Retire at the age of 50 with these 10 Money Habits
Having an early retirement plan is an important financial goal for a lot of people. Being able to have enough savings, investments and cash on hand to be able to afford the kind of lifestyle you imagine for yourself and your family is a great goal to have. It could also mean being able to retire early and pursue an alternative career or a different goal without being worried about the amount of money you need to earn every year.
However if in the midst of retirement planning other priorities come in the way, such as mounting debt and overspending, many people fall short of achieving their financial goals. If in case there is some form of financial emergency such as a health emergency, then this goal seems even more unachievable.
But by putting some form of retirement financial planning in place, these goals can be achieved. All you need to do is make a plan and set your life goals - both big and small and start putting a budget in place that will get you closer to those goals.
Here are some retirement planning tips through 10 money habits that will put you on the right path to financial freedom and help you achieve all the dreams you’ve dreamt of.
1. Think about your goals
Always start the thought of retirement planning with one question- What does financial freedom looks like to you? Get specific. Start envisioning what your life goals look like and get as specific as possible. The more specific they are, the more likely you are to achieve them.
Once you know what these goals look like, you can start noting things down like what your lifestyle requires, the amount of money you need to make it possible, and the deadline to have that money in place.
2. Make a budget
Once you have an idea of the bigger number you need to start putting into place for your goals, make a monthly budget. This way you can ensure your savings and regular bills are on track. This will also keep you safe from the temptation to splurge. You might not think much of this, but in the process of retirement planning, this comes into play more than we give it credit for!
3. Always pay off your credit cards in full and don’t accumulate interest
These credit card bills with high interest rates will take you away from building wealth, so make sure you are always paying off your bills in full and not accumulating interest. As much as some tend to ignore this, it is the crux in the importance of retirement planning.
4. Create automatic savings
Create an automatic withdrawal into an emergency fund that you can tap into for any unexpected expenses that arise. If the withdrawal is automatic every month, there will be less temptation to spend that money on other things.
5. Start investing
The GOLDEN RULE for the best results in retirement planning – put your money in a long term investment – atleast some part of it. Why? Compound interest has the power to grow your money exponentially, but allow your investments enough time to achieve meaningful growth. This can only happen if you research on the right long term investment that suits you, and for the lack of too many words- forget about it for a long time!
6. Keep an eye on your credit score
Credit scores have a lot of weight when it comes to asking for loans like home loans and car loans. It determines the rate of interest you will be charged. Therefore ensure that you regularly keep a check on your credit score.
7. Don’t overspend
Try and differentiate between things you need and things you want. This will help you master a good life balance that’ll allow you to enjoy yourself and also save for the future.
8. Take care of your health
Poor health can have long term consequences both personally and financially. So ensure you properly maintain good health, as much as it is within your power- with regular checkups. For a retirement planning in style, make sure you stay in style always, else why are we even planning for an early retirement right?
9. Stay educated
Keep up with financial news so that you can make changes to your investment portfolio accordingly. An early retirement plan will need a fair amount of knowledge and research.
10. Estimate your retirement expenses
A crucial factor to consider in your retirement financial planning if you want to retire early, is to estimate how much you’ll need every month so that you can start saving up for it. While we have mentioned this at the end, this forms a major part of your backward calculations that you would have to do to make the right investment decisions that would help you attain a return on investment as per your current and foreseen standard of living.
AN July 17/22