If you’ve got a dream of retiring early and can already see yourself gardening or relaxing on the beach mid-week, then don’t worry because you’re certainly not alone. Many people share that goal, and it can indeed be achieved with some planning, smart financial strategies and a really proactive mindset. Whether you’re hoping to retire in your early 50s or even sooner, the key is to try and build a solid foundation, literally and figuratively. Let’s check out some top tips to help you save more effectively and secure your future.
Set Clear Retirement Goals
Okay, so take it in steps and don’t worry about getting overwhelmed when you initially start your retirement planning. Begin by defining what “retirement” means for you personally. Do you see yourself traveling the world, starting a new hobby or simply relaxing at home? Pinpointing your goals is what sets the stage to estimate just how much you’re going to need to save. Sit down and create a detailed budget that includes your desired lifestyle, expected expenses and any potential sources of income. This is your base and provides a clearer picture of the amount you need to accumulate as well as help you stay focused on your objectives. You know that it’s sometimes much harder to envision something if you don’t have it down on paper in front of you. Also, when you have a goal in mind you’ll likely make better spending decisions because the image of you in early retirement will be more enticing than a shopping spree or buying other non-essential items. But don’t worry, there’s no need to give up on everything; you can still grab a take-out coffee or play your favorite games online, especially if you are using some of the profit from your investments to do so, such as bitcoin. Many players use their smarts to buy bitcoin when it’s low and then instead of selling when it’s high, they entertain themselves at an awesome crypto casino that allows you to use cryptocurrency to play poker, slots and many other games. It’s anonymous and secure, so you’re safe all round.
Start Saving Early
It’s never too early to start saving, you’ve surely heard that saying many times. The power of compounding is a significant factor in growing your savings. The earlier you start, the more your money can work for you. Even if you’re starting late, it’s still beneficial to begin as soon as possible. The mindset of waiting until something special happens or real estate becomes cheaper is a sad one, because you’ll never manage to catch up. While looking at the prices of property for example, it is understandable that you get somewhat overwhelmed at the initial cost, but what many don’t realize is just how little they need in daily life. Every drink you buy on a night out could be put towards you rental property, and instead of spending on getting nothing in return but a hangover, your money will hopefully grow over time and you will always have a place to live. Don’t wait for something to happen, look at what you could possibly afford – it doesn’t have to be your forever home right now – and then buy a small investment property and make it a family affair by including your children. Your kids will thank you in future.
Reduce Debt
The points in this article may seem obvious, but you’d be surprised just how easy it is to fall into a YOLO (you only live once) mindset and then end up with nothing towards the end of your life. Again, YOLO isn’t necessarily bad, but it’s essential for you to choose your ‘battles’ wisely. So, be sure to focus on paying down high-interest debt, such as credit card balances, as quickly as possible. Many people are unaware of how credit card debt even works and end up accumulating thousands of dollars in interest. Implement strategies like the avalanche method (paying off the highest-interest debt first) or the snowball method (paying off the smallest debt first for psychological wins). As your debt decreases, redirect those payments into your savings and investment accounts as discussed above.
Plan for the Unexpected
How does one even do this? Plan for the unexpected? There is actually a way. Because life is so unpredictable at times, you should always aim to build an emergency fund that has at least three to six months’ worth of living expenses to cover unforeseen costs without this derailing your retirement savings. Additionally and depending on the price, you can consider looking into insurance policies to protect against major risks, such as disability or long-term care needs. However, the insurance policies only apply if the rate charged is not too high. Finding a balance between YOLO and penny pinching would be ideal. Of course, no one should sit around saving every cent and not enjoying themselves at all, and on the other hand, no one should be spending every dollar they have each month, or worse – living beyond their means.
Stay Committed and Patient
One of the main no-no’s when it comes to saving is giving up. Saving for early retirement requires both discipline and patience, as well as an understanding of credit card interest and other debt. There will be challenges and temptations along the way, that’s certainly true, but stay focused on your long-term goals. Regularly remind yourself of your retirement vision and the reasons behind your efforts. Stay committed to your plan, and celebrate milestones along the way to keep motivated. Piece by piece and step by step, everything will go in the right direction if you simply start today.