We all understand the importance of saving because it’s something that is drummed into us from a very early age. From the time we are old enough to count, we are constantly reminded of the need to set money aside for a rainy day. We know how important it is, and nearly all of us have the best intentions, yet very few of us actually do save. Our recent Public Service Citizen Survey showed that 45% of US citizens don’t know how much they have set aside for retirement. Worse still, one in three Americans have no money set aside at all. But as the nation braces for a retirement crisis, the imperative to save, and start saving early, is only going to grow.
Many states and, now a few cities, recognize the looming crisis. In response, they are sponsoring defined contribution programs for individuals whose employers don’t offer a retirement plan. The goal is to provide those individuals the same opportunity to build a retirement nest egg as those who benefit from an employer-sponsored plan. With mandatory enrollment and automatic deductions, it’s highly likely that participants in these new schemes will stay in the plan and build their accounts. However, those assumptions are of course predicated on employment stability.
For those who aren’t saving, I understand the dilemma. If you can barely pay the rent and put food on the table, how are you supposed to save? There always seems to be something competing for your money, from expensive sports programs for your children to their education expenses. We all face some financial dilemma at nearly every waking moment. Yet unless people do set money aside, they’ll be forced to work for as long as they live, because they won’t be able to afford to retire.
So, how do you find the money to set aside? First, you need to get in the habit of “paying” yourself. What I mean by that is every time you get some money, whether it’s your paycheck, a tax refund or a gift, you set some of it aside into an account to help you with unexpected expenses and to support the goals you have for the future. As you see the balance starting to build, it incentivizes you to save more. You’ll feel good about the money you see growing and more comfortable about your future.
But then, the holidays hit. And that means buying gifts…for everyone. The pressure is high. The airwaves ring with commercials and hype about the latest and greatest technology and toys. Stores run big ads and big sales. Your kids and grandkids’ excited expectations of Christmas make it very hard to say no; you really don’t want to disappoint them.
Yet, this is the time you need to be strong. Don’t let the commercial aspect of the holidays derail your future. This is the time of year when you need to be more disciplined than ever. That means making your regular savings deposit, setting a spending budget and sticking to it.
I know that’s a tall order. But in the end, you will be so much better off. Don’t just live in the moment; be forward thinking. After all, you want to be able to enjoy Christmas, not just today but well into your senior years. And saving now is the best way to achieve that goal.
So, what will you do this holiday season? Save or spend? Comment and let me know.
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