How to Retire Young and Enjoy Today Instead of Waiting for Tomorrow
When you see someone in their 30’s already retired you ask how to retire young. You’ll have a couple of theories about this person: they have “family money” or they won the lottery. That’s easier than thinking about the daunting task of planning for the future.
Are You Ready to Begin Your Retirement Plan
You think you are ready to change your lifestyle in order to begin the process of how to retire young. The first step is your mindset. Unless you do have family money or won the lottery, you will have to work hard to obtain your goal of retiring young.
The reason your frame of mind is so critical is because you have to live on a budget in order to be financially independent as you plan how to retire young. If you keep stopping for a vente café mocha every morning on your way to work then spend $10-$15 for lunch every day, you may not be ready to take the giant leap of living on a budget.
If you fix your coffee at home and brown bag your lunch, you’ll save about $20 a day. Stop and think through your daily lifestyle choices and remember you are working on how to retire young. Although you want to enjoy today you don’t have to spend money and the more you save, the easier it will be for you to plan how to retire young.
Prepare and Live on a Budget
You’re ready to jump on board and live on a budget so you’ll know how to retire young. If you’ve never prepared a budget, it isn’t as intimidating as you might think. Here is how to create a budget:
- Put your net monthly income at the top of the page
- Next you will list all of your living expenses: mortgage or rent, insurance, utilities, auto expenses, and all other expenses
- When you add up all of your expenses it should total less than your monthly income, if so, then you have the start of your savings for how to retire young.
If your expenses are more, then you need to trim your budget. You either have a shortage of income or living above your means.
Cut Your Expenses
You need to work on your budget with full force to reduce your expenses, even if you are earning more than you are spending. How to retire young means saving more and more every month and year to build your financial independence.
Take your list of expenses, how long has it been since you’ve “shopped” for property, auto, life and health insurance? It’s amazing how quickly your insurance company will reduce your premiums if they know you are shopping for the best rates. Do the same with your telephone, internet and cable services. There is plenty of competition for these products so you don’t have to continue paying more than you should.
Keep whittling away at your expenses as you work towards how to retire young, but you also want to consider how to invest wisely.
Find a good financial advisor that isn’t a sales person. To quote Author, Radio Host and Financial Guru, Dave Ramsey, “You want someone with the heart of a teacher” to help you invest for your future.
Also, don’t forget to establish a contingency fund. You want to invest wisely but also keep at least six months of living expenses somewhat liquid.
Conventional wisdom means retiring when you can afford to live on your savings and investments rather than living at the poverty level. If this means working a few more years, it will be worth it.
Where Would You Like to Retire
Retiring young begins with planning your financial independence. Once you’re comfortable with your budget and investing, now the fun begins.
- Your possibilities are global
- Find accommodations that suite your individual needs
- Staying in your own home or moving to another location
- Do you prefer a larger or smaller home
- If you are considering a retirement community, do you want on-site staff with cooked meals and personal care or do you want independent living
What Do You Want to Do After Retiring
One of the most exciting aspects of preparing for retirement is having so much free time to plan for; your activities options are boundless. You’ve found your housing preference so now you can travel to exotic places, learn new skills and hobbies that you never had enough time to pursue, all waiting for you.
Plan long term and have extra money put aside so that your fund doesn’t get cut short. Even if you don’t plan on doing anything extravagant, you still want the best retirement possible.
Retiring young isn’t just about money, it’s also about what your lifestyle, what you will do with your time, what do you want to do and where you want to live. Although most of this is determined by your retirement savings, you still have options.
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