Three Essential Steps To Follow Before Taking An Early Retirement
How would you feel if you knew you would only retire after the age of 70? Or how about if you knew you would never retire at all? The idea isn’t something anyone wants to think about. Unfortunately, with so many having reached their mid-30s and still not having a cent saved for their retirement, it is a bleak reality. Retirement becomes more and more attractive as the years go by, and when you are young with a reliable income stream, it can become easy to neglect the importance of putting money aside for your retirement. The idea always just seems so distant — that is until it’s on your doorstep and you can’t open the door.
So here we will take a look at what some people are giving up in their lives in order to enjoy an early retirement. If you begin early enough, some sacrifices can carry you to a comfortable retirement even without you being among the wealthy 1% of the world.
Strip Your Budget
The most obvious but still most difficult sacrifice is stripping down your budget to its very bare bones. It can be difficult to live below your means when you know that you have so much cash available to spoil yourself on a luxury vacation or to indulge in fancy restaurants multiple times a week. But truly speaking, stripping your budget down is a very effective way to maximize your retirement savings. Yes, you will be scrimping and sacrificing now, but you will reap the rewards once you enter retirement. It sure is better than sacrificing a lot during your retirement!
Pay Off Your Debt
You really may not want to pump large amounts of money into paying off your debt, but if you are saving money and paying the bare minimum on your credit card, home loan, or other debts, then you really aren’t actually saving. In the long run, you are costing yourself higher interest payments by sticking to the bare minimum payment structure. Fight your protests and finish off your debt before you can save with a clear conscience and you will have saved yourself a mountain of interest. If it helps, pull together a few calculations so that you can convince yourself – having an idea of just how much interest you will have to pay for your debts by extending them to their longest term might be just what you need to frighten you into finishing it all off!
Maximize Your Income
If you happen to have some free time in your life, try to use it to generate an extra income. You don’t need to take up a job you dislike or one that will weigh heavily on your mind and body. In fact, you don’t need to take up another job at all if you can’t manage one! The idea here is to simply try your best to bring in extra income. It can be a creative adventure where you invest in your interest in pottery and begin selling custom pots, creating art, or sewing clothes. Or it can be as simple as finding a free Saturday to clean up your garage or declutter your home by having a garage sale. You could offer your services on weekends, like tutoring kids in math or English, holding a baking class, or even selling some baked goods. Whatever it is and as long as you are enjoying it, finding means to earn extra cash for your retirement funds will help you immensely when the time comes.
Although an early retirement comes with many sacrifices, you don’t need to deprive yourself of things. Enjoy quality food and quality time with your family, but do so in moderation and make sure that you are putting away a happy and healthy amount of funds for your future each month. This means that you don’t need to live a life that feels like you are a slave to your future. At the same time, you can’t spend every cent in the spirit that you deserve to splurge after having worked hard all month. Retirement will be wonderful when you get there, but enjoy the journey to retirement as well because time is something you can never get back!
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