Regular saving is the key to a successful retirement. Even more generally, regular saving is the key to building wealth. Period. Full stop. Do it early and often, and it can be relatively painless. Wait until the last minute, and you will be in trouble.
It’s really simple. Set aside a percentage from each paycheck to save for future needs or desires like a new (used) car, further education, vacations, etc. What’s difficult is determining how much you need to save.
Don’t have the discipline to force yourself to do it regularly? Then use the strategy I think works the best. “Pay Yourself First!”
Pay Yourself First:
Create an artificial environment of scarcity by “paying yourself first” (i.e., automatically withdraw money from your paycheck and checking account to fund investment accounts). In other words, before you pay for any of your “Needs” or your “Wants” or your “Guilty Pleasures” – put some money in your savings account. THEN start paying all those other people.
Get in the habit of saving money. Save at least half of every pay raise. You lived without that money before, so keep living without it. The end result of your financial plan should be systematic investment.
Bottom line: You are your most important creditor. To put it more accurately, your future self should be your biggest creditor. Pay the wo/man in the mirror first, automatically – without even thinking about it – before anybody else.
Thoughts? How much should you be saving?
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