According to a poll by Northwestern Mutual, money is the most common stress source among Americans, and nearly nine out of ten respondents say nothing makes them happier than knowing their finances are in order.
Saving money is not & # 39; However, it is not easy, no matter how much you earn. There are always bills to pay, and if you still have money left at the end of the month, it's much funnier to give away something you do not need than put it in your savings account or retirement plan. Especially when retirement is decades away, it can be tempting to postpone saving to another day – but to wait too long and it will be almost impossible to catch up.
Fortunately, saving for the future does not have to be stressful. By making a few changes to your lifestyle and using a few simple habits, you can save more money and make sure your finances are in top form.
. Write Your Financial Goals
It is one thing to have one goal in mind, but it is another to actually write down your goal. In fact, it has been scientifically proven that you can write down your goals to reach them.
In a study conducted by researchers from the Dominican University of California, a group of participants was asked to simply think about one goal while it was another group. They are asked to write down their goal, to create an action plan and Send a weekly progress report to a friend. The results? Within the first group, only 43% of people achieved their goal or made significant progress. But as many as 76% of the participants in the second group achieved their goals or approached them.
When you write down your goals and create a concrete plan for achieving those goals, you are not only responsible, but also provide a roadmap to accompany you on your saving journey. For example, when you save for retirement, you may have a big goal in mind about how much you want to save until you retire. But it can also be helpful to have smaller, less intimidating goals along the way to keep you informed and not discouraged.
. 2 Automate Your Savings
If you need to manually transfer your money from your checking account to your pension fund or savings account, you can easily forget to do so or spend the money elsewhere. For automatic transfers, you can set up your bank account to transfer a certain amount weekly or monthly, which makes saving easier.
If you have a savings target in mind, set up your accounts to receive the automatically transferred amount you want to save. You can even set up multiple transfers for different destinations. For example, you can transfer a certain amount of each paycheck directly to your 401 (k) while also transferring money to a savings account to build an emergency fund. If you no longer need to manually move your money to other accounts, saving will be easier.
It's even possible to automate your entire budget and eliminate much of the pressure associated with managing your money. If your bills are paid automatically every month and you also automate your savings, all you have to do is sit back and watch your savings increase over time.
. 3 Rethinking how to prioritize your savings
Many people may choose to save only what they have left at the end of the month. While this is better than saving nothing, a better approach is to think of your savings as if it were another bill that you absolutely must pay. The Electricity Provider will not let you down if you just decided not to pay your bill for a month. Also think about your savings.
If you want to save a certain amount of money per month for retirement, do it all in your power to save as much each month. It's easy to save a few months because there are no major short-term consequences – in contrast, if you stopped paying your other bills. However, the long-term consequences can be serious if you postpone retirement. Once you've saved for a month, you can make it a habit to skip it whenever you feel like it. Then, before you know it, you have reached retirement age and are far from the goal you set for yourself. Of course, you still have to pay your rent or mortgage and all other bills, but make sure you can still afford to save. If you find that you do not have enough money to reach your savings target, you may need to sacrifice. But these sacrifices are worth it if you can retire comfortably and achieve your other financial goals.
. 4 Increase Your Pension Fund Subscriptions Regularly
By automating your savings and making a monthly transfer of a set amount to your pension fund, planning your retirement becomes a task that you "set and forget". This is good in many ways, since the storage process is relieved. However, it is still wise to increase your contributions whenever you can.
For example, if you receive an increase, you can easily increase your retirement savings. If you receive a bonus, it may be a good idea to spend at least part of that money on your savings. These adjustments may not necessarily be significant – the idea is simply to keep your savings on an uptrend.
An easy way to make sure you're saving more and more in retirement is to contribute a percentage of your income to your pension fund. As your income increases, your savings automatically increase. If you also increase the percentage of your saved income, you can gradually save even more. According to a report by Vanguard, an average worker saves around 10% of his salary in 401 (k) – including any employer contributions. Saving just one or two extra percentage points of your salary per year can add up over time.
Saving can be stressful, but does not have to be as challenging as it seems. However, by adjusting your mindset and changing your mind about your financial goals, you can save more easily.