Friday 8 June 2018

When expenses exceeds income: Is retirement possible?

Thoughts of my mum retiring soon has gotten me to think about the expenses that she incurs monthly. With me entering the workforce soon and my brother just starting his university, my mum definitely still has to work a few more years. However, she has mentioned to me a few times that she hopes to retire as soon as she can. Her friends currently are still employed however she has a friend who is retired and told her of her lifestyle which my mum looks forward to.

Find out more: Retiring Early and comfortably?- What is FIRE?

Over the past few months, I have noticed that we have high expenses that if it were to continue after my mum has retired, it would drain her savings in no time. We normally do spend within the budget and go out to eat only during the weekends. This is because we are a single income family so my mum does not have much savings for herself after spending on necessities for us all. Maybe because between the end of last year to the beginning of this year, my brother ORD-ed followed by entering an overseas university so my mum really wanted to spend more time with him as he will be away for quite some time.

Read more: How to retire and still survive

The first major spending was renovation. Our home underwent the home improvement project (HIP) which was proposed by the government. Subsidies was given for this and actually most expenses are covered however, because we had to cover up everything and our are pretty old. So we ended up throwing our sofa, coffee table away. We also did a repainting of our home and because our accessories of the bathroom were quite rusty, we had to change them. This all added up to a pretty hefty sum.

Another thing we spend on this year was our trip to Japan, it is our last family trip before m brother flies overseas for his studies. In the later half of the year, my mum will be flying over with my brother to send him for his studies. This will incur another sum of money being spent. Even though my brother will be on a scholarship while studying overseas but his expenses are also pretty tight due to him studying in the city.

I have realized that my mum spends a large proportion of money recently on traveling for example for 2019, she has a trip planned with her friends too. Even though I am worried for her in terms of her savings, I am also glad that she knows how to relax and reward herself. I do know that I cannot force her to restrict her spending but I have trying to ask her to park her money at places that can earn her a better interest like the SSB. Of course, I do hope for her to be able to enjoy her time and retire soon even though I am not too sure if she can cope with the extra time. I think from young, I always thought that we would be all right because my mum would always be working however now is almost the time when she wants a break. I shall take a step at a time and see how everything goes.

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