But despite the fact that I likely won’t retire for many years, I’ve been saving money for retirement out of every paycheck since I was just 19 years old.
When I landed my first “professional” job working in an office building during college, they explained my pay and benefits when I was hired.
They told me I was eligible to contribute to the employer-sponsored retirement program, which included an employer match for the first 5% of your contributions.
After they explained it to me, I considered not participating in this program. After all, I was a semi-broke college student and I was only going to be working part-time in their office for a maximum of 2 years.
Luckily, my parents talked some sense into me before I made my decision to opt-out.
My dad works for the same company and he explained the program to me with a few more details. Essentially, the employer match was going to double my money if I contributed 5% into the retirement program. When it was explained like that, I knew I had to participate.
Giving up that money from my already-tight paychecks was difficult at first. Luckily, the amount was deducted automatically before I could get my hands on it, otherwise I might have spent it foolishly instead of investing in my future.
If this sounds like you, here are a few things to consider to help you start saving money for retirement (or other things too) and hopefully I can help show you how to save for retirement.
Set Up an Auto-Withdrawal
Like I said, it was a good thing I couldn’t stop my investment money from being withdrawn from my check. If you don’t set up an auto-withdrawal or auto-transfer to a savings account of some type, you will always come up with a reason to delay setting that money aside. It may truly be a good reason, like a huge and unexpected car repair bill, but more likely it will be spent on discretional things part of the time too.
Don’t Count That Money
If you don’t have an employer sponsored plan, or you choose not to contribute to it, don’t count the money that you have withdrawn in your monthly budget. Pretend that money wasn’t even in your paycheck so you don’t have it to plan on spending.
Use a Separate Bank
My main bank has online banking where I can easily see all my accounts with them on one screen. While this is helpful at times, it can also be a hindrance. When I see my savings account growing to a healthy balance I am sometimes tempted to withdraw a few dollars here and there to spend. This is a big no-no if you are trying to build wealth, save for retirement, or save for a big purchase.
To help derail this thinking on my part, I moved most of my targeted savings accounts to a different banking institution so they are harder to access and I’m not tempted by them every day when I look over my checking account.
Are you saving for retirement or another big purchase?