If you’re ready to retire in 10 years, but your savings account balance reads zero dollars and zero cents, don’t despair.
Believe it or not, it can still be done.
Put together a plan, stay focused on the end goal, and commit to what you need to do to reach your retirement goals in the next decade even if you’re starting with no money in the bank.
Here’s how to start.
Downsize Your Housing Expenses
Cutting down your day-to-day costs will free up some money to put into a retirement savings plan, which is essential when you’re trying to retire in 10 years. Think about whether you need a home that’s as large as the one you’re living in. Can you downsize into a condo or even an apartment? Better yet, can you move in with someone and share the housing expenses for the next few years while you prepare for retirement?
Think about your geography, too. Living in cities like Seattle, New York City, Miami, or Los Angeles will take a toll on what you’re able to save for retirement. Remote work has become more than a trend, so if you can work from anywhere, consider moving to a smaller city with lower housing costs. You’re also likely to save money on transportation, food, utilities, and gas in areas that are not known for their high cost of living.
Learn To Live On Less
Once you’re able to reign in your housing costs, keep going. Take a look at your lifestyle and see where you can make some changes that might give you the money you need to invest in your fast-approaching retirement.
Consider whether you absolutely need your car. The average car payment is between $488 and $644 a month. Putting your entire car payment into a retirement plan can give you some great returns over the next 10 years. When you consider what you’ll save on gas, insurance, and maintenance, the earnings have even more potential. Get on board with public transportation. Hitch a ride with friends and family members when you need to get to the grocery store or work. Unless you’re living in an extremely remote area, living without a car is more possible (and profitable) than you think.
If you’re going out to eat most nights, start cooking at home more often. Forget the food delivery services with their high fees and generous tip suggestions. Shop for clothes at resale stores or consignment boutiques. Sell what you don’t absolutely need.
These tips for managing money will help you spend less on the goods and services that you probably don’t even think about every day. Start paying attention, and bank your money instead of burning through it.
Increase Your Income
Once you’ve managed to control your spending, look for ways to earn more. This might include boldly asking for a raise at work or starting a side gig. Monetize a passion or start freelancing. The gig economy is thriving, and more than 50 percent of workers with a side hustle report doing the work to save money or cover income gaps.
Funnel all of that extra money you earn into the 10-year retirement plan.
How can you be sure you won’t be tempted to turn this extra income into extra spending? By tracking yourself and holding yourself accountable. Download some personal finance software that will help you track income and expenses, see exactly where your money is going, and even give you an opportunity to map out the financial strategy that will have you ready to retire in 10 years.
Invest In Retirement
Adjusting to your new lifestyle might take time. Keep moving forward.
You’ve gone from no savings to a bit of savings, and to reach your retirement goals, you need to make that money work for you. Decide how you’ll invest the money to earn you the highest returns with the least risk over the next decade.
The best strategy will be unique to you. Maybe you’ll buy some real estate or invest in a stock with amazing potential. Set up an Individual Retirement Account (IRA) and max out any retirement plans sponsored by your employer.
You can go from zero savings to a well-funded retirement nest egg in 10 years when you’re disciplined, smart, and flexible.
AUTHOR BIO:
Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author.
He’s been featured on The Consults Corner on TAE Radio, The Writing Biz, What’s Your Story, and more.
He loves to share his personal finance tips and money management wisdom with others on his website, ShawnManaher.com, to help them find financial freedom