Get a Handle on Your Current Spending
Most of us don’t really know where our money goes- we just know that it does! One moment it’s there, and then the next you’re wondering what you spent it all on.
By tracking your spending now you’ll be able to to figure out two things. First, you’ll know exactly where to cut expenses early on, before you retire in order to save more. Secondly, as we mentioned before, you’ll know exactly what expenses won’t be necessary in the future.
But this has to be done consistently, month by month. You can either do this the old-fashioned way with a spreadsheet, or you can use finance tracking services, such as Mint.
Cut Expenses Now
Now that you have your current spending on hand, you can look at where you can start cutting. Get your metaphorical scissors and get ready to snip!
This is where you have to divide your plan into short or long term sacrifices. Now, these will differ from person to person. For example, in the short term you might decide not to go on vacation this year, but you’ll definitely go next year. For the long term, you may decide to cut down dining out every day.
Look at the subscriptions you’re paying for- which one of them can you live without? Expensive entertainment could be replaced by affordable options, and so on and so forth.
You also have to get in the habit of shopping around, especially when it comes to larger expenses. Here, we’re talking about car insurance, cell phone plans, home repairs, the likes.