For many of us, retirement seems a million miles away. And, with more and more companies handing retirement responsibilities into the hands of their employees, many of us are wondering: how on earth do I retire with more than my parents?
Fortunately, it is possible to retire with more money than your parents-if you have a financial plan that you work ruthlessly.
Let’s be clear, your parents may have a completely different vision about retirement than you do. When conceptualizing your own retirement, you need to be clear on what retirement will look like for you and an understanding of what your monthly expenses will entail during the duration of your retirement.
Are you just dreaming about golfing or fishing in your old age?
Retirement in 2017 has become somewhat sexy and there are a ton of different ways to create the perfect retirement that reflects both lifestyle and your future finances.
You may want to embrace FIRE (financial independence retire early) and retire in your thirties. Your retirement may be on a boat sailing around the Caribbean. Or, you may want to live in a large house in your hometown.
Own your vision for retirement and then begin working a plan to move you towards that vision.
Look for ways to save more.
For those of you who are younger and are currently in the process of deciding where to go to college, double down on going local. Local tuition is always cheaper than out of state. In fact, if you’re still in high school, earn college credits
In fact, if you’re still in high school, earn college credits at a discounted rate before going to college so that you can decrease your time in school. With the money that you save on tuition, begin saving for the future.
Negotiate every financial expenditure with the idea of investing your savings for the future. Keep your housing costs as low as possible and work hard on keeping your overall monthly and yearly operating budget as low as possible.
Currently, I have a budget of $2500 for both my personal and business expenses and I’m aggressively working hard to lower that number. It took awhile to lower my expenses, but once I did, I’ve been able to reallocate my money towards financial choices that will serve me well in the future.
I also embrace the “keep it small” philosophy. You’ve probably heard the buzzword “minimalism” and, in my view, keeping it small and simple is basically the same thing without the snazzy black t-shirts that minimalists always seem to wear.
I’ll be honest and say that I have no interest in super sizing my home and having a larger mortgage. Keep your housing and car expenses low so that you can invest your savings for your future.
Finally, don’t drive away your savings by purchasing too much car for your needs. In 2016, CNBC reported that the average monthly car loan payment was $503. Imagine if you paid cash for a used car and used the money that you saved on transportation costs towards retirement savings?
You also need to earn more.
Look at every opportunity to earn more money and to save money on every financial transaction you find yourself in.
Earn more money. Let’s be frank, financial conversations seem to always cover: paying off debt, spending less, and changing your habits, but never seem to cover earning more money.
As you look at your career and your earning capability, focus on careers that start with higher earning potential.
Don’t mind dealing with blood and can get scholarships? Think about becoming a nurse or doctor. Do you love teeth? But, you don’t want to take on student loans to become a dentist? Become a dental hygienist instead. Do you love science and computers? Become an engineer of a highly specialized field or a computer coding badass.
Embrace a financial strategy that includes finding employment with an organization that matches your retirement savings. Increase your savings as you earn more (while being mindful of savings limits). Don’t let your lifestyle costs creep up, just bank your earnings so that you save more over time.
If you want to retire with more money than your parents, keep your eye constantly on your ultimate retirement savings goal and work your plan unapologetically.
Start a business. One of the best things about becoming an entrepreneur is access to retirement savings tools that enable consumers to save substantially more than for someone who is employed.
It’s not too late.
And, for those of you who started late, all of this advice still is applicable to you. But, in all honesty, you’ll have to double your efforts and approach your long-term retirement goals with a single-minded focus and tenacity that someone who started early won’t have to deal with.
Have you begun mapping out your retirement plan? Are there any helpful methods you could share? Please join us in #Adulting Facebook community.