Take These Two Steps to Significantly Increase Your Savings

For most of us, focusing on budgeting and saving can feel like a drag. Budgets feel restrictive and take all the fun out of spending your hard-earned paychecks. Unfortunately, the lack of excitement most of us feel toward financial planning also leads to a lack of preparation and savings for retirement.

So, the first step toward a better savings rate is to define your goals. Take a few moments to think about your future and ask yourself how you want to spend your retirement. Doing this can help you to envision enjoyable ways to spend your savings one day, and help you feel more positive about financial planning. Now, instead of feeling like a chore, you have the feeling of looking forward to something fun.

Next, set up automatic contributions to your retirement plan. Think of how subscription services often work: Maybe you don’t even use Netflix all that often, or read those magazines, or use your gym membership. But canceling subscriptions is just one more thing to remember, and so you put it off. You’re spending money each month, and even though it’s coming out of your budget you don’t feel all that motivated to cancel those items. You just accept that it’s part of your budget now.

The same mentality can apply to your savings plan. Go ahead and set up automatic contributions to your retirement fund, and it will be one less thing you have to remember. But the real benefit is that you will now be committed to saving for the future, and you will work the rest of your budget around this expense.

It’s a mentality of paying yourself first, and it really works! Establishing automatic contributions is the best way to prioritize your savings, and the best part is that it’s so easy to do.

For more help with planning for retirement, give us a call. We can help you decide how much to contribute to your retirement plan each pay period, and create a solid strategy to enjoy those savings in retirement one day.