Many young professionals dream of early retirement, but they are unlikely to achieve it without proper planning. Many more claim that they cannot afford to save, but saving for a retirement is truly a matter of setting priorities and making a plan. Here are some tips.
The first step is to set your savings goals and make a budget. Start tracking your expenses to find out how you can save more.
Make your savings automatic. To make that change, it is often easiest to enroll in your company’s 401(k) plan. If funds go directly into your 401(k) and bypass your checking account, saving becomes a lot easier.
Live below your means. Many people do the opposite, constantly going into debt to own things they cannot afford. Instead, spend less than you make and invest the rest.
Make smarter investments. Your savings contributions can fly on autopilot, but your investment choices should be well-considered each time you make one. A diverse portfolio can provide a good return on investment without too much risk.
Create a fun fund. Make saving fun by purposely setting aside money for luxuries. Get in the habit of rewarding yourself for saving, rather than going into debt for instant gratification.