8 things to give up to retire by 40, from real people who have done it

Retire by 40 by giving up these habits

As a handful of everyday people have shown us, retiring early is more than possible. That is, if you're willing to make a few sacrifices.

To give you an idea of just what it takes to retire before 40, CNBC turned to those who have done it.

Here are eight things early retirees, and soon-to-be early retirees, have given up.

Spending mindlessly

Several early retirees agree that the first step to achieving financial freedom is to track your spending. After all, "you have to know what you are spending before you can plan your retirement budget," say Justin and Kaisorn McCurry, who banked more than $1 million in a decade to retire in their 30s.

Plus, "knowing how you spend lets you determine whether you get value for your dollars, and where you might be able to focus efforts to reduce expenses further," the couple says.

The McCurry family
Source: The McCurry family 

Lifestyle inflation

If you want to settle down early, it's time to stop living up to the ceiling of what your income allows. If your earnings increase, don't boost your spending — put that extra money directly to savings.

It worked for the McCurry family: They made sure to "bank any raises we got," they tell CNBC.

The same strategy can be used for any surplus money, like a bonus, birthday check or small windfall. Instead of planning trips or grabbing gadgets, consider directing at least some of it towards lingering debt, a retirement savings account or an emergency fund.

How this couple saved over $1 million in retirement savings to retire by 43

Buying lunch and dinner every day

Going homemade was "the biggest 'aha' moment of the year for me," writes Matt of "Distilled Dollar," a Chicago-based CPA who saves 60 percent of his income with his fiancee and plans to be financially independent by age 35.

Matt estimates that they save about $5,000 a year by going out less. "Not only did we start to cook more, but we found creative ways to save money at the grocery store," he says. "Plus, we are eating much healthier now, too."

Check out more tips on how to trim your grocery bill.

How to eat on just $3 a day

Excess living space

One of easiest ways to save big is to downsize.

Matt and his fiancee estimate that they save about $12,000 a year by "living big in a tiny home." The couple, who managed to save more than $50,000 in 2016, pay less than 15 percent of their income for their 700-square-foot condo in Chicago.

And they're not just saving money on rent, Matt tells CNBC: "We also need less stuff to fill our place, and we feel less social pressure to buy more things to match our living situation."

Matt and his fiancee went from living paycheck-to-paycheck to saving more than half their income
Courtesy of Distilled Dollar

Trying to show up your friends

Keeping up with the Joneses, or trying to live up to your friends' or neighbors' standards, is a tempting habit — but one that isn't going to help your chances of retiring early.

"Question the things you're spending your money on," says Sean of My Money Wizard, who is well on his way to retiring before age 37. "What makes you happy is not decided by your friends, your neighbors, or the commercials on TV. Just because your friends enjoy spending lavishly on clothes, doesn't mean that's for you. ... Don't waste money on things that aren't important to you."

Simple money habits that will help you build wealth in 2017

Your car

This may be more feasible for some than others, but if possible, trade in your car for public transportation, a bike or your own two feet.

By moving to a place within walking distance to work, Matt estimates that he and his fiancee save nearly $9,000 a year on commuting costs. "This single decision has made me healthier, happier and wealthier over the past year than nearly any other decision," he writes.

If an active commute is completely out of the question for you, check out other ways to cut back on commuting costs.

How I save over $1,000 a year on transportation

A willingness to wait and see

Money doesn't simply appear. If you want to build enough wealth to retire early, you have to have a clear goal and a specific plan.

Start by thinking about your future lifestyle and what it might cost, says McCurry. Do you plan on traveling a lot, or buying a vacation home? Do you want to gift money to family members?

Next, project how your spending will change in retirement. "You will spend less in some categories, like commuting, and will probably spend more in other categories, like entertainment, recreation and travel," says McCurry.

Finally, set your retirement budget, which will help you determine exactly how big your portfolio needs to be to last through your golden years. Once you have your "magic number," you can calculate how much you need to set aside each month to reach your goal.

This Intel computer engineer fast-tracked his retirement and finished working by 38


If you want to retire early, commit to starting now.

"We stopped a nasty habit we had of reading about great tips and then failing to implement them," Matt writes. "Avoid our mistakes. ... Literally, do something today from this list and start saving money."

Don't miss: How one couple saved more than $1 million in 10 years to retire in their 30s

24-year-old Silicon Valley engineer lives in his truck and saves 80% of his income
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