Leftovers
“If money be not thy servant, it will be thy master.” – Francis Bacon
As we sit fat and happy from yesterday’s celebrations, thoughts turn to leftovers. Many people budget with a similar mindset. They are content with a financial plan that depends on the leftovers from their paycheck, which for most Americans is minimal.
Lewis Schiff of the Armchair Millionaire writes, “There is a way to put money aside without really noticing it. It's called “Paying Yourself First.” When you pay yourself first, you send 10 percent of your paycheck (your take-home pay) to a separate account before you have a chance to spend it. Do this on top of your regular retirement investing, and you’ll realize great wealth over time.”
“Instead of trying to live by a budget where there’s something left over at the end of every month, your bank or broker can set up a plan where money is deducted from your account each month and sent to your investment account automatically. It’s called an automatic investment plan.”
David Bach, author of Start Late, Finish Rich, says, “The government pays itself automatically each time you get paid. Taxes are taken out of your salary before you even get your check. You should arrange for money to be taken from your salary and put into a retirement account before you ever get to see it. Most employers make this easy through a 401(k) plan. Sign up and you're well on your way to retirement.” If Uncle Sam can do it, why can’t we?
“Most people today only save about 4 percent of their income. That means they are only working 22 minutes a day for themselves. If you’re serious about finishing rich, you need to change this behavior. By making small, incremental improvements to your savings, you can win big.”
So what prevents people from saving… even in the smallest amounts? Fidelity.com lists three reasons:
Paying Off Debts
“Paying off debts, especially charge accounts can be critical to your long-term financial future. However, many people just replace old debts with new ones. If you wait until all your debts are paid off to begin saving for retirement, you may jeopardize your chances of achieving your retirement goals.”
Raising Kids
“Raising kids is an expensive and long-term proposition, particularly if you plan to help them with college costs. Remember, your financial future and retirement are priorities too. If you wait until your children have graduated from college to begin saving for retirement, you may have problems meeting your retirement goals.”
Living Expenses
“It’s often difficult to find the extra money in the budget to set aside for savings. But consider that some of your current earnings don't really belong to you. Instead, they belong to the older person you’ll become. Developing retirement goals now and starting to set aside a small amount regularly can go a long way toward making sure you have a comfortable retirement.”
Retirement planning is crucial. As I have said before, “The only thing worse than being young and poor is being old and poor.” Delay some gratification now and benefit later. In thirty years, I definitely do not want to be working to cover my living expenses and trying to survive by eating leftovers.
As we sit fat and happy from yesterday’s celebrations, thoughts turn to leftovers. Many people budget with a similar mindset. They are content with a financial plan that depends on the leftovers from their paycheck, which for most Americans is minimal.
Lewis Schiff of the Armchair Millionaire writes, “There is a way to put money aside without really noticing it. It's called “Paying Yourself First.” When you pay yourself first, you send 10 percent of your paycheck (your take-home pay) to a separate account before you have a chance to spend it. Do this on top of your regular retirement investing, and you’ll realize great wealth over time.”
“Instead of trying to live by a budget where there’s something left over at the end of every month, your bank or broker can set up a plan where money is deducted from your account each month and sent to your investment account automatically. It’s called an automatic investment plan.”
David Bach, author of Start Late, Finish Rich, says, “The government pays itself automatically each time you get paid. Taxes are taken out of your salary before you even get your check. You should arrange for money to be taken from your salary and put into a retirement account before you ever get to see it. Most employers make this easy through a 401(k) plan. Sign up and you're well on your way to retirement.” If Uncle Sam can do it, why can’t we?
“Most people today only save about 4 percent of their income. That means they are only working 22 minutes a day for themselves. If you’re serious about finishing rich, you need to change this behavior. By making small, incremental improvements to your savings, you can win big.”
So what prevents people from saving… even in the smallest amounts? Fidelity.com lists three reasons:
Paying Off Debts
“Paying off debts, especially charge accounts can be critical to your long-term financial future. However, many people just replace old debts with new ones. If you wait until all your debts are paid off to begin saving for retirement, you may jeopardize your chances of achieving your retirement goals.”
Raising Kids
“Raising kids is an expensive and long-term proposition, particularly if you plan to help them with college costs. Remember, your financial future and retirement are priorities too. If you wait until your children have graduated from college to begin saving for retirement, you may have problems meeting your retirement goals.”
Living Expenses
“It’s often difficult to find the extra money in the budget to set aside for savings. But consider that some of your current earnings don't really belong to you. Instead, they belong to the older person you’ll become. Developing retirement goals now and starting to set aside a small amount regularly can go a long way toward making sure you have a comfortable retirement.”
Retirement planning is crucial. As I have said before, “The only thing worse than being young and poor is being old and poor.” Delay some gratification now and benefit later. In thirty years, I definitely do not want to be working to cover my living expenses and trying to survive by eating leftovers.
posted by Nina Smith at 6:24 AM
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