For many of us, the ultimate dream is turning every day into a weekend – that is, enjoying the freedom of retirement.

Whether we love our jobs or not, planning for the day when we don’t have to work but rather can choose how we spend our time – which may be engaging in activities that earn us money or not – is a box most of us want or need to check.

The starting point of doing that is to establish our retirement vision.

• When do we want to retire?
• Where do we want to live?
• What lifestyle do we envision?

Answering these questions help us come up with that “magic number,” which is the amount of money we need to last through our retirement years.

Of course, there are many variables that influence this:

• Other sources of income we will have in retirement, such as social security or a pension
• How we will invest our retirement savings
• How well our investments do
• The rate of inflation
• Health & lifestyle choices

And many more things can impact how much money we will need to save for retirement and what we can spend while in retirement to ensure that we don’t outlive our money.

The good news is, the sooner we prepare for the day when we no longer will or will be able to work, the better off we’ll be and the more choices we’ll have later on.

However, for many, saving for retirement can feel daunting, especially if it seems far away or out of reach financially.

That’s where the 50/30/20 rule comes in.

This simple budgeting framework can help us think about how to allocate our income to different buckets to cover essential and non-essential expenses while ensuring that money is put toward our goals, in this case, retirement.

• 50% for “needs” (essential expenses, such as housing, transportation utilities, and necessary food items)
• 30% for “wants” (non-essential expenses, such as eating out, entertainment, travel, and discretionary personal care expenses)
• 20% for “savings” (our financial goals, such as retirement or paying down debt)

Here’s the thing: Awareness is the first step to positive change, and that applies to our finances, too.

While saving any extra money may seem impossible for many, by tracking our money and understanding where it goes, we can be more intentional.

So, in today’s video, I talk about what the 50/30/20 rule is and how you can use it to help you reach your retirement goal.

 Watch today’s video to learn more about the 50/30/20 rule and how it can help you achieve your retirement goals. (Direct link: https://youtu.be/W7ZhMTNyiXM)

Of course, the rule is a good guide for anyone who wants to take charge of their finances and be more intentional about allocating their funds in a way that most aligns with what they want in their lives.

Tracking cash flow is an important part of that, and if you want to delve deeper into this, I cover why and how to track cash flow in my Cash Flow video. (Direct link: https://youtu.be/sjFYWNeudU4)

Ultimately, you need to find what works best for you and most supports your goals. After all, the best plan is the one you will follow through on. However, if you’re struggling to know what to do, the 50/30/20 rule offers a simple approach to get you started.