Have you taken the time to sit down and think about your money? I know that people are busy these days, and you might think, "Well, I'm young now, and I'll have time to do it later." You have it all wrong. You can start saving for retirement at any age.
People say that if a 25-year-old saves $2 a day ($60 a month), he will have a million dollars by the time he is 65. But what is a million dollars worth these days? With housing costs and other costs of living going up, it's almost nothing.
So, if you want to save for the future, you need to make a budget. Don't count on Social Security to pay out. They're having problems now, let alone when you're that old.
Here are some ways to save money for the future and retirement:
- Write down all the money you get each month. Include everything you get every month, such as your salary, gambling winnings, child support, alimony, and any other income.
- Subtract your expenses from your income. I hope you are coming out on top. If not, you need to be smart about which expenses you need and which ones you can do without. Do you need a cell phone, or is it just convenient to have one? Practice self-control now, and you'll be glad you did it later.
- Continue doing this for a few months. Then, at the end of each month, figure out where your unnecessary money went. You ate out more than once a week, right? You didn't make a sandwich for lunch, did you buy one instead?
- Write down all of your costs. Make a list of all of your expenses, from utilities to your cell phone bill. Everything, like your child's violin lessons and pet costs.
Put 10% of what you earn into a savings plan. This is what investors call the "rule of thumb" for how much you should save each month. If you make $3,000 per month, you should put $300 away. First, pay yourself!
- Think about other things to do besides saving. You could put money into a 401k or an IRA. Talk to your banker to find out which one would be best for your needs and finances.
That's all there is to it, really. Don't spend money from your savings on things like a new pair of shoes or a trip to the movies. That is for you in the long run! But if your car needs a new transmission, you can use this savings.
You just need to be very self-disciplined and want to be financially independent. Just use these simple steps, and you'll be good to go.
