Retiring comfortably in the current financial climate might seem like no easy feat, particularly if you’re hoping to retire early. But it can be done, if you keep your planning in-mind and you are extra frugal. In this article we look at some top tips for saving towards early retirement.

When we think of saving, we immediately go to the process if putting money to one side each month and into a pot for later use. However, our first tip looks at things a little differently: Keep watch on what you spend, not just on what you put to one side. Saving money doesn’t mean you have to be a hugely high earner – it simply means that you should be a cautious spender. We don’t mean that you need to live on the breadline in order to save as much as possible, but it is worth making some sacrifices now in order to reap the rewards later. For example, if you are left (after bills etc) with say, £300 each month for luxuries such as nights out, trips abroad or city breaks, new clothes or whatever it is that you would like to spend your hard-earned money on, be restrictive. You can still allow yourself a shopping trip but keep it low budget – you can still save for a trip away, but look for cheap, last minute deals. Tell yourself that out of that £300, you only have £100 to spend. But don’t focus on the amount you’re saving so much as what you’re spending and how you can be smarter with the choices you’re making.

Make an investment. Investments need some consideration and we would advise that you do your homework before you decide on what your investment should be. For example, are you investing in an antique or property? What are the risks, and how do they weigh up against the rewards? Take your time if you’re looking at utilising an investment to help you earn – it is not something to be rushed. Look at the current markets at home and abroad, especially if you’re considering a property investment. You can even think of a ‘paying in’ scheme as an investment, if you are more comfortable. But for this, we would probably recommend wither a savings account, or our third tip…

Pay into a private pension. If you’re employed and earning over £10,000 annually, you will already be enrolled in a workplace pension scheme. But if you’re looking for additional ways to save for your retirement, and you have the means to do so – one way to look ahead at the possibility of early retirement is to put into a private pension. A private pension plan is also a must if you are self-employed. The way to think about it is to treat it like a monthly business expense: you are ‘spending’ now so that you can take advantage of the investment later on.

Finally, take advantages of the little extras that will put you in a better financial position – this can include anything from loyalty cards, excellent interest rates on savings accounts, and banking rewards to taking care of your property and creating ‘add-ons’ while you enjoy the benefits of living there. For example, adding an extension or conversion to your home may be a great way to invest, as it offers you a chance of environment, a new project and a new space in the home, while also adding value to your property – which will come in handy when you look to retire and perhaps sell up.

The most important thing with all of this is to take the time to plan: watch your spending, remain frugal and modest, and let the savings take care of themselves.

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