If one of your New Year’s resolutions is to take control of your finances and save more for retirement and other financial goals, the steps below can help:
Review your current situation.
The first step toward financial improvement is assessing your current situation. That means checking the status of your financial accounts, totaling your assets and debts, and reviewing your monthly cash flow. This will allow you to identify areas for improvement and opportunities to save more.
Set your goals.
Retirement, emergency funds, and college funds are just a few of the important things vying for your savings dollars. Take the time to prioritize them so you will be able to allocate savings appropriately to each.
Write down and share your goals.
The act of writing down and sharing your goals with someone you trust has been shown to improve the chances of success in meeting goals.
Spend less than you earn.
This is the simple trick for saving for any goal. However, it’s not easy to put into practice if it’s hard to make ends meet or you find it difficult to resist spending whatever money you have on hand. Here are a few ideas that may help:
- Set up a spending and saving plan. Track your expenses to determine how much you are spending, then set up a budget by reviewing income, expenses, and the categories you plan to save for. Don’t forget to include saving for an emergency fund; this helps avoid drawing on expensive credit or retirement savings if an emergency arises.
- Automate your savings. A retirement plan account is typically set up as an automatic withdrawal from your paycheck. You can also save on auto-pilot for your other goals by setting up a separate account for each, and fund them with automatic monthly contributions from a bank account.
- Track your goals. Regularly checking in on your progress toward your goals can help motivate you to continue, You can also see where you need to make adjustments as your income, expenses, and goals change over time.
- Treat yourself. Celebrate your success by treating yourself to a reward when you meet your intermediate and long-term goals.
It’s never too late to get started. The earlier you start saving, the more your money can work for you.
Aldrich Wealth helps our clients protect and grow their financial assets for the future by helping them make smart financial decisions today. If you would like assistance in determining your retirement needs, please call Aldrich Wealth at 888-299-3102 to speak with a financial advisor.