After counting down at midnight, popping corks, and cheering on the New Year next come thoughts of resolutions. Most people start diets, aim to hit up the gym more often, decide to read more, or decrease their stress. These health improvements are all wonderful endeavors, but don’t forget about your financial health as well. When you’re young retirement feels like a fairy tale world floating far ahead in the future, but when it comes to investing in your future it’s never too early to start.
Make it Easy
Saving doesn’t have to be difficult and the easier it is, the more likely it will happen. We like to use automatic account builders that automatically pull X amount of money from your bank account either into a savings account or an investment account each month. That way, you don’t have to make a decision nor does it get delayed or put to the side; it gets done. Starting small is perfectly normal. Thinking of an easy amount that you won’t miss and set that much aside each month. As the days tick by and you don’t notice it, slowly increase it. Or if you get a bonus or a raise, put that into your savings.
Make Work, Work for You
Another easy savings tool is your company’s retirement plan. Most companies offer a type of retirement plan whether it be a 401(k), 403(b), Profit Sharing Plan, SIMPLE IRA, Trustee Directed Plan, or if they don’t you may have the option to open and fund an IRA of your own. The majority of these savings tools allow pre-tax contributions (Unless they have a ROTH component: See ROTH OR NOT TO ROTH Blog) and allow your money to hopefully grow and compound on top of each contribution. Some companies have matches too, so you might have to put in 5% to 4% employer match. Don’t walk away from these free savings. Just say thank you to your employer next time.
Don’t let your resolution falter or fizzle out like the trendy diet fades. Stay true to your savings resolution and your future self will thank you. Need help staying accountable to your plan or can’t decide how to start? That is what the financial advisors at Family Legacy do. We pull together your financial big picture and help you stay resolute to your goals.