Ah, retirement. Could there be a bigger financial goal out there than this?
We all talk about it, think about it, read about it, and plan for it.
But how many of us do what it takes to get ourselves into a position to retire how we want when we want?
How many of us save like we really should?
Let’s take a look at what it means to save for retirement til it hurts.
Simplify Your Lifestyle
This is probably easier said than done – especially in our day and age.
We constantly chase and try to keep up with the Joneses. Whether it’s our clothes, cars, or computers we all tend to keep up with or outdo one another with our trinkets.
Is it wrong to buy new things and enjoy them? Absolutely not. But when we are constantly upgrading our things even when we don’t need to, we should seriously reconsider our priorities.
We all want to achieve our goals, but are we willing to simplify our lifestyles to get there?
Next time you want to go out and buy something new, jhink twice. Think about whether you need it or not; or whether it’d be better to save that cash for retirement.
Many of us would do well to simply reduce our cell phone or cable packages, cut back on how much we go out to eat, start packing our lunches, or other simple things that would help free up cash.
Make Savings A Priority
You can make savings a priority by implementing the old saying, “Pay yourself first.”
Before you pay your bills, determine how much you are going to save and put that away. Then pay your bills.
After you’ve done that, you can use whatever is left for spending.
By doing this, you effectively cut down your expenses because you don’t have as much to spend on discretionary items and you end up saving more than you ever imagined! It works.
When you don’t save first, what ends up happening is you pay your bills, take out some spending money, and whatever is left you save, which usually is not much.
So make savings a priority. You’ll be glad you did.
Push Yourself to Save More Each Year
This can be hard to do, but very rewarding.
Practically, you can do this by taking your raise each year and saving it. Or, if you get a bonus, why not put that away for retirement?
Just because your income goes up doesn’t mean that your lifestyle has to go up. Guard yourself from lifestyle inflation and be aggressive with your savings each year.
Make it a contest too! If you saved $3,000 last year, try saving $4,000 this year. Open a Roth IRA and try max funding it. Figure out which retirement account is right for you, and save like crazy!
If you saved 5% of your income, push yourself to get to 10%!
By simplifying your lifestyle, making savings a priority, and pushing yourself to save more each year, you will be much more likely to hit your retirement goal than if you didn’t!
What are your thoughts? Tell us in the comments!