Most of us daydream about the days we can enjoy our lives without spending hours on end working. Retirement is supposed to be relaxing and enjoying the fruits of your labor, but it doesn’t always come that easy. If you are looking for FIRE (Financial Independence/Retire Early), there are some sacrifices you will need to make to make that dream come true.
1. Lower Your Spending
It sounds obvious that saving money will help you retire early, but many people need to put it to use. It is essential to make a budget and track your spending. You might need to cut some expenses out and put those towards retirement. For example, If you play golf twice a month, you could cut it back to once a month and save that money in your retirement fund.
2. Keep Your Lifestyle in Check
What experts mean by this is to keep your quality of life where you feel most comfortable despite a raise in income. For example, don’t spend $100k on a sports car when you already have a nice, reliable Honda in the garage just because you got a raise at work. You can splurge on small things, like a family vacation or a home upgrade, but throwing away your promotion money is silly and can be put away for that early retirement.
3. Cook at Home
One of the most significant money sucks in our world right now is the convenience of fast food. Services like DoorDash and UberEats have made it so easy to get a convenient meal on the go, but those service fees and tips add up fast. Think about all that money you could save while eating delicious home-cooked meals every day.
4. Ditch the New Tech
Do you really need the newest phone whenever they come out with one? Do you need a bigger TV for the living room? Odds are the answer is no. Keep your devices and expensive tech gadgets for as long as you can. Upgrade every 3 years instead of every year. They only advance a little anyway.
5. Downsize
If you are serious about saving money and retiring early, it might be time to look at where you are living. Are you living in a big house with a lot of upkeep despite it just being you and your spouse? You could downsize into a condo and save money on a smaller mortgage and less maintenance. You could even make a side hustle by renting out your house while you live comfortably in a cozy condo.
6. Stop Competing With Others
You set your goal of financial independence for yourself and your family, not your peers or your friends. So stop comparing your lifestyle to theirs. So what if they went on a lavish vacation? You are sacrificing those material things for a better future. It’s okay to be a little jealous, but remember your goals, and don’t get distracted by how others spend their money.
7. Fear of Missing Out
To tie this in with the last heading, if you want to retire early, and are committed to sacrificing things, you must be okay with missing out on special events. You might have to skip the yearly vacation this year or opt for a cheaper alternative. Friends might have a party at a fancy restaurant, and you might have to sacrifice missing the party because it is not in the budget. Sacrifices are hard but think of the long-term benefits.
8. Ditch the Car
This might only be possible if you live in a walkable city or one with great public transit. Grab a bike and ride to work for some healthy exercise. Walk to the local stores for all of your daily needs. The money saved on gas prices, insurance, and car payments will surely help with the monthly savings. Plus, you will feel closer to your local community and get those added health benefits.
9. Ditch the Credit Cards
One of the most brilliant things you can do to start saving money is to avoid credit cards, financing fees, and debt. All of these will only hinder your hard-earned progress. General rule: if you can’t afford something, do not buy it on credit. Please wait until you feel comfortable buying it with cash. You’ll save a ton on interest fees alone.
10. Designer Brands
I remember when I would only wear name-brand clothing because I thought it made me look cool. I’m so glad I got over that. I am proud to say I shop at discount clothing stores, and my wallet is happy. Consider your goals next time you look at expensive clothing or a name-brand accessory. Is the name on the shirt really worth it?
11. Give Up Your Free Time
Maybe you want to make a little extra a month with a side hustle or a second job. This could be a good move for future wealth, but you also sacrifice your free time. You might not get to watch football all day Sunday because you are working. I would not recommend sacrificing important activities like missing your kid’s Little League game. Still, if you have some free time you are willing to sacrifice, get that side hustle going for some extra income.
12. Cancel Un-Needed Services
Sit down and decide on what services you are paying for that can be canceled. Are you paying extra money for a company to mow the lawn or clean the pool? Look up how to do those chores yourself. You might lose a few hours on the weekend, but you’ll save money and feel pride in maintaining your home.
13. Sell Some of Your Belongings
It’s time to clean out that garage and get rid of some stuff you’ve been holding onto. You may have some old hobbies you don’t plan on doing anymore. I had a friend who had 3 motorcycles just taking up space in his garage. He sold them for some extra cash. Take stock of your own things and sacrifice what you don’t think you’ll need or miss. You will be surprised what you can get rid of.
14. Family Relations
It is essential to understand that you are sacrificing not only your lifestyle but your kids are also sacrificing. It might be hard to explain to a 10-year-old what financial independence is when they are asking for the latest toy. Ensure your kids understand what is happening, especially if they are used to a certain lifestyle. Your goals are important, but ultimately, you are doing this for them, and they should know that they are the number one priority in life.
15. Sacrifice your Goals Sometimes
Lastly, remember that you have sacrificed a lot for your dream of retiring early. The last thing you do not want to sacrifice is your sanity. I have recommended you give a lot of things up, but remember, do those in moderation. Take your family out for a nice dinner every once in a while. Splurge on a weekend getaway with your spouse. Please focus on the little daily sacrifices you can choose to make up for them. We only get one life; make sure you are still finding daily joy, or this journey will make you go crazy.
