Retire Early – Tips on Budgeting Part One
Retire Early - Tips on Budgeting
Everyone has hopes to retire early. Surprisingly there are different costs you need to consider after your working days are done. The beauty with retirement is that you can actually spend less money and do more but only if you have taken the right course of action over the years. So how can you retire early? Is there some magic formula that only a few people know? This article will discuss how to manage money and several tips on budgeting so you can be one of the lucky few to make the most of your life after you call it quits.
Retirement By The Numbers:
Let’s assume that you will be 60 when you decide to receive the golden handshake and sail off into the sunset. If you have taken the right path, you have saved enough over the years to make that happen. The real question is; what is the amount of money you are going to need to retire comfortably? That all depends on what you have planned. If your ideal situation is to spend your time baking cookies, doing charity work and spending time with your grand children than your expenses will be vastly different from someone who hopes to buy a boat and sail around the world for 15 years. Either option sounds incredible. The wonderful thing is you have the ability at this very moment to save as much or as little as you want by learning all of the tips on budgeting you can. It simply means you have to know how to manage money now.
How Much Is Enough:
As I stated earlier it all depends on your plans but lets start at the low end of the totem pole. Hopefully by age 60 you are mortgage and relatively debt free and have limited expenses.
Monthly Break Down:
Utilities/Home Taxes………….. $800
Groceries………………………. $500
Car Insurance…………………. $125
Home Insurance………………. $ 75
T.V/Phone/Internet…………… $150
MISC………………………….. $750
Travel…………………………. $400
Car…………………………….. $200
MONTHLY TOTAL…………. $3000
YEARLY TOTAL…………. $36,000
To quickly break down this budget your basic costs of living are totally covered. You will be able to afford two all inclusive vacations each year that would cost $2500 each. The last time I checked you can go away to a 5 star resort in Aruba $1500. Not bad.
So, assuming you are able to live in health until you are 80 you will need 20 years at $36,000 saved up. I’m going to round up this total to $40,000 per year to cover any unforeseen expenses. This makes a total amount of $800,000 in liquid assets for you and your spouse. You might as yourself if you know how to manage money to make this possible.
In my next post I will go through how you can actually make this happen and it’s a lot more easy than you might think. Please check out more of my blog to receive the free E-Book, free budget spreadsheet, other tips on budgeting, free calculators and links to various tools. We also have a few leaked videos to help with your finances.
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Filed under: Budgeting Tips
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I agreed on that that we should do some investment to secure our retirement time. The way you have presented the story is really very effective and helps in do some planing. thanks
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Hey Conrad,
Retiring early is actually every mans wish, yet few make it on time. Thanks for this information, i will try follow the monthly breakdown plan.
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Great article. The key is to make sacrifices now. Without some sacrifice you will not be able to retire early. A lot of folks make a lot of money and still live above their means, leaving no room for retirement savings. Sacrifice, sacrifice and more sacrifice. Save, save, save every chance you get.
Saving money and not buying unnecessary goodies is definitely a way to surefire your way to an early retirement. Coupons are also a good smart way to save money. More saved money = earlier retirement.
good article. it is never too late to start saving. I look back and wish I had started sooner. Now I am playing catch up.
Thanks
Marty
Good that i saw this article. I am a person that do not look at the future. I even did not think about my retirement. Seems your blog is an eye opener to me and made me realize I have to decide something good now for my future.
It’s better to play a little catch up than to never have played the retirement game at all! Thanks for the comment!
It’s always important to look towards the future when dealing with your retirement! I’m glad to see we’ve helped a little! Cheers!
Very interesting article. Since I have already been retired for about 4 years, and now live in Brazil just to make ends meet. Everyone reading this post should really heed what you are saying. Well done.
Great article..
some great tips, thanks for sharing. I would love to retire early.