By Charlotte Green
Take a moment to think about your future. What are your hopes and dreams? What are your long-term goals? What plans do you need to put in place to achieve them? Most of us have dreams of owning a home and traveling in retirement, but have you considered how you will afford to do those things? Mired in the day-to-day necessity to cover short-term expenses, it’s easy to lose sight of long-term goals. Short-term expenses could mean next month’s bills or buying school supplies for your kids. Longterm goals are about investing in yourself, achieving your hopes and dreams and planning for success. I wish someone had told me 10 years ago that this begins with investing in yourself.
So, what does it mean to “invest in yourself?” It’s as simple as smart asset allocation to ensure a secure financial future. Here are several areas we can be smart with our assets:
Saving for retirement.
An easy first step is to take advantage of employer matched retirement contributions. If your employer provides one, contribute at least up to the match amount. You’re leaving money on the table if you don’t, and because funds are automatically deducted from your paycheck, it’s one less thing to think about.
Having an emergency fund.
The recommended amount in an emergency fund is six months of gross income saved as a safety net. Start small and increase as you receive raises and bonuses. Saving for the big stuff. Home improvements and maintenance and higher education all come with bigger price tags. Having a dedicated savings account that builds over time will help you sleep better at night knowing that you’re prepared.
Creating a “Fun Fund.”
We all need a little fun in our lives. Working vacations into your plan can create memories that last a lifetime. Introducing these new expenses, or these “investments in yourself,” might create a shortfall in your budget. If that’s the case, start by examining your spending habits over a few months. It might surprise you to see how much money you spend on coffee, eating out, shopping or other discretionary spending. Immediate gratification doesn’t compare to the long-term happiness that comes with financial security. You could buy the shiny new car with a big monthly payment, but it will eventually need to be repaired and replaced. Contributions to retirement and safety net savings provide peace of mind.
The thought of getting all this done can be daunting, especially when you need to pay for things in the present. But, when approached with a plan, saving for the future is not only achievable, seeing progress is exciting and rewarding.
Are you investing in yourself and your future? If not, now is the time to start.
