There are spenders and there are savers. Spenders are individuals that cherish material things more than money, and savers are the opposite. Whether you’re a spender or a saver, saving money is important and here’s why.
Don’t Think the Government Will Save You
No matter which end of the choice that you sit, saving money is a necessary. Our government is constantly extending the retirement age and not keeping social security payments relevant with inflation due to poor mismanagement. The less you accumulate over time the greater the government’s influence in your life in the future, and the word luxury doesn’t exist at the governmental level.
Saving money is really quite simple. It comes down to getting a portion of your money out of your hands and into a place where you won’t monkey with it. Yet, the struggle of parting with funds we think we may need to live on can make this process seem hard.
The First Step
The real first step of saving is budgeting, and cutting out things you really don’t need, or where you can find ulterior solutions. This could be making your lunch a few days a week, or exercising outside instead of the gym, or riding a bike to work instead of using a car. The other option is to have a side hustle where you earn your savings money. In either case it means planning and budgeting, and sticking to it.
Once you lay out the plan the next step would be to have a portion of your paycheck automatically sent to your savings or investment account before you see your paycheck if you can. If you don’t physically have to make the transfer and it happens automatically it gets done without excuses. After a while you won’t remember that some of your money is being taken out of your paycheck.
Take Advantage of Your Company’s Plan
Most companies offer their employees some form of savings plan such as a 401k where they can deposit money monthly. These accounts will usually provide you with a few investment choices which are more than adequate. Ignore the account, and yes it will go up and down with the economy, but remember investing has been around for more than 100 years, and as long as capitalism and governments exist this usually means inflation, and assets such as investments will appreciate.
Most companies will contribute to your company retirement plan outright or as a match which only increases the amount of money you are really earning. These types of plans make it easy to put money away. They are the best and first method you should use.
If you get your money in chunks or are an independent contractor or owner of your own business it is key for you to plan ahead and determine what you can put away upfront. You can set a reasonable yearly or monthly income amount, and everything above that amount goes into savings as a suggestion. There are IRS approved retirement plans that are available to individuals to use where you can deposit funds from your earnings for future growth.
Remember with inflation, dollars will lose value over time, so the best place to keep up with inflation is investing in a business that sells products or services and gets paid in current money, or owning income generating property with fixed mortgages where rents can be increased are options.
Don’t Bet Your Future on Silly Thinking
No one can predict the future and everyone will age and die. It’s reality and the fountain of youth hasn’t been discovered yet. Thinking that today is more important than tomorrow just because is outright silly. You could be that person who proves the statistics wrong and lives way beyond the mortality tables. Just look around and you’ll see many elderly who thought that way, and are struggling.
Reality is Tough
I spent some time being exposed to many different retirement homes for the elderly throughout Southern California. They ranged from plush and expensive to low income subsidized facilities for those with little money. These low income facilities usually had concrete floors and multiple people in one big room with metal framed beds. No privacy, people coughing, and many unable to get out of bed. I would bet that few of the people in those facilities ever thought they would end up there.
No matter which type of individual you are, get started early and don’t ever stop. Remember what you spend today is the cost of your retirement. Spend less and you’ll get more retirement time and benefits later on in life, and you’ll be comfortable with the lifestyle since you’ve lived it. Spend more today and you’ll have less retirement time and less benefits when you can’t earn more to cover those costs. Spend too much and you could end up living off of the government. Ever see a politician issue a bonus check to a retiree?
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