5 Money Skills That Will Set You up for Early Retirement
How do you picture yourself 15 or 20 years from now? What are your plans when you reach your retirement age? What about early retirement? Has this crossed your mind yet?
Early retirement is the dream of most people. Unfortunately, for many of us, it feels like an elusive dream. In fact, only 18 percent of Americans are able to retire early.
What’s the problem? Money.
It may be difficult. But definitely not impossible. You only need the right mindset and skills to handle your finances well. Take note that you are never too young or too old to get started boosting your financial health. Here are the crucial money skills that will set you up for early retirement.
Big goals start with a plan. It is hard to picture yourself living your retirement years to the fullest when you have no idea how to even get there. Make a detailed plan of how you are going to achieve your goal. How are you going to save up? How can you augment your current income? Do you wish to invest? If yes, what types of investments? Don’t just picture your plan in your head. Write it down. This way, you don’t just forget, but you also get to focus on your options.
If you are to list down all the things that you buy but you don’t need, would you feel some guilt? Many people seem to be spending more than what they earn, which leads to financial disaster. Prioritize saving over unnecessary spending. Experts advise saving first before spending. It doesn’t mean to say that you should never buy yourself a new pair of shoes. You just have to choose your expenses wisely and limit your wants. However, there are times when you are confronted with unexpected expenses. That means you have to be prepared. For these situations, your first resort is your savings fund. But in case that’s not enough, there are online payday loans direct lenders that offer reasonable rates.
Saving BEFORE Spending
The sooner you can start, the better. Saving is easier said than done, though. For you to maximize your savings, you must strategize. There are many ways to save. Start by creating a savings goal. Stick to a budget. Don’t spend more than what you make. Prioritize paying off your debt. Make your savings automatic. If you are employed, ask the HR department about your retirement savings options.
You can double, triple, and even quadruple (maybe more) your income if you are an entrepreneur. Choose the business that you’re most passionate about. Learn it. Master it. And do your best. While starting a business is not an easy feat and it can take some time before you see the return of your investment, the potential of boosting your wealth is really high.
You want to augment your source of income. The more investments you have, the better. You don’t need a lot of money to get started on investing. You can invest in mutual funds or bonds or enroll in your employer’s retirement plan. Open a mini business. It could be as simple as baking and selling cookies on a weekend or doing errands work for a fee.
Achieving financial independence and enjoying your retirement might be a difficult endeavor. But with the right skills, you can set yourself up for early retirement and live the life you have always wanted. Hope these tips have given you inspiration and motivation to start planning for your future.