1. Overcome the Fear of Investing
What do Americans think about the most? Money and work top the list, according to GOBankingRates’ 2015 Life + Money Survey. In particular, many people are afraid they’ll always live paycheck to paycheck, be in debt forever or never be able to retire.
Interestingly, for many workers, it might be fear itself that holds them back from investing for retirement. In GOBankingRates’ “7 Fears That Keep You Poor,” Certified Financial Planner and author of “Rich Habits,” Tom Corley, said, “The poor allow the fear of failure to put the brakes on pursuing their dreams.”
The first step to overcoming those fears? “Having a budget and a good financial plan,” said Derek Gabrielsen, a chartered retirement planning counselor with Strategic Wealth Partners. As you approach your dream of a lucrative retirement, come to terms with the fact that you might need to set limits on spending and invest your money — which inherently puts you at risk of losing it.
2. Establish a Budget for Retiremen
Earlier this year, GOBankingRates set out to uncover just how much Americans need to retire. Turns out, how much you save for retirement has less to do with your income than with your spending habits.
“I have met people who make $30,000 take-home per month and still have no retirement savings,” said CFP Jeff Rose of Good Financial Cents. “Keep your lifestyle in check and make sure you are putting money away every month.”
In “How to Create a Budget for the Year That You’ll Actually Keep,” you can find an easy-to-use 12-month budget worksheet, as well as tips on how to:
- Track necessary expenses
- Find out where your money is going
- How much money you have left each month
- Set and stick to a budget
As you consider your expenses and income, look for opportunities to cut back on spending month to month. Set reminders for yourself to ensure you’re staying on track and create wiggle room within your budget for unplanned expenses.
Most of all, as you learn how to budget for retirement, be forgiving of any shortfalls.