These days, it’s all about self-gratification. After all, nobody really knows how much time they have. So if you dream of seeing the world and creating memories in foreign places, the time is now.
But before you invest in travel experiences, you need to secure your retirement funds. I have a couple of friends that I talk to about finance and every one of them (including me) talks about how little education there is out there for people. There are so many financial products available and if you don’t have someone in your personal life teaching you how to use them all, odds are you’re not searching for them yourself. In a society where everything keeps getting more expensive, I’m a huge advocate of planning for the future and maintaining a budget.
In this post, we’ve gathered the top tips to help you achieve your travel goals while saving for your retirement.
Set Retirement Goals
In order to have a clear view of what you need to do to reach your retirement goals, first you need to set these goals. To start off, try to ask yourself how you want your retirement to play out and when you want to retire. By doing this, it allows you to identify your retirement goals and how you’re going to achieve them.
Be sure to stay grounded and realistic when setting your goals, especially since spending money on trips can take a sizeable chunk out of your current income. Additionally, try to be overly specific with what you want as it allows you to quantify the steps that you need to take for retirement. By listing your current lifestyle choices and their costs, you can create a rough estimate of how much you need to contribute to your retirement savings.
Create a Detailed Budget
You should be able to spend the least amount of money on your travels without compromising your lifestyle. The same can be applicable when it comes to saving for your retirement. That’s why it’s crucial that you base your future budgets on your spending habits.
This means reviewing your expenses from previous years and sorting them into different categories. This allows you to track where your money goes and to pinpoint areas where you can cut back. You should also include savings and retirement funds in your budget. If you’re a freelancer who travels a lot, your income might vary, so try to be realistic when setting how much money you put into your savings and retirement each month.
Prioritise Your Retirement Savings
To help you stick to your budget and contribute to your retirement fund religiously each month, you should treat your savings as an automatic expense and not just an option. If you fail to prioritise your retirement savings, there’s a chance that you might spend your money on other things. This is why it’s important to be realistic when setting your retirement goals and retirement contributions.
For one, you can automate your retirement funds at a set date each month to help you prioritise your savings. Besides that, you can also automate other kinds of savings like bills, emergency funds, and investment property funds. And once you’re done, be sure that that money stays with you. Be wary of dipping into your emergency fund for non-emergencies, or getting tempted to make early RRSP withdrawals. The latter not only means you lose long-term investment earnings, but you also don’t get contribution earnings back. This means that you’ll have a harder time trying to catch up on your retirement savings.
Fulfilling your travel goals shouldn’t stop you from thinking about your future. So, be sure to consider our tips and save for your retirement as you enjoy the digital nomad lifestyle. For more articles on how to travel while maintaining a career, be sure to check our other blog posts.
