On the path to early retirement, there are a few mindset shifts that can help you cut your spending, boost your savings, and keep your eye on the horizon. Here are some tips to help you cut your spending and boost your savings to help get you a step closer to early retirement.
Before beginning any financial journey, it’s essential to spend some time figuring out your end goal. This should ideally be a personal goal behind the financial figure that you want to achieve.
If your goal is to get out of debt, identify why that’s important to you. Is wiping out your debt helpful because it’ll enable you to save up for that three-month vacation in Costa Rica, for example? To be able to buy your first home? Or to someday be financially independent?
When you can connect to the deeper meaning behind your financial goal, it will be a lot easier both to negotiate your life around it, and to stick to your plan in the long term.
One important thing to remember as you start to plan your budget is that you’ll need to accept the trade-offs that will need to be made in order to reach your end goal.
Take inventory of your daily, weekly, and monthly expenditures. Among them there will be expenses you can’t avoid, like your rent or mortgage, your bills, your groceries, and any debt payments, and there will be expenses that are more discretionary, like going out to the movies or flying out to the beaches of Puerto Rico twice a year.
When it comes to your discretionary spending, consider what is truly important to you, and see if you can cut down on the rest. If you love going on monthly hiking adventures but don’t care as much about that weekly cocktail you’ve been drinking, cut down on the latter and set some of that aside toward your savings goal.
To quote Ramit Sethi, author of “I Will Teach You To Be Rich,” in his philosophy toward spending: “Spend lavishly on the things you enjoy, and then cut like crazy on the things that don’t matter to you.”
Get inspired. When it comes to finding financial tricks to apply in your own life, turn to YouTube, podcasts, blogs, and books that could help you move toward your goal.
Try doing a Google search for videos, podcasts, or books about terms like saving, spending, and budgeting, and start learning tactics to organize your personal finance in effective ways.
Ultimately, seeing your goals play out takes time and patience. When it comes to a goal like saving enough to retire early, it’s really about playing the long-game.
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