Do you dream of traveling the world during your retirement? Or, maybe moving to the beautiful seaside town that you have always dreamed of living in.
Whatever your retirement goals, you will likely need to make some sacrifices now to be able to afford the retirement that you want. Good news is that this isn’t as hard as you think.
There are some small changes that you can make now that will have a significant impact on your savings. Here’s what you need to know to live on less now so that you can have the kind of retirement that you desire.
Stick to a Budget
To reduce your spending, you must have a budget. If you don’t have a budget, creating one should be a priority. This can help you stop overspending, save money, and meet your goals.
This financial tool is simple to assemble. There are many different programs and templates available to help you make a budget. Find the one that works best for your needs and stick to it.
Some people use an “envelope” system. This method helps you visualize and control where your money is going. You use different envelopes for each expense. Money budgeted for each expense is put into its respective envelope. Once the money from each envelope is gone, you will have no more funds to spend on that category until your next budgeting period.
Rethink Necessities
To have enough money saved up for retirement, you will probably have to get rid of some significant expenses now. One way to do that is to redefine your needs. Many people consider luxuries like cable TV, vacations and a new car as needs. This trick is pretty simple – just ask yourself “Is this something that I really need?”
Say No to Debt
Many people mistakenly believe that buying a new car gives them freedom. In fact, if it is paid for with credit, this takes away your freedom.
Debt, no matter what kind, is like a ball and chain. It will keep you from saving money and trap you in a vicious cycle of debt. If you can’t pay for the item with cash, then you really can’t afford it.
Make it a habit of forcing yourself to pay cash for everything that you buy—even your cell phone. Expensive cell phone leases and contracts are just another form of debt. When it is time for a new phone, buy it with cash. If you need another car, choose something that you can afford without financing. Saying no to debt gives you freedom—both now and in the future.
Use the Library
Public libraries are great resources that do not get used enough. Your local library may offer free e-books, magazines and music. Some libraries even offer free passes to local parks and attractions.
Others offer complimentary access to ancestry databases. You might discover free entertainment and enrichment classes, such as cooking, painting and more at your local library. Instead of spending money going to the movies, why not participate in a free class or event at the library? You will learn something new and save more money towards your retirement.
Don’t Be Afraid to Haggle
Oftentimes, asking for a lower price on a service or good can yield good results. However, negotiating for things like home repair services or a new car is something that many people find uncomfortable. Most are not willing to talk about money nor are they comfortable asking someone for a favor.
Although negotiating with others can be intimidating, it is the key to getting the best possible price on things.
Put Money into Savings First
One important part of living on less is to put money into your savings first. It is easy to overspend when you have money on hand. In fact, many people put savings dead last. Before you do anything else with your paycheck, contribute to your savings account.
Financial guru Dave Ramsey recommends putting money into savings even before paying off debt.
Taking the steps outlined above will help you reach your retirement goals. Although you will have to make some changes in your lifestyle now, doing so will let you retire the way that you want.
Regards,
Ethan Warrick
Editor
Wealth Authority
