Retirement looms in the future like a golden promise — bright, desirable and rewarding. Maybe you hope to retire abroad, or just finally relax into the home you’ve had for years. However you won’t be able to retire into a blissful dream without doing the work now to create and save money to live off of then.
Check out these five habits that will help you design the dream you want to live.
Saving for retirement is a long-term process. The sooner you get started, the easier it will be to accumulate wealth gradually. Instead of trying to rush into a last-minute get-rich-quick scheme, taking the time over 20 or 30 years to save will position you well to retire in style. Shifting even a few dollars from each pay check you earn in your younger years will help you create the nest egg you’ll need to retire early. Buy to let mortgages are similar to, but different in comparison to residential mortgages. Compare the rates on these with what you’d get on the most competitive home buyer mortgages on the market – the rates offered tend to be noticeably higher.
Make a budget and figure out what your monthly expenses are. You can use that information in two ways. First, you’ll be able to calculate a rough target sum to save. Multiply your monthly expenses by your target number of retirement years to find this figure. Second, you can use your budget to plan for how much money you’ll need to save now in order to retire later.
Incentivize While saving for retirement is a long-term goal, try setting more immediate financial goals, like paying back student or credit card debt. Not only will taking those actions put you in a better place moving forward, but you’ll train yourself to manage your money well when you enjoy the reward of meeting of your goal. In this way, you’ll use a basic tenet of learning psychology – operant conditioning – to change your own behaviour.
To reduce your overall spending, try purchasing high-quality items that will last longer and wear out more slowly. Doing so will cut back on the number of times you have to buy the same item, which means more money in your pocket to put away for retirement. Any sort of money-saving habit you can establish early will help you contribute to your retirement fund, as long as you’re consciously making the choice to shift the extra dough over to your savings account.
Take the time to seek out retirement resources that will help you understand the realities of taking an early retirement. An abundance of information is available online to help you craft and continually update your financial plan.
Establishing these five money habits will lay the groundwork for you to enjoy the retirement you crave.