We all know that we should be putting money aside for retirement, but too few of us have accumulated the nest eggs we will need to see us through a comfortable retirement. One of the biggest complaints workers make is that they simply cannot find the money to invest. After the monthly bills are paid there may simply not be any money left over for saving and investment. While that may be true, there is a way to force yourself to save. When it comes to saving and investing, getting started is often the hardest part. Once people do get started, they often find that saving money is not the insurmountable challenge they once imagined.
One of the most effective ways to get started is to treat your savings as just another deduction. When the deductions for our taxes or health care premiums go up, we are forced to make due with what is left. This automatic investment principle works the same way. By taking the money off the top, before you get a chance to spend it, you are forcing yourself to live on less than what you make, while at the same time putting money away for a comfortable and secure retirement.
Split Your Direct Deposit
One of the easiest ways to save automatically is to split your direct deposit. Ask your HR representative to direct a portion of your paycheck to your savings account. If it's not in your checking account, you won't be tempted to spend it, and you might not even miss it!
Auto Transfer
Have your financial institution automatically transfer a predetermined amount from your checking to savings, or schedule the transfer yourself through your bank's online or mobile banking.
Round-Up Savings Account
Many financial institutions allow you to round up your debit card purchases to the nearest dollar (or more) and automatically deposit the extra amount into a savings account. Independent Bank's i-Round Up Savings is a perfect, proactive option for customers holding both an i-bank Checking account and a Savings account.
Invest in Your 401(k) Plan
The 401(k) plan is the ultimate in automatic investments. Once you sign up for the 401(k) plan at your company the money is automatically deducted from your paycheck, making saving for retirement fast, easy and automatic. And since that money comes off the top before it is taxed, you get more bang for your buck. That means participating in your company’s 401(k) program may not reduce your paycheck as much as you fear.
Another advantage of participating in your company’s 401(k) program is the company match. Many companies will match a percentage of the amount their employees contribute, so not contributing is like leaving free money sitting on the table.
Putting your savings on auto-pilot is one of the best ways to start investing for the future. The sooner you get started with your investment program the more you can accumulate, so why not get started today?
