2. Create a Budget and Determine the Expenses 


The second step in creating your budget is determining how much you need to save each month. This also implies how much are your monthly expenses so you can calculate how much can you allow to save monthly. 

This means that you need to take into consideration your monthly salary and write down how much you spend on each category including:

  • The rent or the loan;
  • The gas;
  • The bills, including water, electricity, internet, phone and trash;
  • Health insurance;
  • Groceries and household expenses;
  • Entertainment and hobbies;
  • Other expresses. 

Also, do not forget to pay off the whole mortgage and loan before you start saving for a pension. Going to an early retirement with loans and debts is not a good idea. Your early retirement goals will be ruined by debt! It will wipe out your retirement funds and take all of your monthly income.

It’s important to keep in mind that, due to inflation, essentials like food and gas tend to increase in price over time. As a result, keep in mind the amount you need to set aside each month to support your current lifestyle may not be the same in 10, 15, or 20 years.


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