifestyle audit goes beyond identifying how much we spend and look at the ‘why’. There is no actual right or wrong You may want to keep some things. You may want to release others and financially speaking you want to do things that are sustainable not necessarily popular or what is familiar. The aim is to shift your financial life so you do the things you truly value. If not now, when?
If you would more information about the upcoming Retirement Program beginning 3rd May 2019 contact talkcents@centonomy.com or joan@centonomy.com or call 0795 359535
Waceke is the founder of Centonomy. If you want to know more about their program on Financial Freedom in Retirement get in touch on waceken@centonomy.com Twitter@cekenduati