Whether you’re facing retirement in the near future or are already past that stage, saving money and preserving funds is always an important goal.
For many, though, saving money is a challenge. Temptations abound and often lead us to throw caution to the wind. The good news is that we can improve. We can change bad habits and increase our savings by:
- Automating whenever possible. If you have an employee-based retirement plan, sign up for automatic contributions. This will serve two purposes: you won’t be able to cave into the temptation to forgo contributions as they will be automatically taken from your paycheck. And you will be able to ‘set it and forget it.’ Before long, your savings will begin to add up.
- Planning in advance. Avoid impulse purchases by heading out to shop with a list in mind. It will remind you of what you need and help you avoid making unnecessary purchases.
- Limiting debt. Commit to paying off your credit cards in full each month. And limit the number of credit cards you have.
- Setting realistic goals. If you’ve never committed to saving money, do not start by creating an unreasonable goal for yourself. Start small. Otherwise, it can backfire by causing you to rely too heavily on credit cards and to beat yourself up for failing to reach your goal. Instead, shoot for saving 3% of every paycheck and gradually increase it to 10% over several years. If you are retired and no longer receiving a paycheck, make sure to stick to your budget. It should be based on your personal financial circumstances and have expenses accounted for as well as occasional rewards. And make sure to review your budget annually to adjust for your changing needs and fluctuating markets.
- Embracing a frugal lifestyle. This includes delaying gratification. It also means valuing saving over spending. Extreme savers recognize the benefits of watching their accounts grow over purchasing a luxury vehicle, going on an expensive vacation or buying designer clothing. While being an extreme saver may not be ideal for everyone, adopting that mentality when deciding whether a large purchase is necessary or not can help you make wiser decisions.
- Rewarding ourselves. It’s not necessary to cut all extraneous expenses all the time. If you created a budget, are sticking to it, and have already started to watch your savings grow, treat yourself to an outing. A small reward goes a long way in boosting your confidence and increasing the likelihood that you will continue moving forward.
One of the greatest fears of retirees is running out of money prematurely. By starting a savings plan early on, creating a budget, and working with a financial planner regularly, you can prevent such fears from becoming realities.
At Silverman Financial, we are committed to helping our clients grow their nest eggs and preserve their retirement funds. We work with you to create a manageable plan that meets your needs today, tomorrow and throughout your golden years.