Retiring early may seem like a dream, but it’s possible to achieve if you put in the effort. A big help in making that dream come true is avoiding any habits or expenses that keep you from being financially independent and retiring early. Here are 18 things you should eliminate if retiring early is your goal.
Excessive Debt
Focus first on paying down high-interest debt, such as credit card balances and payday loans. Paying these off before investing is a surefire way to put more money in your pocket because the interest charged on these loans can be eye-popping. Make sure to pay at least the minimum on your low-interest debt (e.g., student loan debt, mortgage), and consider creating a plan to pay those balances off before increasing your investment.
Impulse Spending
Create a budget that works toward your financial goals, and know the difference between what you need and want. Knowing this will result in being more mindful of purchasing things because it is a good deal.
Have a lot of Subscriptions?
If you never use them, cancel them! You can use one and save even more money if you have more than one. Can’t cancel? Look and see if there is a similar service without any fees.
Unnecessary Expenses
Take a hard look at your monthly spending to determine where to cut back. Decreasing discretionary spending on non-essential items will significantly increase your ability to save.
Limit Your Credit
Just because the cash is there doesn’t mean it will last forever. Who wants to pay off a t-shirt with interest two years from now? Plus, the less you use credit, the more money you will have.
Unplanned Housing Outgoings
Assess your housing outgoings. After that, evaluate the measures you can take to reduce costs. Some of the elements you may consider include downsizing the home you live in, refinancing the mortgage you currently are in as well, and relocating to a different part of town.
Sell Your Unused Possessions
Another benefit of decluttering is the opportunity to sell unused items. The earnings from selling your possessions can be put into your savings account.
Unwarranted Commuting Costs
Assess and adjust your commuting costs. Can you make taking public transportation a new thing? Carpool instead of driving by yourself. Plus, you work from home, so you can save lots of money.
Reevaluate Your Brand Loyalty
Generic or store-brand products provide the same quality without the extra price. Typically, brand loyalty schemes offer you products at a lower cost.
Get The Right Insurance And Stop Wasting Money
Do you have the appropriate insurance for your current stage of life? Look at your policies and eliminate any you no longer need. Stop paying for unnecessary coverage or duplications of coverage.
A High-Interest Savings Account
A savings account is seeing your paycheck grow and grow but at a snail’s pace. Maximize the interest on your savings by looking into higher-yield options like online-only savings accounts or investment vehicles. Make sure your savings are helping you edge toward your retirement goals.
Avoid Unnecessary Technology
Upgrades determine whether or not a technology upgrade is necessary. Spend your money on functionality rather than fancy trends. Only purchase new technology when the old technology can no longer meet your needs.
Reduce Your Meals Out
Cutting back on excessive dining out in favor of home-cooked meals will save money and also help you make healthier choices about what you are eating.
Unmonitored Utility Costs
Create practices at home that will save you more money on utilities by using energy-efficient appliances, being mindful of using water and electricity, plus much more.
Assess Investment Fees
Understand fees associated with various investment options and ensure that if you’re using actively managed funds, the fund managers generate alpha or excess returns compared to overall market averages. Also, review your retirement investment choices regularly to find the lowest-cost funds, typically index funds. Again, if you need assistance with this, use an advisor. Investment Advisors and brokers can get you access to these low-cost index funds. Make sure your investment philosophy aligns with theirs.
Reevaluate Whether You Need Your Gym Membership
Are you using your gym membership? Could you be getting the benefits of a gym membership without the high cost? Organizations or clubs: Do you belong to a club or organization whose membership you could cancel? Are you using all of the benefits it offers?
Unplanned Healthcare Costs
Preventing incidental healthcare expenses is one way to avoid taxes and unplanned medical costs. You can prioritize getting yearly checkups for your health and well-being. You can ease the pain of taxes and unexpected costs by maintaining a healthy lifestyle, being active, and finding cost-effective healthcare solutions.
Unsustainable Lifestyle Inflation
Don’t fall victim to lifestyle inflation if and when your income goes up. Lifestyle inflation is the act of increasing your spending as your income goes up. There’s a saying that states, “The more you make, the more you spend.” Plenty of high-income earners are always in debt because they just spend their money every time they make it instead of saving it or investing it.
