3 Biggest Expenses Stopping You From Retiring Sooner

Last year, the average household spent $57,311, with most of that spending going toward only three types of expenses: food, housing and transportation.

Every dollar you spend on those expenses is another dollar you didn’t invest in a retirement account. Technically, the more money you allocate to them, the further back you push retirement.

Let’s take a closer look at those expenses:

1. Food

The Consumer Expenditure Survey categorizes food expenses as either “at home” or “away from home.” Spending in one of those categories ballooned a lot more than the other last year:

  • Food at home – $4,049
  • Food away from home – $3,154

Unless dining out frequently is more important to you than retiring sooner, perhaps it’s time to review your choices.

Even if eating out is important to you, know that giving it up is not the only way to save money on food away from home. Eating appetizers for an entrée or splitting entrées are a great way to enjoy the experience without overextending your budget.

2. Housing

A traditional rule of thumb says that to maintain a healthy budget, you should not spend more than 30 percent of your income on housing.

That might seem impossible, given that home prices and rent costs generally have increased in recent years. Still, it won’t hurt to take a closer look at your housing costs and current options for decreasing them. You don’t need to buy the biggest, fanciest home you can afford.

3. Transportation

Getting around is our second-biggest expenditure. The transportation cost subcategory that increased last year, rising by 4.6 percent, is the “other vehicle expenses” subcategory. It includes:

  • Finance charges
  • Maintenance
  • Insurance
  • Rentals/leases/licenses

Consider all expenses present and future when making your transportation choice.

By lessoning these core expenses you could ramp up your retirement fund that much sooner. Who wouldn’t want to retire on their terms?

Source: Money Talks News

 

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