As some of you may know, I am working towards what some people call early “extreme retirement.”
Now, please note, this does not mean in any way that I am intending on retiring anytime soon. What this does mean is that it is my intention to get rid of all of my debts, including my mortgage, so that I can have a very minimalistic lifestyle worth of expenses so that I can travel around the world (in between tax seasons of course!)
There is an excellent graph that I found on the Mr. Money Mustache website ( click here for the link) that very easily describes how many additional working years you will need depending on what percentage of income you can put away into your savings for retirement.
An interesting fact that Mr. Money Mustache points out is that if you can reasonably save approximately 50% of your take-home salary, and live on the remaining 50%, you’ll be financially independent in a reasonable number of years ( approximately 16 according to the article).
What would you do if you could retire in 10 years? What about 15? Would you travel the world, stay at home and play with your dogs, maybe start a vegetable garden? What is your definition of success?
I am looking forward to all three!
Another fact that just blew my mind was one of his examples. A couple that by simply cutting cable TV and a few lattes could instantly boost their savings to 15%, allowing them to retire eight years earlier!! Just amazing.
One of my favorite ways to pay attention to how you are spending your little dollars, and us being able to save more money, is to give yourself an allowance. Basically what you do is take out certain dollar amount of cash every month or every two weeks and once that cash is gone that’s it. You don’t have any more to spend. This allows you to budget for what you do and do not want to spend, and not go above your plan.
What is your favorite method for saving money?
