Although I used to work like a fiend at my day job, I switched to part time hours a little over a year ago. This past week, I found myself working five of seven days in the office. By Wednesday, I was already begging for Friday, and I felt like I was just phoning it home those last couple of days. I can’t wait until the day when I can pick and choose when I work because we have no debt and living expenses are low. Heck, I might even retire completely and open up a taco stand. I haven’t always had such ambitious dreams. I used to be the authority on money moronism because I have made every mistake on the list. Here are five sure fire ways to make sure you will never retire early.
Don’t Max Out Your Retirement Plan
When I got my first real job, it was after working as a resident for $25,000 a year. I felt pretty posh on my $25K because I had minimal expenses. If I had continued to live on $25K per year or even if I’d increased my living expenses but maxed out my retirement plan, I would have so much more money now. Instead, I invested 3% of my salary to get the company match. I thought I was so smart to take the free money, and I was, but I could have saved much, much more. It would not have hurt at all because I was used to being poor.
Buy Everything on Zero Interest Credit
After I started working, and we bought a house, we felt like we needed the stuff that goes along with it. That’s when we discovered revolving credit. Why on earth would anyone spend a chunk of change all at once when you can finance just about anything at zero percent? We did this with appliances, furniture, mountain bikes, lumber for a new deck, tires, and even a $1500 vacuum cleaner! When you are living to make payments, even at zero percent, you aren’t saving or investing that money. You migh have lots of stuff, like a super cool vacuum, but do you want to work extra years to pay for it?
Get a New Car Every Few Years
When I finished college, I had a perfectly good Honda Accord that ran great and would have lasted for many more years. Instead of being smart and driving my paid off car, I traded it in for a brand new one. Jim did the same, and over the next ten years, we drove 7 different cars and traded them in before ever paying one off. We thought we were smart for not leasing, but in reality, it was like taking out a ten year car note. Learn to love your used car. If it gets you from point A to point B, that’s all that matters.
Always Carry a Credit Card Balance
After the mortgage, student loan payments, zero interest payment, and car payments, there wasn’t lots of money left at the end of the month. There was much more stuff to buy like clothes, vacations, electronics, tools, and a gold throne for your living room (I’m kidding on that one). If you don’t have cash and want to work for the rest of your days, put stuff on the credit card and make the minimum payment every month.
Don’t Ever Use a Budget
Honestly, at the height of our debt, we had no clue how much we owed or were spending. Once we sat down to figure it out, we were stunned to learn that we owed over $30,000 in credit card debt alone! That’s a guarantee for never retiring early, if at all.
Luckily we realized that we could not maintain our current lifestyle and have any hope of retiring before we were too old to enjoy life. I’m pleased to say that we rocked debt repayment and have paid off everything except mortgage debt. I hope to be “retired” or at least financially independent by age 50. It’s not as sexy as 35 or 40, but it just goes to show you that there is hope if you are making some of the mistakes we used to make.
What mistakes have you made in your retirement plans? Are you hoping to retire early? Have you bought anything more stupid than a $1500 vacuum?