Reported by Ryan Brennan
When it comes to people wanting great wealth, the task may seem too hard to achieve. Because of that, many people never get a chance to reach that standing in life. However, the thought of never running out of money still lingers on in many minds.
Does this sound like you? Well, you might be pleased to hear that it’s actually not that difficult to never run out of money. All it really takes is a few calculations and common sense to bridge some gaps.
First off, you will need to calculate what it will potentially cost you to live. This can easily be estimated by taking a look at your current living expenses. Be sure to take into consideration any projected lifestyle changes that might alter this number, and adjust it accordingly. If you track your spending already, this will be an easy task for you. If you don’t, then you should start doing so immediately.
According to Wealth Pilgrim, “90% of people underestimate their average monthly spending by 25% or more” when calculating their future costs of living. Those people who do this will find themselves in a potentially dangerous position.
After you’ve calculated your costs of living, take a deep breath, because the hard part is over. The next step is to calculate the amount of money you are going to earn over your lifetime. Make sure to tally in any potential pensions or Social Security checks, in addition to any work you do or any investments you have.
Once you’ve successfully completed these two simple steps, you can easily get an idea of whether or not you will run out of money. If you see that your costs of living is more than your income, then you will have to do some tweaking to your lifestyle. You will either have to increase your income with another job, for example, decrease your costs of living somehow or a little bit of both.
The truth is, it’s really simple to keep your finances in line, and this has been proven by many financial analysts worldwide. It’s important to constantly assess yourself and your current standing financially. In order to live a comfortable and worry-free life, it is vital that your income always stays at a higher number than your cost of living. You don’t want to get stuck paying back money that you don’t have because that will only dig you into a deeper hole.