Are you aware that 74% of Americans admit to feeling stressed about their finances? Money is a contentious subject, particularly with concerns such as expensive housing, insufficient savings, elevated interest rates, and increasing debt levels hovering over us. One of the major financial worries many individuals encounter nowadays is figuring out how to save for retirement amidst all this chaos.
To many people, retirement aspirations may appear unattainable, especially if you aim to retire when you are in your 50s. Nevertheless, it may come as a shock to you how many costs you rack up monthly that are not essential and can significantly impact your financial situation. This article will discuss five costs you should remove immediately if you plan on retiring in your 50s.
Jessi Chadd, a certified financial planner (CFP), certified financial transitionist (CeFT), and chief wealth officer at Aspyre Wealth Partners, recommended beginning by eliminating any costs that do not match your fundamental beliefs.
Complete a brief values assessment to determine what is important to you at present and in the long term. “This will vary from person to person,” she stated. Next, consider your values perspective when determining if a cost is justified or not. If it’s not contributing to your life, release that money to use for your early retirement savings.
Additionally, consider these inquiries to determine if early retirement is the right choice for you.
Debt with high interest
When you acquire credit cards, student loans, or personal loans, they typically come with a relatively high interest rate. This indicates that you are accruing interest on your balance each month as a percentage. For instance, having a credit card balance of $10,000 with a 22% interest rate will result in $2,200 of interest being paid over a year.
These payments can greatly affect your finances, meaning you should prioritize eliminating them as they have the most significant impact on your budget. Think about raising your monthly payments to settle the debt faster, reaching out to your creditors for a possible interest rate reduction, or consolidating your debt onto a card with no or lower interest.
Rich individuals are aware of the most effective financial strategies. Learn the skill of duplicating them.
Membership and subscription services
Nowadays, many things have become subscription-based, such as streaming services, gym memberships, and food delivery services. Although you may frequently utilize certain memberships, there are probably others that you can reduce or remove from your monthly expenses. In a recent study, 85.7% of individuals claimed to have at least one paid subscription that they are not using.
Think about checking your bank statement to identify the monthly charges you are paying. After you have compiled a list of your subscriptions and memberships, you can assess which ones are no longer beneficial to your lifestyle. Despite not appearing to be a large sum, $10 per month can accumulate to $120 annually.
Chadd recommended getting rid of anything set up for automatic payment. This involves services for streaming, audiobooks, food subscriptions, and similar options.
She mentioned that this kind of expenditure goes unnoticed as it is automatically billed to your credit card every month. Without the convenience of a subscription, you must assess the value of the expense every month.
Dining at restaurants
Dining out frequently can come with a hefty price tag, as it is commonly known that eating at restaurants can be costly. Instead of dining out and buying coffee, consider preparing meals at home and bringing your own lunch to work. Cooking at home not only saves money but also allows you to have control over your meals, leading to potentially healthier choices.
Many working adults may not have enough time to prepare fresh meals every day. Think about preparing meals in advance for the week so you can easily grab them and take them with you. If you’re not sure where to begin, there are numerous online sources where you can find recipes and grocery lists for your weekly meal preparation.
Cellular Phone Packages
Cell phone plans, whether from AT&T or Sprint, can come with a hefty price tag. It’s a wise decision to explore other plans and ensure you are maximizing the value of your money, especially when unlimited plans can be over $70 per month. Many mobile phone providers also have programs that help make switching to a different carrier inexpensive and convenient.
Determine the kind of plan you possess and the extent to which you utilize it. If you do not utilize all your data, you may want to think about changing to a less expensive plan with a lower data allowance. Switching to a group plan with friends or family could be a more cost-effective option than staying on an individual plan to save money.
Costs associated with moving people or goods from one place to another.
The majority of people require transportation to commute to work or complete tasks, whether it be through driving, taking public transportation, or using ride-sharing services. Nonetheless, these expenses can accumulate rapidly and cut into your finances. Although you may not eliminate these costs entirely, there are simple methods to decrease your expenses.
•Dispose of your leased vehicle and think about purchasing a low-cost car in order to completely eliminate monthly car payments.
•Think about sharing rides with colleagues or people living nearby to divide the expenses of fuel or transportation services.
•Opt for using public transportation or walking or cycling whenever you can to reduce expenses on gas and vehicle upkeep.
Although there are numerous adjustments you can make to facilitate retiring in your 50s, this is an excellent starting point. By cutting back on certain big expenses in your budget, you can reduce financial stress and move closer to retiring in your 50s.
