3 Poor Habits That Quietly Delay Retiring in Your 50s
For many, retirement goals might seem unrealistic, especially if you hope to retire in your 50s. However, you’d be surprised how many unnecessary expenses you incur each month that can really drain your finances.
“Take a quick values assessment to identify what really matters to you now and for your future. This will be different for everyone,” said Jessi Chadd, certified financial planner (CFP), certified financial transitionist (CeFT) and chief wealth officer at Aspyre Wealth Partners. “Then, look through your 'values lens' when deciding if an expense is worth it or not. If it isn’t adding any value to your life, then free up that money to invest in your early retirement.”
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In this article, we’ll cover some common expenses you should eliminate now if you want to retire in your 50s.
1. Maintaining High-Interest Debt
When you take out credit cards, student loans or personal loans, a pretty high interest rate is likely attached to it. This means you’re paying a percentage of interest on your balance every month. For example, if you have a credit card with a $10,000 balance and have a 22% interest rate, you’ll end up paying $2,200 in interest over one year.
These payments can really impact your budget, so you’ll want to get rid of these expenses first. Consider increasing the amount you pay each month to eliminate debt sooner, contacting your creditors to see if you can negotiate a lower interest rate, or even consolidating debt to a card with a lower to no interest rate.
2. Paying for Unused Memberships and Subscriptions
Everything has turned into a subscription these days, with some of the most popular ones including streaming services, gym memberships and food delivery services. While some you may use often, there are likely others you can scale back on or eliminate from your monthly budget.
Consider reviewing your bank account to figure out what is being charged each month. Once you have a list, you can evaluate which ones no longer serve your lifestyle. While it might not seem like a lot of money, even $10 a month adds up to $120 in a year.
“I suggest eliminating anything on auto-pay,” Chadd said. “This type of spending is practically invisible because the charge is automatically applied to your credit card each month. By removing the convenience of a subscription, you need to decide each month if the expense is still worthwhile.”
3. Unchecked Transportation Costs
Most of us need to use transportation to get to work or run errands, whether by car, public transportation or ride-sharing services. However, these costs can eat into your budget. While you may not be able to cut these expenses completely, there are some easy ways to reduce your costs:
Get rid of your lease and consider buying an inexpensive car to eliminate monthly payments
Consider carpooling to share the costs of gas or ride-sharing services.
Use public transportation, walk or bike when possible
While there are many changes you can make to help make retiring in your 50s a reality, this is a great place to start. By eliminating some of the larger expenses in your budget, you can feel less stressed out about money and be one step closer to your goals.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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