Retire at 55 – Tip #3 – Drop Excessive Spending

By Mikael | 1,217 views

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So here we are at the third tip in the series of how you can be able to retire at the age of 55 or sooner. In the previous two tips we talked about the importance of starting NOW and why it is important to start making more money.

Today I want to talk to you about why you should look at where your money is being spent and why you should cut back on the places that are not really necessary.

Now this is not another “frugality post” just like every other floating around the online world. I am not a fan of frugality because I think that teaching people to live below their means is not only stupid but also cruel. Why anyone would encourage people to be any less than they can be is beyond me!

However I do believe that there is a big difference about between not being frugal and being a fool with your money and unfortunately I think that many people are spending their money without really knowing why or even on what. Do you personally know where your last paycheck went?

To Retire at 55 You Should Spend Wisely

If you want to be able to retire sooner than the majority of people you can’t allow yourself to be wasting your money. Getting into a habit of wasting money will follow you all your life until you either hit a point where things go really bad (like personal bankruptcy) or till you hit the age of 55 and find that you really don’t have much to show for a long life of work and are not able to retire yet.

You might have some kind of pension plan but I am guessing that it would hardly ever be able to cover your habit of wasting money and do you really want to go cold turkey when you are about to retire? That isn’t really the point of retiring is it?

So what should you do?

Well for starters I would suggest that you start monitoring where your money is being spent. ALL OF THEM! You can do it on paper, in an Excel spreadsheet or whatever you like. The important point is to get a clear picture of what is going on.

Being clear about what is happening to your money will most likely make you stop and think. Did you really need that TVshop product? Or that second lawnmower?

That alone would probably make you cut back on a few excessive spending habits. If that isn’t enough I suggest you take a good hard look and make it a goal to see where you can save some money. If you HAD TO save e.g. $500 per month where would you cut down? Now that you have an overview of where you’re spending your money you can probably fairly easily find the place to cut down.

Slowly but steadily you will be replacing an old habit with a new habit and the new habit can help you be able to put some money aside each month for investments or savings. If you start now you will increase your chances of early retirement greatly.

To Your Success,
Mikael

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