Happy Tuesday Everyone and Happy Valentine’s Day. I wish you all lots of love today, and if you aren’t in love then I wish you lots and lots of chocolate. Today we are continuing on with our next Budget themed post. Today we are discussing how to fit saving into our budget, more specifically we are discussing why it’s important to always make room in our budget for retirement savings. I know that our budgets may be tight with everyday living expenses, but it’s still very important to save for retirement.
Here are 5 Reasons and Strategies to Help You Save for Retirement:
This is known as the Pay Yourself First strategy. Before we pay our monthly bills we should set aside a monthly dollar amount to save for our retirement. I am definitely not saying that we should save instead of pay our bills, but we should definitely always try to fit saving for retirement into our monthly budget. Even if we can only afford to save $25 monthly for retirement, we should definitely do it.
Be Sure To Diversify
The longer time horizon that we have to invest the more risk we can take, and therefore the more we can diversify our retirement portfolio. When we invest for the short term we cannot take too much risk because we may not have enough time to gain back our potential losses. However, when we invest for retirement we have a long time to invest and therefore we can take some more risks and diversify our retirement savings.
We Can Lower, But Never Cut
If we ever find our monthly budget getting too tight and we decided that we have to eventually make cuts in our monthly spending we should never cut out our retirement savings. We should never break a good habit; therefore we should always continue saving for retirement. We can always lower the amount of our regular contributions, but we should never cut out our retirement savings completely.
Revise Your Budget
We don’t need to subscribe to monthly magazines, and we don’t necessarily have to subscribe to the biggest cable package; but we should always contribute to our retirement savings plans. Saving $10 per week on our grocery bill, our public transportation costs, or our utility bills can all add up to a monthly retirement savings plan contribution. Sometimes people think that we have to save a lot of money each month or we shouldn’t save at all; however this is not true. If we start saving $25 per month at 20 years old, by the time we are 60 years old we could have a total savings of $65,620.
Everyone Has to Retire
Not everyone will buy a house, not everyone wants to travel, and not everyone will get married; but everyone gets older and everyone has to retire. It is a smart financial strategy to save for something that is guaranteed to happen. We may have various short term goals, and we can save for those goals eventually; but retirement is inevitable and therefore everyone should always be saving for retirement one way or another.
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