Nowadays, an increasing number of people get a chance to enjoy their early retirement at an early age. Still, many others have to wait until they retire from their companies. In the US, some early retirees take it as early as 35 by just planning better.
Saving for early retirement is one thing that will help you enjoy your retirement at a young age. Do you know you can save up to $18,000 a year on a simple action like quitting unnecessary activities? Here are some little-known ways you can start saving for early retirement:
1. Stop Eating Out
Dining out can make you spend a lot while you can make your meals at lower prices. For instance, why should you dine out with your spouse and you can cook? Saving cash by abstaining from out-dinners is one way to start saving.
Imagine using $750 monthly for eating out, yes, counting drinks and delivery:
- Drinks – $189
- Buying lunch – $173
- Restaurant meals – $210
- Delivery or takeout – $178
The sum is about $900 yearly. So, this means that this approach will help you save a lot by preventing extra cash spent on out-dinners. Also, you can avoid drinks and beverages since lemon with water serves better, and it is for free! This will help you save by reducing your bill by about $15.
2. Watch Your Phone Upgrades Routine
Everyone nowadays needs a new phone in town. Whenever a new phone upgrade from Apple, Samsung, or Google emerges, some will dump their old one to get new. Such an approach is unnecessary if you want to start saving for early retirement.
Buying the latest model phone can require an extra $25 monthly, which may be for leasing or financing. Also, you may need about $600 or more for a new upgrade.
Keeping your old phone without upgrading can help you save more than $1500 yearly. This is possible since today’s phones do not break easily and function similarly while not adding value to you. In this way, the savings you accumulate is a better resource to use in the stock market as an appreciating asset.
3. Check On Clothing and Other Apparel Expenditures
Most Americans, on average, use $1866 yearly for apparel and clothing. The reason; is they buy the newest fashion clothes that emerge. If you remember that there would be a new contemporary trend for a few months, then the habit is not worthy.
Those willing to save for early retirement should check their clothes and apparel expenses. You can use your clothes until they stain before spending additional dollars to buy new ones! Vow only to buy less, as Marie Kondo suggests.
Reducing clothes expenditure may help you step into shopping malls only two to three times yearly. This means you can spend about $50 and $100 for every trip you take. Hence, you save more compared to an ordinary American’s average spending.
4. Ditch Lottery Tickets ASAP!
Reports like Bankrate say that lottery consumers use $86 monthly on lottery tickets. Some polls say that a lottery is not a way to help you with your retirement.
Lottery tickets never make sense. Saving for early retirement would mean ditching lottery tickets, which tend to be addictive. Doing so will help you gain more value in your savings since one can save around $1032 every year after branching off from lottery activities.
5. Choose To Stay Away From Extended Warranties
It would be best not to overestimate the high chance your products will need repairs. Extended warranties are services that consume your extra cash. Also, some terms for such warranties may not cover loss or a gadget you damage yourself.
However little extra amounts are, they count for your savings. Avoid extended warranties even if some deals seem good since others could deny your claim for not following routine maintenance.
6. Start Saving By Avoiding Extras on Cable TV
Cutting some costs of Cable TV and saving on it is a way some people use to save for their early retirement. Do you watch Cable TV? If so, you should start cutting off some of its expenses; they are extra waste.
For instance, other people may pay for channels they never watch. For example, while others pay $100 every month, you could save extra cash by paying $49.99 for a monthly YouTube TV. That is half of the usual monthly expenses you save from TVs. Also, you could decide to compare the TVs you would use to cut more costs.
For example, using Hulu Live TV requires $55 monthly, while Sling TV is only $30 for a similar period. Otherwise, it would be best if you used YouTube TV, which provides top channels with only a base price than other competitors. As a caution, do not waste more dollars yearly on expensive subscriptions you never use.
7. Stop Giving In to Impulse Purchases
Impulse purchases are hectic expenses that may catch you unnoticing. Such expenditures may waste your money for a simple but bulk purchase. For example, walking through a Peloton bike seems to be a good investment, and you decide to purchase it. It may need around $1995 for the cycle, so getting it means you should always use it.
Since not putting such an item into work will mean wastage of expenditure. So, if you are willing to start saving, you should stop buying impulse purchases for nothing and focus on saving more.
The tips above require your commitment to keeping such practices. Above all, spending less is primarily all about changing your mindset about your lifestyle. Stick to these tips, which will eventually rocket your savings.
Now is the time to take action!
You should stop doing so many things now that may help you save more. Keeping in touch with investors and retirees is another way to help you know how to save more early before retirement.
Frequently Asked Questions about Retirement Planning:
How can I save for retirement if I am already in debt?
If you are in debt, you should focus on paying off your debts first before saving for retirement. You can do this by creating a budget and sticking to it, or by consolidating your debts into one monthly payment. Once you have paid off your debts, you can start saving for retirement by contributing to a 401k or IRA account.
What ways can I save for retirement if I am not employed?
You can save for retirement by contributing to a 401k or IRA account if you are not employed. You can also save for retirement by investing in stocks, bonds, and mutual funds.
What is the best way to save for retirement?
There is no one “best” way to save for retirement. The best way to save for retirement depends on your circumstances and goals. You may want to contribute to a 401k or IRA account, invest in stocks, bonds, and mutual funds, or create a combination of these strategies.
How much money should I have saved for retirement?
There is no set amount of money that you should have saved for retirement. The amount of money you should have saved for retirement depends on your individual circumstances and goals. You may want to consult with a financial advisor to determine how much money you should have saved for retirement.
What are some tax-advantaged ways to save for retirement?
There are several tax-advantaged ways to save for retirement, including 401k and IRA accounts. You may also take advantage of other tax breaks, such as the saver’s credit if you contribute to a retirement account.
What are some things I should avoid doing if I want to save for retirement?
You should avoid doing several things if you want to save for retirement. These include:- Withdrawing money from your retirement account before you retire-Taking out a loan from your retirement account- Cashing out your retirement account when you leave your job- Not contributing enough to your retirement account to get the full employer match- Investing too conservatively or too aggressively in your retirement account- Not diversifying your investments in your retirement account- Not rebalancing your investments in your retirement account- Not reviewing your retirement account regularly.
What are some things I should do if I want to retire early?
If you want to retire early, there are several things you can do to increase your chances of success, including:- Save early and often- Invest in a diversified mix of investments- Review your retirement account regularly- Consider using a retirement calculator to see how much you need to save- Stay disciplined with your spending- Make catch-up contributions if you are over the age of 50- Consider working with a financial advisor to develop a retirement savings plan
What are some things I should do if I want to retire comfortably?
If you want to retire comfortably, there are several things you can do to increase your chances of success, including:-Save early and often- Invest in a diversified mix of investments- Review your retirement account regularly- Consider using a retirement calculator to see how much you need to save- Stay disciplined with your spending- Make catch-up contributions if you are over the age of 50- Consider working with a financial advisor to develop a retirement savings plan.
What are some tips for saving money for retirement?
Cutting expenses, living below your means, and investing wisely are all critical factors in saving money for retirement. Additionally, starting saving early and making regular contributions to your retirement account is essential. Automating your contributions can help ensure you consistently put money away for retirement. Finally, taking advantage of employer matching programs can also be a great way to boost your retirement savings.
What are some ways to cut expenses?
Some ways to cut expenses include: cooking at home instead of dining out, driving less and taking public transportation more, getting rid of cable TV, and shopping at thrift stores. Additionally, cutting back on unnecessary purchases like lottery tickets and extended warranties can help save money. Finally, comparison shopping and looking for sales can help stretch your budget further.
What is the best way to invest for retirement?
There is no one-size-fits-all answer to this question, as the best way to invest for retirement depends on factors like age, risk tolerance, and investment goals. However, many experts recommend diversifying your portfolio across different asset classes, including