5 Expenses I Wish I Had Cut Sooner
©Shutterstock.com
Retiring often means saying goodbye to the daily 9-to-5 grind and hello to living out your golden years. The average retirement age is 65 for men and 62 for women, according to the most recent data from the Center for Retirement Research at Boston College. However, retiring at any age requires a lot of financial planning.
Explore More: Early Retirement: Here’s How Much Savings Is Needed To Retire by 40 in Every State
Find Out: The Surprising Way You Can Get Guaranteed Retirement Income for Life
Here are some insights on the expenses that might be holding your retirement savings back.
Wealthy people know the best money secrets. Learn how to copy them.
Dining Out
For Maxime Bouillon, CEO of Archie, dining out was a major contributor to a slow-growing retirement fund. While you don’t need to live like a hermit to retire early, cutting back on extraneous spending and being intentional with splurges is key to beefing up your savings.
“Regularly eating at restaurants and ordering takeout had an impact on my retirement savings,” Bouillon said. “Although it was fun at the time, these costs accumulated rapidly, often exceeding the expenses of meals. If I had dined out less, I could have put hundreds or even thousands of dollars each year into my retirement account. On average, American families spend $3,459 annually on dining out, which could add up to an amount over years if invested for retirement purposes.”
Cut out the midnight DoorDash orders and save the food spurges for birthday dinners and special occasions with family and friends. That way, you can prioritize spending on events that create long-lasting memories.
Read Next: 4 Reasons Retired Women Need More Money Than Men — And What To Do About it
The dopamine hit from impulse spending is real, and saying no to great deals, small purchases and short-term happiness isn’t easy. But these little splurges can seriously derail your early retirement plans.
“Impulse buys and unnecessary shopping sprees really took a toll on my finances,” Bouillon said. “The fleeting joy of acquiring things usually ended up causing lasting challenges. Considering that 68% of Americans confess to impulse buying, it’s evident that this is a problem.”
If excessive shopping is your crutch, utilizing a budgeting app can also help you track where your money is going and set limits on impulse shopping. This way, you can cut back on excessive buys without depriving yourself of fun purchases completely.
High-Interest Debt
Perhaps the most significant obstacle that could crush your dreams of retirement is debt.
Story continues
“Having debt with interest, especially on credit cards, posed a major hurdle in growing my retirement savings,” Bouillon said. “Given the interest rates of around 16% on credit cards, the burden of this debt escalates rapidly, making it tough to set aside money for retirement.”
If you’re holding on to any high interest debt, paying it off as soon as possible will have your retirement and future self thanking you.
Unused Subscriptions
It’s not easy to cut the cord on your favorite subscription service. From Netflix, Hulu and Amazon Prime to your local gym membership, staying on top of which subscriptions you’re actually using is crucial for your financial well-being.
“I was quite taken aback when I realized the number of subscriptions I was paying for but never using,” Bouillon said. “These little monthly fees seemed insignificant at first. They accumulated over time, slowly eating into my savings. The statistic that 20% of Americans have subscriptions they don’t use yet still pay for highlights how common this problem is. If I had regularly checked my subscriptions and promptly canceled any services I wasn’t using, I could have saved money for planning my retirement.”
Unnecessary Car Expenses
The phrase “Keeping up with the Joneses” has never been more accurate when it comes to staying on top of vehicle trends. While the initial cost of a car is already astronomical, not being financially savvy with all the other car maintenance fees can seriously impact your retirement plans.
“Expenses related to owning a car, such as upgrades, costly maintenance and expensive insurance fees presented an opportunity for me to save,” Bouillon said.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: I’m Planning My Retirement: 5 Expenses I Wish I Had Cut Sooner
