May 20 is “Be A Millionaire Day” – what a great time to set your savings goals and make financial plans to feather that nest egg.
What’s holding you back from saving a million? You know, accumulating a million dollars is not terribly complicated. Simple idea, yes. But not easy to do. Because spending is easy…saving is not. That’s why the typical American lives paycheck-to-paycheck, actually spending $1.22 for every dollar he/she earns.
Spot your roadblocks to saving, investing
Seems there’s always something that stands in your path to saving more or investing? It’s unlikely that one or two big financial choices have stopped you from growing a nest egg. Instead, it’s our simple, day-to-day decisions of how we spend that actually stymie most of us. Our choices quickly become habits, and habits become a lifestyle, to which we become accustomed.
We want to save, but we just don’t. But evidently some have upped their savings game after hearing the dire warnings about meager nest eggs. Some recent surveys indicate American workers are feeling better about their financial health:
- Roughly 82% Americans are confident they will have enough funds to live comfortably in retirement, up from 75% last year, according to the Employee Benefit Research Institute’s (EBRI) 2019 Retirement Confidence Survey.
- And, 3 of 4 workers are now saving for retirement through employer-sponsored plans, such as a 401(k), according to the 2019 TransAmerica Center for Retirement Studies.
- A survey by Fidelity Investments was less optimistic, indicated that 75% of those surveyed felt “somewhat confident” or “not confident at all” with their financial preparation going into retirement.
So, we’re all over the board when it comes to saving. But it could be our confidence is based on needing nest egg amounts of different amounts.
Plan a strategy that works for you
If you want to give your retirement savings a boost, then “Be A Millionaire Day” is a good reminder to plan to succeed. Choose one of these roadblock-busters to try:
- Hard to make a savings deposit? Set up auto-deduction. You can add to your savings every month via an auto deduction from your checking account. Even small amounts add up, so pick an amount that works in your budget. No budget? Build a budget, baby!
- Your 401(k) contribution is small? Get the maximum “match” many employers add to your contributions. These accounts typically grow tax-free. So the earlier you start, the longer the magic of compounding will work for you. Your employer can provide details for your specific plan.
- No way to invest besides an employer plan? Open an investing account for a Roth IRA or IRA (Individual Retirement Account) because you can’t invest if you don’t have the right tools. Learn about investing and find educational resources at iInvest.org. Seek investments you understand – stocks, bonds, funds, real estate – and find some options you can research. When you develop an investing habit, you’re setting yourself up to accumulate a bigger nest egg.
- Debt takes too much of a bite? Pay it off. It’s hard to find money to save and invest if everything extra goes to repay student loans, credit card debt or a large mortgage. Melt that debt snowball. Paying debt off (and thereby paying less interest) is a good savings strategy.
- No money mentors? Build a financial team. If you don’t have a financial advisor, maybe it’s time to find one. Pay attention to all those initials and designations on an advisor’s resume, and match the expertise to your needs. A good place to verify an advisor is BrokerCheck.org.
- Hard to remember what to do? Stay on track with a simple financial checklist, especially if you are just beginning your career.
Striving for a happier Be A Millionaire Day next year!