Congratulations, you’ve made the decision that you want to retire early. For most of us, this requires sacrifice and reducing most (or at least some) of the things that we unconsciously pay too much money for.

The first step is observing. If you do not have an application that automatically tracks the amount that your spending (credit cards, debit cards, cash withdrawals), bill payments, and deposits, please find one that suits your needs immediately. A lot of individuals find that the Mint application works well plus it’s free), but it’s important to find a system that works for you.

So, the big question is? What will I be observing? Simply put, your spending habits.  In particular, look for the following items:

Bills

• Internet
• Cable / Netflix
• Phones (landlines, cellphones)
• Insurance payments (Automobile, Life, Car)
• Clubs
• Gym membership
• Magazine subscriptions
• Other subscriptions / memberships

Spending

• Clothes
• Food (groceries)
• Food (restaurants)
• Alcohol
• Home decorations
• Electronics
• Donations
• Spending that is not accounted for

Income, investments, and savings

• Paycheck
• RRSP and/or RESP contributions
• TFSA
• Investments

At this point of time, just observe, at the end of the month we will analyze this information and start A plan which is part 2.

I missing anything in this list, please comment below!