February 03, 2011
Saving for a secure financial future shouldn’t require living on a shoestring budget. Undoubtedly, building a nest egg for your retirement can be difficult and often involves making sacrifices. But you don’t have to give up the things you love to ensure a comfortable retirement. Here are some steps you can take to plan for the future while making the most of today.
Assess your spending. Now’s the time to take a good, hard look at your spending habits and identify areas where you can trim your expenses. Sifting through your monthly bank statements and credit card records can help you highlight the kinds of cuts you can tolerate, and those that simply aren’t worth the sacrifice. Once you’ve pinpointed ways to save, such as scaling back on restaurant meals, be certain to redirect these funds into a savings account.
Establish clear financial goals. At what age do you hope to retire? Is world travel a part of your retirement plan? How do you wish to live after you stop working? These are important questions you should ask yourself to determine how much money you need to save today. Once you have a clear picture of your long-term savings goals, you can better allocate your earnings to day-to-day expenses.
Set up an Automatic Savings Plan. No matter how committed you are to saving for the future, automating your regular monthly contributions will ensure you stick with your plan. It’s free to set up an automatic savings plan from your chequing account into a savings or investment account. Your savings can benefit from compound interest, while you benefit from the discipline of a regular savings plan.
Pay down your debt. High-interest debt, such as charges on your credit card, can not only eat into your retirement savings, but it can cast a dark cloud over your day-to-day financial dealings. That’s because debt can add up quickly, causing you emotional stress and negatively impacting your credit history. Consider limiting yourself to one or two credit cards. And reduce your interest fees by consolidating outstanding debt with a loan or line of credit.
By following a few simple steps, you’ll find that you can save money for the future while still living the life you want today.