Without a disciplined savings strategy there is no need for a globally diversified portfolio and the discipline to stay on track. The easiest way to save for retirement is to start early and make it automatic. You should pay yourself first each month. Seek help if you cannot stay disciplined to your saving strategy.
Separate Your Savings Goals
Instead of socking away everything into one savings account, set up a separate account for each of your savings goals. You’ll want these funds to be FDIC-insured, so you may need to open a few extra savings accounts at your bank: one for your emergency fund, one for your new-car fund, one for your vacation fund, etc. Any money you intend to save toward retirement, however, should be invested in a different, tax-advantaged accounts, as the yields with traditional savings-only vehicles are too low for a retirement fund.Set Your Savings on Auto-Pilot
For an utterly hassle-free way to bolster your savings, arrange for your bank to automatically divert a predetermined dollar amount from each of your paychecks into a savings account (or a few savings accounts). You’ll be surprised how quickly funds add up, and since it’s an automated process you needn’t lift a finger. For example, if you get paid twice a month and you have your bank automatically deposit $100 from each paycheck into your savings, in a year’s time you’ll have saved $2,400 — and that’s before accounting for any interest you may have accrued.
Give Yourself an Allowance
Instead of pulling out that well-worn debit card whenever you get the urge, withdraw a small amount of cash to pay for your weekly incidentals. These will vary from person to person and even from week to week, but might include things like a morning coffee, lunches or dinners out, treats and impulse buys. Stick to your guns — once your “allowance” is gone, it’s gone until next week. If you can see the financial impact of these purchases, you’re less likely to spend your hard-earned money.
Having a disciplined saving strategy is more important than any investment strategy.
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