Reinforce Your Savings Habit Through Automation
Even though you may have found your motivation to save, it doesn’t mean that the habit of saving will be easy to maintain, as a lot of older folk have found. One month you’re feeling great about your savings and then the next you have to push them aside in order to purchase something you’ve been eyeing for a while. Then, the next month you’ll ‘forget’ to account for the previous month’s dip in savings, and so on.
So, if you automate your savings, this will save you the trouble of tricking yourself into not saving. You can do so by scheduling automatic transfers from your checking account on payday. That way, you’ll have no choice but to fit the rest of your expenses into a budget.
You can do this for both an IRA and a 401(k), but if you don’t have access to a workplace plan, then it’s definitely time to think about setting up your own IRA.
Take it a step further and each time you get a raise, make sure to add the additional money to the automation process!
