10 Steps to Retiring Young

5) Build Good Savings Habits

Good savings habits go right along with money management, however, they are both different. Money management is the ability to control your spending, while developing good savings habits is what you do with that money.

Again, diversification is an important step in this process. Most people start their savings with a savings account, then move on to safe investments such as CDs, money market accounts, or company sponsored savings programs such as a 401K.

Once you have grown your investing knowledge, you may begin looking at stocks, bonds, mutual funds, or riskier investments such as tangible assets and real estate. Consulting with a financial planner, or attending financial planning seminars are great ways to learn about growing your investments and how you should save and invest according to your goals, current situation, and age.

A good investment plan, with consistent saving, will invariably help you achieve your goal of early retirement.