Jumpstart Your Savings
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Developing self-control of your spending is a basic step in cutting the cost of living. Some families automatically seem to know how to get what they want, even on a limited income. But others need help in managing their finances to get what they need and want. Research shows that people worry more about money than any other family problem. If families communicate and everyone understands what the financial situation is, there will be greater cooperation. Here are a few tips:
- Take a look at your expenses. If you've got a budget, you're a step ahead of the game. If you don't have a current spending plan, it's time to start tallying numbers, from groceries to entertainment, mortgage or rent, utilities and so forth.
- How low, or high, you set your retirement age depends on a number of personal factors. If you plan on swapping that briefcase for a tennis racket at age 60, you may be in for a case of sticker shock. It's not just that you'll likely have two or three decades of retirement, but financial resources may be greatly diminished if you retire early.
- Project today's costs into the future. Don't panic, It's not tough to do as most retirement calculators simply let you plug in an inflation rate. Historically, that's been around 3 percent. Follow the advice of your financial advisor if you one.
- If your savings lag behind your spending requirements, take comfort in the fact that you can take steps to close the gap and get on track. More than half of those who've figured out how much they'll need in retirement have been motivated to contribute more to a retirement plan or make investment changes, according to a study by the Employee Benefits Research Institute.