It is well known that Americans are not saving enough. Most of us, from baby boomers to millennials, will be responsible for ensuring our own retirement security as traditional pensions wane and Social Security provides only a meager supplement. Therefore it is essential to cultivate lifelong habits of saving and investing, despite the manifest challenge of setting something aside when it seems there is always month left at the end of the money.
Sometimes the hardest part of a long-term project is getting started. Here are a few ideas to help jump – start your savings plan in case you haven’t already begun.
Christopher A. HopkinsWrite down everything you spend, at least for a while. This sounds like a pain (rightly), but is almost guaranteed to highlight some cash-draining habits you have probably underestimated. Even small indulgences that seem insignificant in the moment can present big opportunities to save once you recognize them. Suppose you enjoy a $3 latte every day on the way to work. Seems pretty minor in the scheme of things. But if you invested that cash every week instead, over 30 years your retirement nest egg would grow to be $60,000 larger. Most of us can find some leaks in our spending stream that could be redirected into savings but only once we catalog and identify the likely suspects.
Start slowly and advance steadily. Once the saving bug bites, it is easy to get impatient and ultimately lose momentum. New habits are built by repetition over time, so set some attainable goals and work relentlessly to achieve them before raising the bar.
Create a fund to be used for emergencies. Things happen. When living check to check, these unanticipated emergencies represent painful setbacks and sometimes even lead to desperate measures such as payday loans that make the hole even deeper. Resolve to set aside a few bucks out of every paycheck until you have a stash that would cover an unexpected car repair or a new water heater.