Learning to Live on One Income So You Can Enjoy an Early Retirement

by Samantha Bennet on February 9, 2013

Who would not like the idea of getting an early retirement? You surely would like to explore many things by the time you get to your 50s or 60s.

It would certainly be better if you have more money to spend because time would not be a problem by then anymore. How about spending more quality time with your loved ones or finally executing a business idea that you have always been planning to do?

Logically, early retirement may not be possible if you would not exert more effort on your younger years to earn and save more. In general, it would be more possible if you would start saving for this goal while you are younger, probably in your 20s.

If you are in your 30s or 40s, you may have to take greater efforts to boost your retirement savings. Generating extra income can be ideal but if it would be too difficult, you may have to make both ends meet and learn to live on just one income.

You and your spouse should start assessing the inflow and outflow of your combined income. If your conjugal revenue is just enough to cover your household expenses, you should review your spending habits and realize how you can save much to live only on one of your two incomes.

Here are tips that can be of help.

  • Slash your household expenses. Make a list of all expenditures in a month. A couple who makes dual income should learn to trim costs so that only one income would cover monthly bills and the other goes to an early retirement savings or fund. A single individual should save half of his/her monthly take-home pay. The remaining amount may already be enough to spend for the necessities, for recreation, and for emergency expenses.

 

  • Establish a realistic monthly budget and stick to it. It is advisable to allocate an amount as allowance. This should be spent on larger goals. To avoid the feeling of being deprived, have even a small amount for recreational activities. You may even enjoy eating out at your favorite restaurants at least once or twice a month.

 

  • Always find the best deals when buying significant items. For instance, if you are buying a new TV set, take at least a whole day to find and decide which model or brand to buy based on costs. If you don’t need an item, it is better not to buy it. Make plans to buy a costly gadget or equipment and wait for a few months until its tag prices decline before you buy.

 

  • Invest a portion of your money in any tool or business with more certain and higher returns. You should not keep all of your savings idle on a bank deposit, which generate minimal interest rates. How about putting some of your retirement savings on equities, properties, or small businesses? Observe good financial and investment management and you could possibly make your money grow exponentially.

 

Do you have other ideas on how you can effectively save for your planned early retirement? Leave your comments below.

Next read: Which is best to rebuild credit- prepaid or secured credit cards?

Courtesy of CreditCardShoppe.com

 

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