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10 Amazing Things You Gain By Spending Less

10 Amazing Things You Gain By Spending Less

Our lives are consumed by constant sense of worth through material items. Do you have the latest TV technology? Do you drive a brand new car?

We are led by our money. We feel that we need money, to buy these material items, in the hope that it will lead us to happiness. I can tell you now, you are wrong. You don’t need money to be happy and spending less will actually relieve you from the stress. Here are 10 amazing things you will gain from spending less.

1. You’ll have a reduced-stress retirement 

Are you in your work pension? Do you ever worry what you are paying in won’t be enough? Do you worry your current spendings will mean a low-budget retirement? But spending less will ease that stress. Remember retirement is about taking it easy, not about appearing wealthy. You have done your years of working hard and saving (for that TV, that car, that house). Now is the time to unwind and to spend time with family and friends. Your stressful days are done.

2. You’ll be free to do what you love

Do you ever feel that there is not enough time for your hobbies? I know I do. I keep thinking, “Oh, I’ll take some photos on my DSLR tonight.” Tonight comes and I become busy working out my finances and worrying about what I need to buy. Next thing I know, it’s nearly bed time and all I want to do is watch TV.

Freeing yourself from money worries will open the door to new possibilities. Stop spending your time thinking of things that you need. You don’t need new surround sound, or to replace those salt and pepper mills (because they don’t match the rest of the kitchen). Free yourself from those worries and spend the time doing the things you love. Say, “No, I have finished work for the day, now it is me time”. Spend that time on whatever you love, whether it is painting or reading a book. Whatever it may be, the options are in your hands.

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3. You’ll be free to prepare for emergencies

Disaster strikes and with it your bank balance drops drastically. And those car repairs or vet bills cannot wait for a more convenient time. As a result your overdraft, credit card and future bills are left in a confusing and catastrophic state.
Spending less means that you have the opportunity to put away savings. That way, when disaster strikes, you won’t be left penniless. You feel at ease knowing that you have those savings set aside should you need it.

4. You’ll have less clutter

Do you ever look around your room and think, why did I buy that? Or perhaps you have glanced at the endless items you have in storage and wondered why you bought it.

If you are spending less, that clutter won’t accumulate. Imagine the relief from having only items you need, not a mountain of junk. This can be very stress reliving as you will have less time needed for de-cluttering.

5. You’ll be free of debt

The credit card statement has come through. The amount of debt is frightening and you wonder how you will pay it back.

Wouldn’t you feel better if there were no debts to worry about? Of course you would. Freeing yourself from constant spending will make it easy to become debt free. Focus less on the ‘wants’ in life, which snatch away your money. Choose to cease spending and use your money on things you need.

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By becoming debt free, you will take the pressure of yourself. You won’t be frequently worrying about how you are going to pay it back. Another benefit of this is your credit score will not be affected.

6. You’ll be free to travel and see the world

Your mind is wandering again at work. You imagine how blissful it would be to be free to travel, to see the world. If only that was reality. But it could be with the correct approach.

Spending less opens you up to new opportunities, including travelling. If you can learn to spend less, you are more than capable of exploring the world. Not only will you have the money set aside (see point 3), but you will have the right attitude for travelling. Travelling is about exploring other cultures, with food and shelter being the only necessity. You will find yourself experiencing different lifestyles, not wasting time on going shopping. Remember, you should spend money on experiences, not on material items.

7. You’ll have happier relationships

Ever had a row with your partner because he spent money on the credit card? And the argument just seems to keep going, spiralling out of control, until you have forgotten what you were arguing about.

Money puts a strain on our relationships. We shouldn’t let it affect our relationships, yet it does. We all fear being financially unstable and not being able to afford things. Unfortunately we tend to vent out of worries and frustrations on our un-expecting partners. However, if you are spending less, making you financial stable, there will be less strain on your relationship. You can’t argue if you aren’t constantly spending. This results in happier relationships.

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8. You’ll learn new skills

Do you feel like you never have the time to learn a new skill? Have you always been meaning to learn a new language, but never got around to it?

Spending less money will free up your time. Just think about how much time you spend on useless money spending; searching online for a new wardrobe, finding the latest gaming gadgets, bargain hunting, the list goes on. With all this free time on your hands, you can finally learn that new skill. You can learn a new language or learn DIY tricks, whatever tickles your fancy.

9. You’ll be healthier

Finances restrict us. They take up our time, our energy and resources. You may feel that you don’t have time to work out, or you’re so stressed you need to pig out. As a result, your health takes a hit.

Spending less will greatly boost your health. It will take away your stress as you are no longer fretting over finances. That spare time you have gained will allow you to work out. You will have your full attention on your eating habits and be less likely to stress eat.

10. You’ll enjoy life

Our day-to-day lives are fairly manic. We get caught up in life’s motions that we forget to enjoy the moment. Among these culprits is money spending. It is regularly on our to-do lists; buy milk, find Hayley a cool birthday present, buy new yoga pants.

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This is where the true beauty of spending less comes to play. Our focus on money takes away life’s joys, straining our lives and turning our focus on material items. Spending less teaches us that we don’t need these things to be happy. It allows us to look at the current moment we are in, to appreciate what we have and to experience life.

Life is too beautiful to spend it worrying about material things.

Featured photo credit: sufinawaz via freeimages.com

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Jessica Charlotte

Jessica loves sharing her tips on life. She writes about happiness and motivation on Lifehack.

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Published on May 7, 2019

How to Invest for Retirement (The Smart and Stress-Free Way)

How to Invest for Retirement (The Smart and Stress-Free Way)

When it comes to stocks, I bet you feel like you have no idea what you’re doing.

Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

Here’s how to invest for retirement the smart and stress-free way:

1. Know Clearly Why You Invest

Odds are you already know why should invest for retirement.

But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

  • Will you spend more time with your family?
  • What does retirement mean to you?
  • Are you looking to launch that business you’ve been holding off for years?

Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

2. Figure out When to Invest

“The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

Investing your money well depends on your emotions.

Why?

Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

4. Open a Reliable Retirement Account

Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

  1. Vanguard
  2. TD Ameritrade
  3. Charles Schwab

5. Challenge Yourself to Invest Consistently

Committing to invest for retirement is hard, but continuing to do so is harder.

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Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

6. Consider Where to Invest Your Money

The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

Robo Advisors

Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

Bonds

Think of bonds as “IOUs” to whomever you buy them from.

Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

Here are the different types of bond categories:[5]

  1. Treasury bonds
  2. Government bonds
  3. Corporate bonds
  4. Foreign bonds
  5. Mortgage-backed bonds
  6. Municipal bonds

Mutual Funds

Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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Real Estate

Yes, buying a home is an investment when done correctly.

Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

Savings Accounts

Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

7. Master Disincline to Dodge Short Success

Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

So how can you master delayed gratification?

By building your discipline.

Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

8. Aggressively Invest on This One Investment

I’ve mentioned several types of investments but haven’t covered the most important one.

It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

But, how can you invest yourself?

Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

Retire Happy with Excess Money

The key to a secure financial future doesn’t only belong to financial experts.

It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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Featured photo credit: Matthew Bennett via unsplash.com

Reference

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