Grandchildren and Debt
Retirement is a funny thing to think about. Either you feel like you have plenty of time to consider retirement, or you feel like you’re late in the game and your target age to retire is just around the corner. As well, you may find yourself needing to start over after your situation has changed (divorce, for example). Regardless of your age, if you haven’t started saving for retirement, now is the time to start.
Here’s a little bit of sage advice to make you wiser as you get older:
Every little bit helps – It’s common to look at your income and not understand how you’d ever be able to put any additional funds towards a nest egg. The reality is, every dollar saved today is one less you need to worry about in the future. There are plenty of ways you can save small amounts of money that add up over time. Some banks will let you round up all of your purchases to the nearest dollar, putting the additional change in a savings account (for example if a coffee costs $1.75, you’ll be charged $2.00 with .25 cents going to a savings account.) If your bank doesn’t offer this option, commit to putting all of the change in your pocket or car at the end of the day into a jar. Try setting up an automatic bank transfer. Only $10 per week will net you over $500 per year, and you will barely notice it if it’s done automatically. Talk to your bank about options they have to help you save better.
Set a goal for these funds. Remember, your first goal for these is emergency savings and then you can focus on retirement.
Clean up your debt situation – It’s difficult to save anything if you do not have a realistic budget and financial plan. You need your debt to be managed with a plan if you want to start saving. The sooner you make a plan and follow it, the sooner you’ll be able to see significant savings towards your retirement.
Much like a savings plan, paying off your debt requires strategy. If you’re simply making minimum payments, or using new debt to pay old debt, it’s time to get on track and get yourself in the black. Quite literally, your future depends on it.
Invest your savings – Putting your money into a savings account is great if you’re saving up for in-the-near-future purchases, but if you’re saving for the long term, it’s best to invest your savings and let that egg see some growth. There are some great options available. Seek a financial professional with an accredited financial institution to help you choose the best savings option for your short term and long-term goals. There is no right or wrong solution, but be sure to do your research and try and consult with a professional to help determine what is best for your situation.
Apply your new found good habits to your retirement saving strategy – Retirement may seem daunting, but with a few changes and some dedication, it’s most certainly in reach. If you’re finding debt is getting in the way of saving for retirement, or if you need some advice on how to get your finances on track, meeting with a professional is a great solution to your problems.