Live Frugal And Retire Early
Have you grown weary of the nine-to-five grind? Are your Sunday nights plagued by nightmares of the long week of drudgery ahead? Would you rather have your fingernails yanked out one-by-one while listening a medley of Justin Bieber tracks than spend one more minute at work? It sounds like someone is ready to retire–and the sooner the better.
When it comes to retirement preparation, you have partaken in many of the usual steps. You’re contributing to your 401K. You’ve met with a financial advisor. And, you’ve even looked into annuities. But there is likely one thing you’ve overlooked. The more frugally you live, the earlier you will be able to retire.
That’s right. A penny saved truly is a penny earned. And every cent you earn can be used to finance your retirement.
The Fans of Frugality
Thomas J. Stanley, the author of multiple books including The Millionaire Next Door, has long espoused the wisdom of living below one’s financial means. In fact, he has frequently stated that many people who live in lavish homes and drive luxury cars do not actually possess much wealth, while many who do have a great deal of wealth live do not live in upscale neighborhoods. Instead, they are frugal.
Mr. Money Mustache, a 39-year-old man who retired at the mere age of thirty and operates the extremely popular blog by the same name, also adheres to a policy of frugality. In MarketWatch‘s “How to Retire Early–35 Years Early,” he states that before making purchases, he asks himself if this is the best possible use for this chunk of money, if my goal is creating lifelong happiness for myself? If you understand what it means to be a happy person, you realize that buying more stuff has nothing to do with happiness.
After all, look at your own circumstances. Your stuff in no way makes up for your dissatisfaction with the status quo. And it in no way will contribute to your ability to retire early.
The Frugal Mind
In order to adopt a frugal lifestyle, you first need to change how you think. Frugal people, for example, have mastered the art of distinguishing between a “want” and a “need.” They evaluate purchases based on whether or not they truly need something. They are keenly aware that they need footwear, but they also know that said footwear need not be by Jimmy Choo.
Instead of thinking in terms of the amount of money spent, think about how long it takes you to earn it. If you make $15 per hour, it may take you an entire week of toil to pay for that single Armani jacket. Suddenly the jacket you already own doesn’t look so bad, does it?
In the Huffington Post‘s “7 Ways to Trick Yourself into Spending Less,” MoneyNing.com finance blogger, Emily Guy Birken, recommends keeping your spending in line by converting the cost of a proposed purchase into an item of units you know well–and, preferably, value–such as ramen noodles. Birken advises that when you realize a $50 shirt is equal to 200 packages of ramen noodles, you may rethink your willingness to spend.
The Art of Frugality
While half the fun of leading a frugal life is coming up with new and innovative ways to save money, cost-cutting experts have shared several of their favorite penny-pinching techniques.
- Alternate Transportation: According to Bankrate’s “6 Extreme Ways to go Frugal and Save,” Francine Jay, author of Frugillionaire: 500 Ways to Live Richly and Save a Fortune, recommends walking, biking, or taking public transit, and getting rid of your car completely. This will save a fortune in gas, insurance, upkeep and repairs, licensing, and parking fees. Plus, with all that walking and cycling, you will be able to enjoy a much healthier retirement.
- Purchase Groceries with Prudence: Purchasing with prudence–the characteristic, not “Prudence,” the weird old lady down the street–takes practice. But, once you get the hang of it, you will be glad you did. Become an avid coupon-redeemer, buy generic whenever possible, and when items you usually use go on sale, stock up. And never go shopping when you are hungry enough to eat deviled skunk butt.
- Visit Your Wallet Less: A frugal person has a much less “close and personal” relationship with their wallet than the spendthrift does. If you truly want to retire earlier than planned, you will need to seriously reduce your expenditures. Why spend money on books and magazines when you can borrow them for free at the library? Who needs an expensive gym membership when you have access to bike trails, jogging paths, or a treadmill in your own home? Why pay a lawn maintenance company when you can mow your grass yourself–and get exercise at the same time? When you reframe your thinking, you will likely discover that many of the things you formerly deemed necessities aren’t necessary at all.
- Rethink Your Address: As Thomas J. Stanley has previously stated, many truly affluent people live in much more modest homes than you would expect. Is your home bigger than you actually need? If so, you may wish to consider downsizing. Not only will you be able to make a tidy profit, but you will also save money on your insurance premiums, heating costs, and upkeep. And you’ll spend much less of your retirement time cleaning.
Imagine that you are no longer jolted into wakefulness by the buzz of an alarm each morning. You are free to pursue your hobbies, read a favorite author, or simply do nothing at all. And weekdays and weekends are all equally pleasing. Frugality means focusing on what will truly make you happy. And putting your money back in your wallet.
Now that you have mastered the art of frugality, you will want to check out “How Much Do I Need to Retire? Five Retirement Planning Tricks to Make the Most of What You Have” for more great advice.
About Author: Kimberley Laws is a freelance writer and avid blogger who dreams of a retirement life filled with strawberry daiquiris, salt water pools, and puppets. You can follow her at The Embiggens Project, Pinterest, Facebook, andGoogle+.