Creating a Savings Plan for Retirement
So, you have a rough idea of how much you need to save each month to reach your
retirement goal. The next step is to budget your money carefully so you can set
aside the money now that can help you realize your dreams later.
Income. First you'll need to determine your total monthly income, including
wages, tips, alimony, investment income, and the like.
Expenses. Then you need to take into account your average monthly expenses,
including mortgage or rent, car payments, average food bills, medical expenses,
entertainment and the like. You'll also need to set aside an additional amount for
those expenses that don't come along every month, such as car insurance or taxes.
In order to make retirement planning a priority, include as an expense the amount
you need to save each month for your retirement nest egg.
If you find you have more expenses than income -- not an uncommon condition these
days -- you will probably want to consider cutting expenses, increasing your income
by taking another job, or maybe even both options.
Of course, another pitfall that affects many of us these days is debt and credit
card problems. If you feel that your monthly payments and the long-term interest
charges you're incurring are overwhelming, you may want to consider working with
a credit counseling service to help you set up a plan to work with your creditors
and reduce your debts.
But, no matter what your situation, keeping the discipline to save isn't always
easy. Experts say that it can be less of a challenge if you follow these tips:
Pay yourself first. Put away first the money you want to set aside for your
future goals. You may want to have a set amount automatically deducted from your
checking account or join a retirement plan at work that deducts money from your
Put bonuses and raises toward savings.
Make saving a habit.
Take a close look at your savings plan every few months to make certain you stay
Now that you know how to start the savings habit, the next step is to consider what
investments or plans can help you reach your long-term goals.
More About Reaching Your Goals...