If you are like me then saving for retirement is usually not what I am thinking about all that much. I like many people in my generation are more worried about what my many is going to get me today rather then putting some of that money away for retirement, emergencies and medical care. I think I say this for most people that it is really easy to forget to put money away for the things a just mentioned so I have put together some simple tips for saving for retirement and other future expenses.
Setup retirement, saving, and insurance accounts
There are lots of strategies but the keys are to have a regular amount put into a retirement account, have an emergency fund, have ample life insurance, and low-cost health insurance, and take advantage of a 401k match at work if you have one. These are important to get early in life because you get the power and benefit of time and compound interest. To give you an idea of this at work if you put $250 into an individual retirement account (IRA) for forty years at average 7-10% interest annually it will grow to between $656,000 and $1,581,000 doubling every 7 to 10 years. But if you calculate the total amount you put into your account it is $120,000 the rest is the interest you have earned. Just remember that high risk has to equal high return, a good mix of investment types is good and do not put everything into one place.
Make a budget and stick to it
I know we have all heard that we need to make a budget and have a plan on where we spend our money but this really is the best way to save money for retirement and for emergencies. There are many great free websites that allow you to see all your accounts in one place and to make and track a budget it makes budgeting easy. And for those of you who think that budgeting is restrictive it really is not. I like to think of the kite analogy: the only way it can stay in the air is by have a string tied to it.
Look for savings and put that money into your saving accounts
There are lots of ways to save money these days with online coupons, buying in bulk, or even just using the local library instead of buying new books. The important trick is to capitalize on those savings. If you were budgeting to spend a certain amount on something and it ended up being say 10% from an instant rebate or something instead of spending that money you can put that into one of your investment accounts and watch it grow. We had this exact experience while going to see an outdoor show this summer and a person who had two extra tickets gave them to use just as we were about to buy them so putting that money we would have spent into savings is like free money. You can do the same thing if you do not spend as much on one of your budget categories it is a great way to save.