Being more frugal does not necessarily mean cutting back or denying yourself certain luxuries. Most of the time it simply involves the act of tightening up your finances and working down your expenses.
- Could you have your house paid off before you decide to retire? If you’ve got a $1,000 mortgage payment every month, eliminating it would slash $12,000 from your annual needs. That’s $300,000 less to save up in your nest egg!
- Could you drive your car for an extra year or longer? Or buy a used car with cash? If you can afford to avoid a $500 car payment, that will save you an extra $6,000 per year. Again, that’s another $150,000 less you need to save!
- Can you cut down on your household energy costs?
- Get a cheaper cell phone plan?
- Get a better price for your insurance coverage?
- Find a cheaper health care provider?
- Eat for less?
- Drive for less?
- Buy fewer clothes?
- Hold out a little longer to get the latest gadget?
- Scale back your discretionary purchases?
- Negotiate lower rates for you bills?
And many others! Finding creative ways to save money is something that I feel so strongly about, I used it as the central theme for one of my ebooks “Save MORE, Earn MORE”.
What You Should Do
Go back to the retirement plan that we wrote out earlier in Chapter 2 and think about how you could have some more fun for less.
- What would be some of the activities that you get involved in?
- What sorts of things would you find value and enjoy learning?
- What could you be doing to improve your health and psyche?
- How can you give back to yourself, your family, and your community?
Think also about some of the ways that you could strategically cut back on your regular, everyday expenses to try to squeeze more out of your bills.
Put this all together and come up with a new retirement income goal.
Is this a number that you could truly live with?
Finally, talk openly about your plan and everything it entails with your spouse. In order for it to work, the two of you both need to be on board and work together as a team. Be honest with each other and discuss what each person’s vision of the future may look like.
Remember: Similar to Chapter 2, the goal is not to slash your needs and drive this number down as low as it can possibly go. It’s simply to consider if there is any opportunity for optimization that you may not have previously considered.