Unless you are lucky enough to absolutely love your job and can’t even imagine not being able to go to it every day, you probably dream of taking an early retirement.

Without advance planning and work, it will be hard to achieve that goal. But you can definitely get there by applying a few strategies now.

Here are the top 6 early retirement tips that you can start working on today to get you closer to your early retirement dream!

Get Rid of Your Bad Debt

Nothing can derail a great early retirement plan like bad debt, so eliminating this is the first tip you need to look at. All debt is not the same, and there is good debt that is healthy at certain levels.Credit Card Debt

But bad debt typically has high interest rates and can snowball very fast into payments that are difficult to manage.

One common example of bad debt is credit card debt. I know how easy it is to use that credit card and have been in a position where I had to pull myself out of substantial debt from misusing it.

If you are having problems getting ahead or making your debt payments, the great news is that there is wonderful help out there.

Many people find it hard to reach out for the help that is available. But getting you and your family back on stable financial footing is well worth it!

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Take Advantage of All Tax Free Savings Plans Possible

If you have access to a 401k plan at work, you’ll want to take full advantage of it. Most companies that offer one also contribute a matching amount up to a certain percentage or dollar amount.

Not taking advantage of the matching funds is literally leaving free money on the table!401k

For example, say you make $50,000 a year and your employer matches your contributions up to 6% of your income.

If you contribute the 6%, that will be $3,000 over the course of a year, and your employer will contribute another $3,000.

If you choose not to use this program, you are giving up the free $3,000 every year that could go to your retirement as well as the interest and gains from those funds.

Investing in an S&P 500 index fund and assuming the historical 7% rate of return, in 30 years that $3,000 yearly free money could turn into $294,775!

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Another advantage is that your contributions are tax free, meaning that your take home pay won’t be reduced by the full amount of your contribution.

If you are paid biweekly, contributing $3,000 would take out about $115.38 from your paycheck. But since taxes will not be taken out on that amount, your take home pay would only be reduced by about $98.08 assuming a 15% tax bracket.

If you don’t have a 401k available to you, my best advice is to pay off that bad debt first! Then open a tax free IRA for both you and your spouse, if you have one, and max those out.

After that, open a Roth IRA for both of you and put as much into those as you can.

Roth IRAs give you a different tax advantage from traditional IRAs. You use after tax dollars for your contributions, but all the interest and gains will not be taxed when you take them out.

This is hugely beneficial to you during retirement when you don’t have to pay income taxes when using those funds.

How much will you need to retire?  Here’s a great calculator that you can use to determine what age you can retire based upon the factors you insert:

Build Your Early
Retirement Age Calculator

Minimize Your Expenses

The 2 steps above will be much more difficult without making an effort to minimize your expenses. If your goal is to retire early, you need to set the priorities that will make every dollar count toward achieving that goal!

Now I’m not talking about making the kind of sacrifices that means you have to give up every enjoyment in life.

What I’m talking about is prioritizing your expenses to ensure they are adding value to your life in relation to your goal of early retirement. Here are some examples:

~ Car payments–I hear all the time, “You’re always going to have a car payment, so I may as well trade toLarge car payment a new one every few years!”

No, it’s a choice to always have a large car payment, just like I once did.

A car is simply transportation to get you from one place to another, and your needs are how well it fits your family and how expensive it is to drive and maintain.

People who successfully retire early don’t see value in a car that is more than they need.

Once I changed my way of thinking, it amazed me by how much money I could save every month.

A $35,000 new car will cost you about $650 a month for 5 years. But you could look for that same car in great shape with low miles that’s already 5 years old.

With the huge amount of depreciation in value already figured in, you could buy it for around $20,000 at $450 a month for 4 years. That’s a savings of $17,400!

Not only will you save in buying costs, but with regular maintenance and good upkeep, your car can last well past the time it’s paid off.

This gives you time to put that car payment in the bank and build up a great savings for when you need to replace it!

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~ House payment–How much house do you need? How willing are you to refurbish a home? How much are you willing to sacrifice to pay it off by your early retirement date?

These are just a few of the questions you need to ask yourself.Large house payment  The decisions you make about your housing costs need to be made in relation to achieving your early retirement goal.

You may love that completely remodeled 3,000 sq. ft. house with the gourmet kitchen, a hot tub, and 5 bedrooms.

But if the 2,000 sq. ft. house  is on the market that needs some remodeling, has low property taxes, and a price that will enable you to pay it off earlier, are you willing to sacrifice and buy that instead?

This is the mindset you need to have when evaluating your housing costs.

~ Monthly bills–Any way that you can reduce your monthly payments for things like utilities, cell phone bill, insurance, etc., will free up cash for your retirement goal.

You can research different cell phone plans and insurance companies and shop around for the best rates. Even being mindful of small things like adjusting your thermostat and turning off lights can add up over time.

About 8 months ago, we switched to an hourly pricing program with our electricity provider because it was supposed to be more economical. Since then, we’ve saved an average of 20% on our electrical bill each month!

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Develop An Additional Stream of Income

Up until now I’ve talked about how to reach your goals with the money you have coming in now. But no matter how much you tighten your belt, there are times when you can only stretch your dollars so far!Develop a side hustle

So an option that you may want to consider is developing another source of income.

That could be a part-time job, or better yet, a side hustle that lets you be in control of how much money you can make and how much time you can devote to it.

If you’ve never heard of a side hustle, check out my blog post, What Is A Side Hustle? [Why You Need To Start One!]

I started blogging and affiliate marketing as my side hustle awhile back with a goal to quit my full time job and be home with my family more.

I’ve been able to retire from my part-time job, and we are well on track for my husband to retire many years before his full retirement date.

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Pay Yourself First

Pay yourself firstPay yourself first can be a misunderstood concept. When I first talked about it with my 16 year old daughter, she got the impression that you spend your money on what you want first, then pay your bills and savings with what’s left over.

Needless to say, she got a rude awakening!

Pay yourself first means that you set your savings up as a monthly bill, and pay yourself that amount into your savings account each and every pay day first.

Then you pay all of your household bills and monthly payments that are due, and THEN you spent what’s left over on the things you want.

You need the mindset that your financial security, now and in the future, is a priority like any other financial obligation.

Once you do that, you will be surprised how much easier it will be to start recognizing the things that don’t add real value to your life!

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Create a Written Plan to Reach Your Goals

You can think about a goal a hundred times, but there’s something about actually putting it down on a piece of paper that makes it seem more important.

A plan and a goal make you more accountable when it’s staring you in the eye–which is exactly why you need to write one!

Your plan can be set up any way that works for you, but you need to be specific with what you want toCreate a written plan achieve and the steps you will take to accomplish it.

Here’s a couple of examples:

~ Instead of saying, “I want to start putting more into savings each month”, you say, “I will decrease my grocery bill by $50 each paycheck and add that money to our savings account.”

~ Instead of saying, “I will start contributing more to my 401k”, you say, “I will increase my 401k contributions by 1% each time I receive a raise in salary until I am maxed out.”

Each time you create a specific goal, you become more accountable and you can check your progress and see your achievements.

Not only is it easier to stay on track, you will get the sense of pride and accomplishment every time you see your success!

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You Can Start Your Plan Today!

Retirement can seem very far away. But if you take these 6 early retirement tips and apply them to create financial security for you and your family, anyone can achieve their goal!

Do you have an early retirement plan? Have you created your goals? Do you have a plan for eliminating your bad debt? Let us know your tips in the comments below!

I'm Janelle, a wife, a mother, and a grandmother of 5 angels (most of the time)! I started BuildYourEarlyRetirement.com as a way to show how anyone can become financially independent and retire early. As I build out this site, I hope you'll comment and share your experiences as well. Good luck in all your endeavors, and may your success start now!