For many, early retirement seems like a just another pipe dream. Maybe if you threw in the words, ‘sole heir’ or ‘mega-million winner’ along with it, it would seem more plausible. We understand that money isn’t an issue for some people, but it is for the overwhelming majority. There are so many bills to organize and pay and when you add children into the mix, your expenses only get higher. With necessary expenses such as groceries, water, electric, college funds, cable, and more to consider, the prospects of retirement seem to get farther and farther away. However, early retirement is, in fact, doable and not nearly as difficult as one may think it to be. It all starts with tracking your spending.
Keeping Tabs On Your Spending
Tracking your spending is the first step to early retirement and financial freedom. If you play your cards rights–instead of playing the lottery–and start tracking your spending religiously, you too will have the ability to save up sufficient funds that will allow you to attain financial independence and if you want, early retirement.
Every time you make a purchase or pay a bill, log it into your spreadsheet. Whether its for gas, groceries, the water bill, or a nice pair of shoes you couldn’t resist, make sure you enter it in your spreadsheet. If you really make the effort to do this, by the end of the year, you will know exactly what you have spent. From there, you can get a better idea of the kind of spending that needs to be reduced–restaurants, retail therapy, etc.–and determine how much you can live on each year.
Now here comes the tricky part, once you have come up with a reasonable number that will allow you to save and be financially comfortable, you must stick to that budget.
Just like most things, the first year is always the hardest, but once you get used to the system, you will eventually be able to find more ways to save. With clear and realistic retirement goals put into motion, make sure you have more than one saving account to keep your money–401K, health savings account, etc.
With the right mindset, financial freedom and early retirement is definitely possible.