Many times people think there is no way I can save enough money for retirement investment. They feel like I’m just going to have to work until I die. That is not the case. There are things that you can do to enhance you chances to retire at a decent age. You just have to be willing to get started. Here are some suggestions to get things started.
1. Pay bills on time but do not over pay. There are problems with paying bills late and with over paying. When you pay late you get hit with late charges and fees. This can increase your monthly payments by as much as 30% or more. This is a very high interest rate for a short term loan. The opposite is true if you pay too much and carry a credit balance. Most companies will not pay interest on credit balances. You would be better off depositing the extra amount into a savings account and earning interest even if it is very little.
2. Take advantage of savings plans at work. For some people it is easier to save money if you never see it. If your employer has some type of plan that allows you to deduct money directly from your check then that is the best way. This can be a thrift savings, credit union or 401K plan. This can be easier and more systematic than having to deposit your check and then moving the money into some form of savings. Once you have accumulated three to six months of your necessary bills or living expenses into an account, and then look for something with a higher return. Until that point, look for security not return on investment.
3. Take advantage of free money but contributing to an employer sponsored retirement plan. If you have a plan available at work that has an employer match, TAKE ADVANTAGE OF IT!! This is free money that is not available anywhere else. I would suggest that you contribute at least to the point that the matching stops. So for example if your employer matches %100 of your contribution up to the first 6% the put in 6%. Additional contributions will depend on your situation but take advantage of the free money.
4. Play games with yourself by setting up a reward schedule. We are a society of immediate gratification. When you look at the time to retirement investment that can seem a long time to wait for your reward no matter what your age is. A way to overcome this is to setup a schedule of rewarding yourself at specific intervals. You can say that when you have put aside “$ x” for “y” number of months then you will reward yourself with something. It can be a gift for yourself, a night out or a vacation. The opposite can work by penalizing yourself for not sticking to your plan. You can say that if you fail to meet your commitment you will contribute money to the politician you like the LEAST! That for some people is the trick.
5. Take advantage of small changes. For some people it is easier to make small lifestyle changes. Bring a lunch to work instead of eating fast food. This will create small savings amounts like $5, $10 or $15 per day. This can add up over time. Car pooling with others is another example of ways to save money.
6. Attack larger items of savings. For some people to get motivated it takes large savings. An example of this is when you pay off your car don’t buy a new one. Take the money that you were paying monthly as your note and put it into savings. You can use this money to purchase a used car when you need to buy something else. This strategy can save you thousands of dollars over time. You will have money to possibly pay cash for a used auto and maybe still have money left over.
These are ideas of ways to save money that can be moved into your retirement investment savings plan. The main thing is to get started. Time is going to be your biggest asset. The sooner you get started the longer your investments will have to accumulate returns.
By Sharon Denise Talbot