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By Mikayla St. Clair
Special to the Financial Independence Hub
One might think that planning for retirement while still young is a hindrance and a waste of time. However, the truth is that early planning has its benefits because you are not just planning for your old age but preparing for every other day you live as well. Planning is not easy; you need a few retirement tips on how to go about it regardless of whether you are just thinking about it or already have a plan. Here are seven appropriate for young savers
1.) Focus on financial stability
The real aim of planning for retirement is to ensure one has financial freedom in old age. If having a retirement plan below 30 years seems off, look at it this way, retirement is like saving to ensure you are financially stable. This is feasible through working out your expenses early; save up for the coming month’s expenses.
2.) Live within your means
Often young people tend to live lives that are way beyond their means. With this, most of their earnings go into acquiring things they may not need. As a result, some rarely have anything for saving. While the idea of getting anything you want sounds good, it may only be momentary and poses dangers in the future.
3.) Have a Plan
With a single monthly pay-check, budgeting may be tricky. There are bills to be paid, debts to be cleared, and much more. That is why you need a plan, plan your expenditures, and ensure to leave some for savings. How do you achieve this?
Cut back on unnecessary costs; if your workplace requires long commutes, consider moving somewhere closer. Spending those extra dollars or minutes on the road may not seem harmful, but they accumulate into a significant loss of wealth with time. Start small; often, the ideology people have is that each contribution must be in high number in saving. However, you may invest too much and exhaust everything. Start small, and eventually, things will build up.
4.) Don’t over invest in Cars
The idea of owning a car or cars is indeed dazzling; no need to wait in the subways or get a taxi. However, cars are costly, not only in acquiring them but also in maintaining them. If owning a car might be of dear necessity, the bottom line is to minimize the car’s expenditure. Avoid cars if one is just enough. Instead of selling it to cut on cost, consider parking it so you will not have to purchase a new one in the long run when you do need one.
5.) Invest
Once you’ve worked out your expenses and cut on the unnecessary ones, it’s time to put the extra dollars into better use. Most companies now have a 401(k) employer’s plan, invest, and ensure to match it. If your company doesn’t have the 401(k) plan, consider opening an IRA account [or in Canada, group RRSPs, Defined Contribution pension plans and RRSPs). There is also emergency funding; have one. Another strategy would be to pay off those outstanding debts by increasing your monthly payment plan. Avoid debts at all costs, primarily credit card debts.
6.) Do regular reports
It’s advisable to review how you have spent your income monthly, semi-annually, and annually. Make a list of everything that’s taking up your income and do away with what you can. If you get services for a particular provider, would you get them from a different provider at a lower cost? Consider such things.
7.) Have a financial friend
Making a significant decision, such as investments, is a huge thing. With a financial friend by your side, they will help you make those tough choices and avoid working blindly. Seek advice from a financial professional.
Conclusion
It’s wise to have in mind that you are living today with tomorrow in mind. Ensure your financial stability by investing and cutting down on those unnecessary expenses. Clear debts that may be weighing you down with repayment. Revisit your expenditure regularly and get a friend to walk with you on your financial journey. If you consider and implement the above tips, you are sure to make a difference in life. You will be many steps ahead towards gaining financial freedom at a tender age.
Mikayla St. Clair is a Public Relations Specialist for Legacy Wealth Management Group. She loves to write informative articles and share her knowledge with the readers.
