Saving up for retirement sounds like a daunting task, one which most people avoid for too long and later regret, but it’s necessary since people are now enjoying healthy lives well into their 80s. Do you have enough money reserved for your “golden years”, enough life insurance and a health insurance policy that offers good coverage? With an ever increasing life span and ever increasing health care costs you must prepare for the future; and it’s just as important if you are 25 or 65. Here are some ways that you can begin the journey towards financial freedom and a comfortable retirement.
Cutting Costs: While it’s not the most pleasant task to do, creating a balanced budget is essential. There’s no way to build wealth and have a secure future if you are in debt or going deeper into debt with each passing month. Write down your monthly income and then subtract all of your expenses from that. Any extra money should go to paying off your debt and increasing your savings.
If you are overspending, look to cut costs where you can. Do you really need the cable package with 500 world-wide channels? How about that gym membership? Look over your credit card statements and receipts to see where money is being wasted and make necessary changes. (There’s a huge ROI when you cancel cable)
Cheap Insurance Quotes: While saving cold, hard cash is vital to being able to lead a comfortable life in your later years, insurance plays a huge role in saving your hard earned money. It’s necessary for your financial health. Health insurance will keep your out of pocket expenses low. To be able to find cheaper insurance you need to spend some time looking over various plans as well as possibly making lifestyle changes. Premiums for smokers and overweight individuals are considerably higher than for those that lead active, nicotine-free lives. Wondering how to save money? For smokers, this would have to be one of the easiest ways to save money: by quitting smoking you save on cigarettes and on insurance since your health improves.
Saving More: Financial experts recommend saving ten percent of your income, minimum. Fifteen to twenty percent is a better number yet. If you aren’t in the habit of contributing to a 401k or similar retirement plan, start saving just one percent of your income this month. Increase that number to two percent next month and continue saving a percent each month. It’s a pretty painless way to get into the habit of saving.
Investing More: Once you build up a cash cushion it is wise to invest on a regular basis. Your risk tolerance will help you zoom in on the appropriate vehicles for investing your money. Investing for the future is crucial as current money market rates do not even match inflation, you do not want your money to lose value sitting in a savings account so it’s smart to protect yourself with inflation investment strategies.
Earn More: If you are deeply in debt or think you could do better with earn more income, than get another part time job. Deliver newspapers or pizzas. Start a business in your home or take a class in your career field so that you are better qualified at what you do.
Life insurance is necessary if you have any dependents that rely on your income, be it during your working years or retirement. Having a policy of eight to ten times your annual income is a great way to prepare. If you have a partner, they should also have a similar policy which will be of benefit to you when they pass away.
While this may all sound impossible to do, start doing one thing a day and within a month, you will find yourself in a much better financial situation. Pay yourself first to save for retirement!