The Gist: Getting your savings going takes work and planning, but it will be worth it in the end
It’s always nice to have Money put away for a rainy day, isn’t it? These days making sure you have money saved away is more important than ever. There are constant fluctuations in the stock market, interest rates are all over the place and there can be a disaster waiting around every corner.
Social Security is slowly draining away, and if you have a long way to go until retirement, you’re probably going to have to rely on other savings you’ve made throughout your life, among other reasons which we’ll take a deep dive into below.
Social Security and Retirement
Back in the good old days, Social Security was a guaranteed way to ensure that you had financial backing when you retired. These days Social Security loses more and more money each year, which has thrown this option into absolute disarray.
The average US lifespan is over 78 years old. This may mean that as the age limit on retirement keeps getting raised, you may have to work even longer during your life. This is a double-edged sword because working longer means more savings.
However, you’re losing some of your later golden years for even more work. If you don’t save up enough money by this time, then you won’t have much left to give to your family when you pass away, and you’ll have to be very frugal with your spending.
- Don’t rely on Social Security
How Should I Start Saving?
To begin with, you should evaluate your monthly finances. Over time, you will be able to see what your biggest household moneymakers are and what you’re spending the most on.
If you realize that maybe you’re spending your money on certain unnecessary things or your money could be spent more efficiently, then you’re on the path to cutting costs, which will increase your ability to start saving money.
Before you start looking into all your insurance and mortgage agreements that you’re still paying off, you should start small.
Figure out how much is being spent on the weekly food shop, it may seem almost insignificant in the grand scheme of things, but you’d be surprised at just how much the little things begin to add up. Once you’ve figured out how to be a bit more frugal with your smaller outgoings, then you can start to focus on your larger payments or direct debits. Start by applying these key points below:
- Analyze your expenses
- See where you can reasonably cut costs
How to Actually Start Saving
So you’ve figured out your smaller and larger finances, where your money is going. That’s great! Now you have to start learning how to end up with more money in the bank.
Start looking for promotions and coupons online. There’s plenty out there if you find the right places to look. On top of this, you could spend money on long-lasting groceries, such as canned goods or meals that can be frozen. This means less frequent trips to the local store and less money on expensive food.
With enough searching, you can often find more cost-efficient deals for your needs rather than what’s marketed to you by banks or insurance salesmen.
- Cut coupons and use efficient ways to shop for daily needs
Saving for the Future
It’ll be a great feeling when you finally start seeing how much more money you’ve started saving when you follow the steps above. The key is consistency. You can’t get complacent when it comes to saving; otherwise, you’ll just end up with little.
There will always be new promotional deals online to save money on all kinds of products, and there will always be better insurance deals or a cheaper car. If you get yourself into a frugal mindset, then saving will just become second nature.
Another thing you should consider is your 401(k). Most employers will now match your 401k contributions. This will ensure that upon retirement, you have a savings account with a healthy interest rate.
It may seem silly not to spend your money as you get it and that putting it into some mystical long-term savings account. That’s the thing, one day that “Much later” will arrive and you don’t want to have zero in your retirement account.
Without a long-term retirement plan, your golden years will, without a doubt, be a struggle.
- Focus on the long-term and dedicate yourself to creating a retirement plan
The days of retiring nicely at the ripe age of 60 are well over. These days you’ll probably be lucky to retire at 70.
Luckily, there are things you can do early to alleviate any struggles later on in life. Be more frugal, look for good deals on everything you possibly can and start getting some of your income into a 401(k) or another type of savings account.
If all goes well, you’ll have plenty of money to live off with some leftover to give to your kids or grandkids.