Achieving a Comfortable Retirement: Balancing Your Needs and Wants

Written By:
Provident Financial Planning
Published On: 
May 13, 2024
At Provident Financial Planning, we believe that prudent financial management plays a crucial role in achieving a comfortable retirement. Let's explore a holistic approach to spending and preparing for retirement, guided by a balanced financial framework.
10% Tithe: Allocating 10% of your income to charitable giving, or tithe, not only supports causes you care about but also fosters a sense of purpose and generosity. Whether you support your local community, religious organizations, or global initiatives, giving back enriches your life and positively impacts others.
10% Short-Term Savings: Setting aside 10% of your income for short-term savings provides a financial cushion for unexpected expenses and short-term goals. This fund, ideally kept in a high-yield savings account or money market account, serves as an emergency fund to cover unforeseen medical bills, car repairs, or home maintenance.
10% Long-Term Savings: Planning for the future requires disciplined saving and investing for long-term goals, such as retirement. Allocate another 10% of your income to long-term savings, primarily directed towards retirement accounts like IRAs, 401(k)s, or other employer-sponsored retirement plans. These accounts offer tax advantages and compound interest, helping you build wealth over time.
25% Housing Expenses: Housing expenses, including mortgage, or rent payments, property taxes, insurance, and maintenance costs, typically consume a sizable portion of your budget. Aim to allocate no more than 25% of your income towards housing to ensure affordability and avoid financial strain.
45% Discretionary Spending: Finally, allocate 45% of your income towards discretionary spending, which encompasses non-essential expenses such as dining out, entertainment, travel, and hobbies. While it's essential to enjoy life and indulge in occasional luxuries, maintaining a balanced approach to discretionary spending ensures financial stability and prevents overspending.
By adhering to this financial framework, you can create a solid foundation for a comfortable retirement while balancing your current needs and wants. As financial advisors, we understand that everyone's financial situation and retirement goals are unique. We're here to provide personalized guidance and support to navigate the complexities of retirement planning and achieve financial peace of mind. Schedule a Zoom appointment or visit our Southlake, Plano, Dallas, Houston, or Atlanta offices. Our team, consisting of professionals and an in-house tax team with expertise in JD, CPA, and CFP®, is ready to help you. Whether you need assistance with tax return filings or wish to craft a financial legacy plan, we are dedicated to providing comprehensive financial guidance.
Retirement, spending, needs, wants, financial management, financial model, tithe, charitable giving, short-term savings, emergency fund, long-term savings, retirement accounts, IRAs, 401(k)s, employer-sponsored retirement plans, housing expenses, mortgage, rent, property taxes, insurance, maintenance costs, discretionary spending, entertainment, travel, hobbies, financial stability, financial peace of mind, personalized guidance, financial advisors.
Share this insight
Written By:
Provident Financial Planning
Published On: 
May 13, 2024
Download a PDF

Subscribe to receive the latest blog posts to your inbox every week.

By subscribing you agree to with our Privacy Policy.
Click the button below to download your PDF.
Download PDF
Oops! Something went wrong while submitting the form.

Take Control of Your Financial Future Today

Guided by our values of faith, service, and transparency, we at Provident Financial Planning are ready to help you navigate your financial journey. Schedule a consultation with us and discover how we can create a personalized financial plan for you.