If you’ve already been building up your savings but are still years away from retirement, you might think about spending your savings elsewhere. But even if your short term and long term financial goals are important, it’s equally crucial to prepare for retirement. When you put retirement planning on top of your priority list, you won’t have to worry so much about whether or not your social security benefits are enough. There’s also going to be less financial stress when healthcare becomes more demanding. Because adequate preparation for the future offers more benefits, here are some tips to help you save money for retirement.
Start saving today
There’s no better time to start saving than now. It’s easy to procrastinate and put off retirement saving when you’re young and have plenty of time. Or you might find excuses not to save money, like expenses. Take note that putting off saving can take a toll on your financial health in the long run. Therefore, be sure to find ways to free up some room in your budget so you can start saving.
If you haven’t been paying close attention to how your money is spent, now is the time to create a list of all your expenses. List where your money is spent on a daily, weekly, and monthly basis. Then, take a look at the items that can be eliminated from the list, no matter how little they cost. Remember that every penny counts.
Automate your savings
Setting some money aside for retirement doesn’t usually come easy, especially with the knowledge that you still have a long way to go. What you can do is put your savings on autopilot. Set up your account in such a way that it transfers a certain amount to your savings as soon as you are paid. Not only will this make saving easier, but it also ensures that your savings is separated from the money dedicated to your daily living expenses.
Deal with your debts
Debts are one of the things that can keep you from reaching your financial goals. If you have excessive debts, it is better to deal with them now than later. Come up with a debt reduction plan. Some debts, like student loans and mortgages, may be incorporated into your long term financial planning. However, credit card debts and other personal loans can distract you from retirement planning. As soon as possible, pay off short term loans and settle credit card balances every month. Consider using automatic bill payments to make sure you’re not missing any and help eliminate late fees. Also, use cash for purchases as much as possible. Leave your credit card at home if you’re dining out or to shop as you might end up spending more than you intend to.
Eliminate bad spending habits
Some people spend more than they earn just to maintain a luxurious lifestyle. There’s nothing wrong with wanting to live a comfortable life, but it’s equally important to make sure your lifestyle doesn’t hurt your ability to save. Try to curb your spending whenever possible. Don’t waste your money on things you don’t really need. Have you gotten used to spending a couple of dollars on a cup of coffee every day on your way to work? Maybe it’s time to make your own coffee instead. Always out on the weekends to party and dine with friends? Have the party at home!
Build an emergency fund
Besides working on your retirement savings, it’s also a great idea if you can allocate some for an emergency fund. You’ll never know when there’s going to be unexpected expenses like car repairs, and you don’t want to end up using your credit card or touching your retirement fund for these things. Don’t underestimate the importance of having emergency savings.
There’s no such thing as too early when it comes to preparing for the future and it won’t hurt if you save money for retirement now.
For more money-saving tips, or if you’re interested in starting your journey towards financial independence with us, please feel free to contact Calcite Credit Union.