You’re ready to begin on your golden retirement. You’ve got your cash, you’ve got your expenses, but do they equal out? Making the two balance will be beneficial to your retirement. If you’re spending more than you’ve got, then you’ll run into problems.

Income

Make a total of all the income you will be getting per month. Will you be cashing in your stocks and bonds all at once to provide a lump sum that you’re starting with? Will you be relying solely on Social Security every month? Will you be getting a steady income every month or will it vary depending on the season? Find out how much money will be available per month and go from there.

Expenses

Total up how much of your money is going out each month for expenses. Water bill, groceries, housing, and that trip to Paris will all add up each month. Make sure you take into account variable expenses, such as the yearly beach trip with your grandkids. Itemize every expense you make and how much is spent per item. This will benefit you later in budgeting.

Equality

You’ve got your income, you’ve got your expenses, but they don’t equal out. If there’s more income than expenses, then you’re doing fine. If you’ve got the reverse scenario, where you’re spending more than you make, then it’s time to reanalyze your finances. The key is to make sure you do not go into debt during a month and can pay all the expenses with the money you’ve got.

Analyze

Look at the breakdown of your expenses and analyze it. Many times you will find a large amount of cash being paid out for unnecessary expenses. Do you really need to spend $100 per month on cable when you never watch television? Is there a need to take that monthly trip to the mountains? Even if you don’t think there is any fat that can be trimmed from your budget, look closer. You may be able to spend less at the grocery store by not buying unneeded items or you could spend less on electricity by conserving energy.