Track Wasteful Expenditures

There's an article by Humberto Cruz in today's Boston Globe that hit home with me: To save more for retirement, first track the wasteful expenditures.

This piece was prompted by a reader who apparently wants to work forever and doesn't know how to save:

"I don't plan on retiring. I don't have enough money saved and believe retirement is the path to early death (too much time with nothing to do). We all know we aren't saving enough even though we deny it. We may feel guilty and may wish we could save, but there simply isn't enough income. OK, there is a way to do it but few of us are prepared for the sacrifices. Your columns need to focus on how to save."

I don't know why I'm surprised when I see how naive and unrealistic people can be. What happens if you have no savings and can no longer work due to health problems? What if you're a downsized fifty-something year old worker who can't find a new job? I firmly believe that you have to hope for the best, but plan for the worst. Unfortunately, some people just don't get it.

I track my expenses with Microsoft Money software so I know exactly where my money is going (see Where Does Your Money Go?). I encourage everyone to do the same and cut the fat from their budgets.

"A penny saved is a penny earned."
-- Benjamin Franklin