Retirement Planning For Beginners
If you are telling yourself that you don’t have the money to make your 401 k investing worthwhile, stop it!! You do have the money, you may just have to make a few lifestyle changes. You need to make the choice between short-term satisfaction and long-term fulfillment.
Give up a little bit today – to have a reward tomorrow. A small amount from every pay check invested into your 401 k account will accumulate over time due to the magic of compounding. Sounds great, but where are you supposed to get the extra money for your investments?
Retirement Planning 101
Finding money for your 401k investment:
Keep a budget.
- Set it and follow it, as if your life depends on it.
- A budget gives you financial parameters.
- Extra money you receive from raises or bonuses at work should not break your budget.
- Invest that extra money.
Avoid debt management.
- Buying something you can’t afford costs extra money.
- Spending beyond your means just creates debt.
- Excessive debt throws you into debt management.
- Debt gets expensive.
- With debt comes the expense of interest.
- Debt management is time-consuming.
- Avoid debt management by staying out of debt or at least managing your own debt so that it doesn’t become excessive.
Avoid paying interest.
- Added on interest makes thing expensive
- Added on interest is a waste of your hard-earned money.
- You will pay 2 or 3 times more for something after the interest is added on.
- If you avoid buying things you cannot afford, you avoid wasting money on interest.
- Why not invest that interest money.
Limit the use of credit cards.
- If you have to use a credit card, pay off the balance.
- Do not carry a balance.
- Carrying a credit card balance costs money in interest payments.
- Take that interest money and put it into your investments.
Don’t waste money – invest the money you save.
- If you smoke, quit.
- Skip the cafe’ lattes; make coffee at home.
- Don’t make eating out a regular expense.
- Have eating out be a treat.
- Shop your insurances every renewal.
- Cancel subscriptions to magazines and other periodicals that you no longer read.
- Cancel gym memberships if you no longer work-out.
- Watch what you spend on the little things, it all adds up.
Expenses add up.
- $4 cup of coffee, every day, $1460 a year.
- $8 lunches every work day, $2080 a year.
- $6.50 packs of cigarettes, $2372 a year.
- $100 per month gym membership, $1200 a year.
- Those items cost you $7,000 a year.
- If you cut out those items, you would have $7,000 to invest.
You get freedom as your reward for finding money for your investments by cutting back, not wasting money, avoiding debt, avoiding interest. The freedom to do anything you want to do…your freedom is worth a little effort on your part.
When you have built up a nice nest egg, at retirement you will have flexibility, freedom and independence….what better reward than that could you ask for.
Start visualizing your perfect retirement and then start investing in it…one pay check at a time.
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