It Is Not Too Late If You Are Behind on Savings
Speaking as someone who did not put a lot of focus on savings when I was first out of college and even into my later twenties, it is never too late to start saving, and if you were contributing a little and are behind on where you would like to be, the only time is the present. It is easy when you are young to live for the moment, but there is a feeling of panic when you get into your thirties and realized you do not have much saved. If I need to explain what does IRA stand for, then you need to sincerely pay attention to the tips laid out below.
Increase 401(k) Contributions
The first way place to start would be to, if you are not already contributing to a retirement account, to begin now. It does not have to be much now, a couple percent of your paycheck is better than nothing, but at least it will get you in the habit and begin to not miss the extra money. If you already are contributing, then at least do the max that your company will match, as you are just throwing away free money if you are not. It may seem like a huge chuck out of your check, but just think what you will have at the end of the year, and double it with your company’s matching contributions.
Look for Alternative Investment Vehicles
A 401k, Roth IRA, and Traditional IRA are all great investments! However, they all have income and contribution limitations. While I generally recommend maxing these investments out first, you definitely shouldn’t stop here. Consider opening an after-tax brokerage account online to start investing in some mutual or index funds. Or perhaps you want a slightly more aggressive strategy to grow your savings.
Direct Deposit to a Savings Account
If you manually have to transfer money into a savings account, let’s face it, it just will not happen. There is always something you want to spend money on, so if the funds are there, you are going to use them. It needs to be enough where it does not strap you from paying monthly bills, allotting yourself a little spending money in the end, but enough that your account will grow each month without dipping into it. Start with a few hundred a month and build from there.
Use a Raise to Increase Savings
If you’ve had a recent raise or promotion it can be exciting to start to see the extra on your paycheck, but before you go and get used to the money rolling in, increase your retirement and savings contributions. You have been getting by with your previous salary, so the bump in pay you will not miss by saving it. As you start to get used to seeing your retirement and savings accounts rise, you will feel the satisfaction of your hard work and will continue to focus on letting them grow.