Nobody needs to tell us how important it is to save for retirement. But when you ask people about their retirement plans, most of them will tell you that they don’t have anything saved up for the future. When you ask them the reason, the one reason you will get to hear a lot is that they’re not good with saving.
It was found in a study that almost half of Americans don’t save for retirement. Those who do save, aren’t doing well with it. But all is not lost. More than 50% of Americans made a New Year’s resolution to save more in 2019 for retirement.
Saving for retirement is easier than you think. Keep on reading and find out how you can do that too.
SET YOUR GOAL
The very first thing that you have to do to plan for your retirement is to set your goal. It has been your dream long enough — now you need to turn it into reality. You need to know what you have to do today in order to live the life you have imagined, in the future.
Find out what your happily ever after looks like. Take out some time and sit down with your spouse or a friend. When you picture yourself after your retirement, what do you see? Do you see a white, sandy beach? Do you see yourself hanging out with your grandchildren? Do you see yourself traveling? Once you know your future, you can easily work on your present.
LOWER YOUR COST OF LIVING
One of the main factors that directly affects your retirement planning is your current cost of living. That is the reason why most people can’t save for retirement. In the last decade, the cost of living in America keeps increasing with time. It is understandable that people don’t have a lot of saving margin, but with a little bit of planning, it can be done.
SAVE THE RAISE
What usually happens is that when people get a raise, they immediately raise their standard of living to match the additional amount. They get a bigger car, have their kitchen retiled, a better wardrobe, branded clothes — you name it! Remember that if you invest 15% of your income it also means investing 15% of your additional increase in salary. As your salary increases over time, this little sum of money can become a serious amount for you.
START BUDGETING
Another thing that you should do is to stick to a budget — a lot of people don’t do that. A budget helps you take control of your expenses. Most people, who don’t set a budget, fall victim to impulse buying. They buy a lot of things that they don’t need or want and then are stuck with a closet full of unnecessary items.
STOP OVER SPENDING ON UNNECCESSARY ITEMS
We all like living in style — who doesn’t? It’s just that you should do that after your retirement rather than before it. Going out with friends or colleagues for lunch once or twice a month is okay. Doing this on a regular basis? Not recommended! Same goes for paying for cable upgrades and getting those premium channels that you’ve never watched and never will. These are the things that empty your bank account quickly.
THINGS YOU CAN LIVE WITHOUT
A study found that an average American spends around $1,497 per month on things that they can definitely live without. Now imagine that $1,497 going into your retirement fund. Do you really need that premium cable account? Or that expensive gym membership that you took just because everybody else at your office goes there? Don’t get me wrong. Having a little fun is not a sin. But always keep it under a limit.
CHECK YOUR INSURANCE POLICY
When did you get your insurance policy? Now when did you last check it? About the time you got it, right? Go and talk to an insurance agent and work out your options. They can surely find you a better deal — maybe car insurance or home insurance. You might be wasting a lot of your money that you could have been putting in your retirement fund.
TAKE CARE OF DEBTS
Many people who want to have a retirement fund, can’t do that because of their debts — especially credit card debts. When you incur a debt, you not only borrow money from a bank, you take out a hefty amount from your future as well. You could have spent that money on a beach in Dominica, sipping Pina Coladas. Debt has the power to keep us from reaching our goals.
Just remember, retirement is a number. There’s no proper age to enjoy it. Keep that in mind and start saving. Make use of the tips given above and let us know how it works out for you!