Get A Jump On Retirement Part 2

Get A Jump On Retirement Part 2



Get a​ Jump On Retirement- Part 2
Welcome to​ the second article of​ my series .​
This article is​ about paying yourself first .​
You could probably find hundreds of​ articles on the internet about this very topic .​
It is​ a​ common theory used by many financial advisors .​
It is​ an​ important theory that is​ worth discussing.
The reasons for paying yourself first are easy to​ figure out, you get to​ build a​ savings account, you get in​ the habit of​ saving, you build your emergency fund, and more .​
In my opinion, the most important reason to​ pay yourself first is​ to​ force yourself to​ live below your means.
If you get in​ the habit of​ saving a​ percentage of​ your check every week, or​ whenever you happen to​ get paid, you will be on a​ good path .​
Of course, don’t put 10% of​ your check in​ the bank and then go spend $2000 on a​ credit card, that defeats the purpose .​
Anyone that reads about personal finance probably knows the average American not only has no savings account but they have a​ negative savings .​
That simply means they spend more than they make .​
If they got injured and were out of​ work they’d have trouble paying their bills for one month, never mind more .​
The average credit card debt in​ a​ household is​ nearing $10,000 .​
The combination of​ no savings and increasing credit card debt is​ financial suicide.
When I​ used to​ work in​ an​ office people would come to​ me to​ discuss finances on occasion .​
Maybe they needed a​ new car and wanted to​ know if​ they should lease or​ buy, maybe they had questions about how to​ invest their 401(k) dollars .​
There were a​ number of​ reasons .​
But, we always got on the topic of​ their 401(k) regardless of​ the initial reason they came to​ me .​
I​ still can’t believe how many people were not putting any money in​ their 401(k) or​ were putting the amount the company automatically set up for them, 3% .​
They had no idea what they were invested in, some didn’t even know how to​ log into check their account and find out.
I would ask them how they didn’t know these things or​ why they weren’t putting in​ at​ least the 7% the company matched .​
Their response, I​ can’t afford it .​
I​ would then explain it​ didn’t really change their check much because it​ was pre-tax, etc… The sad part is, if​ they couldn’t afford putting money in​ their 401(k) you knew they weren’t saving any money on their own .​
These people all made over $40,000 a​ year, most were above $50,000 .​
They were not even paying themselves via their retirement savings.
I wonder what they will do in​ 30 years when they have a​ fraction of​ the retirement savings they could have had .​
The real question is, can they (or you) afford NOT TO save? If you live your life pay check to​ pay check when will you ever be able to​ retire? There will always be a​ nicer car to​ buy, a​ bigger house, better clothes, and fancier vacations .​
At some point you need to​ draw the line because if​ you don’t you’ll have a​ massive mortgage payment when you hit 65 and you will never be able to​ afford to​ retire .​
After all, you hardly saved any money for your retirement while you were spending all this money.
If you are one of​ these people that spend every penny you have then at​ least buy yourself an​ annuity .​
You can make monthly payments to​ it​ and when you retire you will at​ least have a​ guaranteed income for as​ long as​ you live .​
Unless you are over fifty years old you can’t even count on Social Security anymore.




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