Could your spending habits be killing your retirement dreams?
Ok, killing your retirement dreams is quite harsh so you can stop agonising. But, according to an article on Telegraph.co.uk, everyday people like you and I are burning a massive hole in our monthly budgets.
An interesting post by Rosie Murray-West, financial blogger for the news site, suggests that we’re wasting about £80,000 over the course of our lives. Where does the money go? Here’s a quick rundown of how we waste our money:
- CDs and DVDs we only watch once
- Paid smartphone apps that are used once then forgotten
- Computer games
- Cosmetics and beauty products
When you break the figures down, we are, on average, wasting around £107 a month. This might not seem like a lot but over the course of your lifetime the money could be better spent.
Here are a few examples of what £80,000 will buy you
- An additional £4,000 a year in your pension pot (assuming 20 years in retirement and not taking returns into consideration)
- A decent extension to your house (think of it as an inheritance gift to you family)
- The BMW i8 which has investment potential)
- A holiday home or retirement property near the sun-kissed Italian shores
- A decent portfolio of shares
Considering the length of time it will take to amass £80,000 worth of savings, the most realistic option on the list would be to invest in your pension. I know it’s not the sexiest choice. Yes, you could die two days in to your retirement but, given our ever increasing life spans, that’s unlikely.
Guarding against an uncertain future is, for many, becoming a very high priority. The chances are that many of us will have more than 20 years in retirement (even after retiring after 65).
But will you really start cutting back on those apparently useless purchases? Probably not. After all, sometimes a little retail therapy goes a long way towards picking you up when you’re down (as does a big bar of chocolate). Besides, if we all stop spending on little luxuries how would the shop owners earn any money?
Decisions, decisions! Ok, I’m going to rent a DVD and munch my way through a big bag of Maltesers as I mull this one over… 😉