Are You A Good Money Manager?
Do you have what it takes to retire early? Most of us are not lucky enough to inherit wealth, with the lottery or strike it rich in the stock market. We have to save for retirement one dollar at a time. If you manage your money properly you will find that extra investment money.
To afford early retirement will require lean living and a bit of creativity. Everyone is not cut out for a lean lifestyle, are you?
Money Management Tips
- Debt blocks your efforts to achieve an early retirement. Debt zaps your extra investment money. Debt is even more of an enemy when your goal is early retirement.
- Keep your debt under control and save money on interest and fees. You also save money on everything you purchase because a low amount of debt keeps your credit scores high.
- Check your credit report and credit scores at least once a year; mistakes can happen.
Your Investment Habits
Max out your retirement plan investments every year. If you cannot do that then at least invest 10% of your income every year.
- Earmark your money by setting up special accounts for your large expenses. The 3 most common would be taxes, insurance and vacations.
- Save money by brown bagging your lunch during the work week and treat yourself a bit on weekends. Be careful though, avoid making it a standard operating procedure to eat out; that should be a treat, not a mandatory event.
- Start investing for retirement when you start your first job, get your first W2 form. Thanks to the power of compounding interest, the longer your money is invested the more money you will accumulate.
Your Shopping Habits
- Cut back on pampering yourself, you can do that after you accumulate enough money to afford early retirement. Pampering may include: daily café lattes, weekly pedicures and manicures, bottled water. Make coffee at home, cut back and only do the nails once a month, put a water filter on your home faucet.
- Always double-check your bills; mistakes do happen.
- It’s okay to shop at thrift stores; it has become quite popular.
- Use credit cards that offer reward points for everyday items that you can actually use.
- Follow sales cycles. Plan your meals around these cycles.
- It has become popular to combine coupons with rebates to save money.
It’s Your Retirement
You either find a rich relative or squirrel away your own retirement money. It will not get done without your efforts. You can do it if you take the time to plan how to spend and invest your money.