Financial Freedom SG

In this post, we will look at a simple tool for doing your budget. The excel spreadsheet.

While a lot of people have Microsoft Office or Open Office in their computer, most people use just MS Word to do work related stuff or Powerpoint when you need to talk to a group of people.

In fact, the excel spreadsheet can be every easy to learn and will help you plan (or budget you expenses) and monitor your spending.

I manage to find these two website which has links to both:

• a personal budget and investment excel spreadsheet

You can use the personal budget to see how much money you are earning and spending by keying in all the appropriate boxes where you see the light blue box. The boxes in the grey area calculates your total income and expenses automatically from your entries in the blue area.

Remember to put your starting balance you have in your savings accounts if any. If you are in debt, just put a minus sign in front of the debt you are carrying over.

Putting all the figures in is half the battle won. Once you know where you are spending your hard earned money and identify where you can save money, you will accumulate a size-able sum of money for investing to prepare for your retirement.

If you need help to find ways to cut your expenses, you can look at my posts on 'how to save money'.

The next tool- Retirement Savings Calculator comes in handy here to estimate how much you will have down the road.

You key in your details in the yellow boxes. Stuff like your present age, when you would like to retire, what is your present value of investment etc. The key here is your estimate of how much investment returns you think you are likely to get.

If you think that you can get 20% or more from your investment, think again. A more realistic figure about 6-7% should be achievable if you put your the core of your investment in a few index funds sprinkled with stocks with a bond/money market fund whose proportion increases the nearer you are to retirement. I'd cover portfolio investing in a later post.

So if you feel that your retirement money at the age 65 is not enough, increase the age to retire or increase the amount of money you will set aside for your retirement. There isn't any other way.

If you are just putting money in your bank account, put in the bank interest rates for savings and think hard about learning more about investment. There is plenty of sites about finance.

Instead of spending hours on TV, invest just one hour a day or even 30 minutes to read the huge pool of superb personal finance blogs to learn about investment. I have 48 links to financial sites and blogs which you can refer to and add to your reading. Read and act on the information learnt.

Have fun on your journey towards financial freedom.