If you’re dissatisfied with your earnings, you will never be satisfied with how much you could save. For most, it seems that every time you receive a paycheck, you feel like the money is just meant for the next two weeks, and not the next 50 years.
Let’s use grocery shopping as an example. As we unload groceries into our pantry and refrigerator upon arriving home, we know that we can’t consume all the food in one day. We know that it should mostly last until we re-visit again the grocery store. (That’s the reason our mom used to yell at us for opening a new pack of cookies within minutes of arriving home from the store.) This is how our demand for food could wipe out its supply.
Now, imagine that you were told that you had to set aside the food for potentially a thirty-year period in which you didn’t need to visit the store. Seems impossible, right? This is because our culture is of consumption, not retention. We always tell ourselves, that ‘consume’ and there will always be more.
Can you imagine how do people will financially survive once they stop working? In the United States, retirement savings at the individual level has declined in proportion to the number of people covered by benefits like pension plans.
Here is how you can help sustain your savings:
Pay back the family loan
For your entire life, your career earnings are your entire pool of financial resources. Each time you are paid, you should make a wish list what you need right now. Apart from the basics like food and shelter, the other lifestyle choices are created by you. These choices then become habits, and these habits become the reason why you could be falling short financially when you compute your career earnings.
If you have been taking our advice, you may be legally avoiding or defer taxes while simultaneously retaining and even growing your earnings. 401(k), IRA, Roth IRA, and other qualified retirement plans. These plans can do that while you can keep your earnings in a tax-sensitive manner.
Don’t use Roth IRA for startup expenses-except like this
Don’t wait for the day you regret your savings. Calculate your career earnings today, and ask yourself “Am I saving enough or eating all of the chips on Sunday?”
Should you have any questions related to your finances, please visit us at www.unitedcounselors.org.