Finance Tips for Early Retirement | Matthew Littlemore

 

Since the Great Recession, an increasing number of people have been looking into the concept of early retirement. Less than one percent do so before the age of 50, however, and the average retirement age continues to fall between 62 and 65. Retiring early requires some serious financial planning, and here are some tips that can help make it happen.

Start Early

Those who are interested in retiring early will want to make sure that they start the process early. Starting early provides more time for the power of compounding interest to work its magic. Those who have 20 or 30 years until retirement will see their money turn over several times. On the other hand, those who wait until a decade before they intend to retire might only see their initial investments double once or twice.

Live Frugally

Common sense dictates that spending everything that comes in will not lead to retirement riches. This means that those who want to retire early will want to cut expenses as much as they reasonably can. Every dollar that’s not spent is a dollar that can go into a retirement account.

Invest In Retirement Accounts

Many early retirees are able to amass a large sum of money because they leverage their retirement accounts. Many employers will match employee contributions. Additionally, it’s possible to put off some of the taxes that would otherwise erode a retirement nest egg’s value using tax-advantaged retirement accounts. This defers tax payments until a future time and rate.

Pay Yourself First

Most people pay their bills and then save and invest what’s leftover. These people will find that there’s usually little leftover. Those who retire early follow the advice to pay themselves first, within reason. They save and invest before paying other bills, and if there’s a shortfall, they find a way to fund it creatively.

Look At Side Hustles

Many jobs pay the bare minimum that people need to exist. This can make it hard to save for early retirement. Finding a side hustle or a second job will go toward retirement savings. With the advent of technology, picking up a side hustle has never been easier.

Early retirement is a goal many people have. However, relatively few are able to achieve it. Those who put these recommendations into action are more likely to retire early with a comfortable nest egg.

This article was originally published at https://matthewlittlemore.net/

How to Save Money During a Pandemic

 

Navigating the waters of a pandemic is stressful enough without adding additional money worries to the mix. That being said, finding ways to save money during Covid-19 is likely a necessity for many out there. For those who have some disposable income, this is the perfect opportunity to put aside funds for when the economy inevitably bounces back. Whether you’re telecommuting from home or still coming to work, here are a few ways to ensure you’re making every dollar count during these questionable economic times.

Contact Your Car Insurance Company

Most people have drastically reduced the amount of time spent driving during this pandemic. If you’re no longer using your car to commute to work, be sure to communicate this to your insurance company, as your vehicle’s insurance rates are often calculated with your commute as a factor. Even if you are still driving to work, you may find that there is less driving overall taking place. Putting lower mileage on your vehicle means there’s no reason for you to pay the same amount on insurance. 

Make the Most Out of Your Groceries

Being stuck inside can make it tempting to order meals and groceries more than ever. However, even being a premium user of food and grocery delivery apps can quickly stack up with tips and delivery fees. Unless you are an immunocompromised individual, you might consider safely planning out physical trips to the grocery store instead. While you should still consider limiting your trips, cooking at home can be a great way to save money and develop your culinary skills.

Consider Clearing Out Your Old Things

If you’ve been staying home, it’s likely you’ve attempted to reorganize your space and discovered how many things you’re no longer using. This can be a great time to say goodbye to unwanted clutter and make a few extra bucks in the process. Online marketplaces can be a great and safe way to sell your unused items. Consider disinfecting items before shipping them in order to give your buyers additional peace of mind. Many entrepreneurs have emerged as a result of the new world we live in, and have learned to adapt by starting their own craft-based businesses.

This article was originally published at https://matthewlittlemore.net/

Expenses That Can Eat into Your Retirement Savings

It is frustrating when you spend your life adding to your retirement savings only to watch it slowly drain away. Retirement for most retirees usually means living on a fixed income. Nevertheless, you should not be worried if you are spending within reason. But there are expenses that may threaten your financial well-being in retirement. The following are some costs to monitor.

The first expense to watch is your debt. Debt is another monthly bill to worry about and can get worse when you make the minimum payment. During your working years, make this debt a priority. Minimize this debt by paying off your debt starting with the debt having the highest interest rate. You can also allocate a percentage of any bonuses you receive towards paying this debt.

A second expense that can eat into your retirement savings is health care costs. This can be true even if you have insurance. For example, your insurance could have high deductibles, or you could need care your insurance does not cover. Retirement planning may have taken these contingencies into account, but if not, health care expenses could “eat up” much of your retirement savings.

A third expense that can eat into your retirement savings is care-giving. Sometimes, retirees have living parents who deplete their retirement savings and rely on their children. Some retirees have their adult children back home with them because of the child’s mismanaged money or rotten luck. Remember, you cannot control how other people (including children or parents) manage their money. However, you can have a say in the financial support you provide them. Adult children can pay rent to you and help reduce the financial burden on you in other ways.

A fourth expense that can eat into retirement savings is taxes. You can minimize your taxes by being aware of your contributions and withdrawals from your retirement accounts. These retirement accounts reduce taxable income when you contribute to them but require tax payment when you withdraw. During retirement, know your tax bracket and monitor how much you withdraw from which type of investment account. You can have money in different accounts, but the account that will give you a larger tax break should be your favorite option.

This article was originally published on MatthewLittlemore.net

Tips To Help College Budget

College students are going to have a lot of things to consider when they are budgeting. Most of them are going to need budgeting assistance because they have never been in charge of their own money. Fortunately, there are some easy tips to help the college students that are trying to budget.

Eat Cheap

It is important to look at any deals that are available when it comes to budgeting. It is important to take account of how much money is needed for morning, afternoon and evening meals. Students need to learn how to clip coupons and look for ways to prepare meals. Students that are going out to eat on a regular basis will find themselves struggling to stay within their budget. It is okay to eat out occasionally, but very few college students can sustain a budget if they don’t make any effort to learn to cook.

Entertainment That is Not Really Needed

It is a good idea to look at the options for free entertainment. It is hard to fathom, but there are quick a few apps that providing free movies and television shows. This means that there is no need to spend money on some of the premium apps that require a monthly subscription. The same thing goes with music. There is no need to buy streaming services when many of these services are free.

Free Entertainment On Campus

The great thing about college students is that there is a large amount of free entertainment on the campus. Students that pay activity fees are already paying for the home games during basketball and football season. This means that there are opportunities to be entertained on campus without spending excessive amounts of money.

Buy Used Text Books

The ability to buy used textbooks can also be a great money saver. There are great discounts for those that are interested in ordering textbooks online. Others may even rent textbooks that can be returned. This can help college students save lots of money.

Split The Cost

If there is anything that college students can do to split the cost they should do this. They should look for ways to share books, clothes, software and food expenses with roommates.

This article was originally published on MatthewLittlemore.net