Whether it’s a home project, credit card loans, or the dreaded retirement savings that need to be set aside, the demands seem endless.
A comfortable retirement is something everyone desires; after all, most people don’t picture themselves working forever. With that being said, no one wants to live on a bare bones budget in their 20s and 30s to live in comfort “someday.”
So how do we do it? Save for retirement without forgoing the small pleasures in life?
1) Set It and Forget It
If you don’t currently save money for retirement, it’s time to get started!
This may initially impact your lifestyle, but the longer you put off saving for retirement, the more “shocking” the lifestyle adjustment will be when you finally pull the trigger.
Cutting your expenditures by 10% today and diverting it to retirement fund is a lot less painful than cutting your expenditures by 50% later on–which isn’t unrealistic if you have to “catch up” down the road.
My advice to you is to “set it and forget it.” Set up automatic retirement contributions and get used to life without that additional income. It may be hard to imagine right now, but eventually you’ll get used to it ideally “forget” about it.
Fast forward a few years. Check your retirement savings. Voila! A nice nest egg.
2) Save Raises, Bonuses or Unexpected Income
The second way to save for without sacrificing is by avoiding lifestyle inflation. This can be effectively accomplished by saving raises, bonuses, or unexpected income.
Let’s say you get promoted with a pay increase of 6%. Instead of improving your lifestyle with these additional funds, consider diverting some or all of the increased income to your retirement account.
A good way to maintain this balance is to take a page from Donna and Tom and “Treat yo Self” occasionally. Once or twice a year, splurge on yourself (whatever that means to you). Saving that extra income isn’t so difficult when you have occasions to spend your hard earned money.
3) Create New Income Streams
The final way to save for retirement while keeping your cushy life is by creating new income streams.
While creating additional income is easier said than done, it can be one of the best ways to improve your finances.
Find something that you can do outside of your full-time job. There is virtually an unlimited number of ways to make money “on the side” including freelance writing, teaching lessons, or starting an etsy shop. Creating new income streams is extremely beneficial because it’s all “in addition” to your current lifestyle; you don’t have to find funds within your current budget for savings goals, instead you can divert new funds towards those goals
While these ideas are a good start, you should also spend time learning about how much you should be saving, current inflation dates, and compounding growth.
An easy way to do this is by asking yourself these 4 retirement questions. Once answered, you can formulate a plan to guide you forward into your new (but still cushy) life.