If you’re currently working and not earning a large paycheck, retirement will possibly be one of the last things you’re thinking about at the moment. After all, it’s challenging enough just covering your daily expenses – so how on earth are you still supposed to start saving for retirement?
Believe it or not, there are a few things you can do that will help you start saving for this time of your life – despite being a low-income earner:
Saving Money should be Sacrificial
Several financial experts agree that saving money is a process that should feel as though you’re making a sacrifice of sorts. If this is not the case, they claim that you simply aren’t saving enough. Your main goal should be to save enough money that it forces you to alter your spending patterns.
Instead of going out for pizza or ordering in over the weekend, set the funds aside that you would have used for this and try making your own pizzas at home instead. In most cases, it’s the small things you do that will make the most difference in the amount of money you can save over time.
Most Individuals Spend more than they Realize
Now is the time to start making notes of every penny you spend. Did you purchase a soda at lunchtime? Coffee on the way into work? Takeout on the way home after your shift?
Make a note of every purchase and keep record over the next 30 days, and then go back through your list and mark each frivolous purchase. Afterwards, add up the highlighted purchases – this amount could very well have been put into a 401(k) or IRA instead of being frittered away.
Although doing this will cause you to forfeit a few of those ‘nice little extras,’ remember that these funds could be earning you interest over the next few years.
Look for Ways to Earn More Money
These days, there are more ways than ever to pick up a little extra income on the side. Wherever possible, see if extra shifts are available at your current place of employment. If not, consider caring for your neighbor’s children when they go out for the evening, offer to run errands for a small fee or even check with friends and family about walking their dogs to try earn that little bit extra.
If you’re crafty, consider making items to sell at a local market – or even offer music lessons if you’re good at playing a specific instrument. These might not sound like ways to make a lot of extra cash at a time, but every bit will help. Save everything over and above your regular income, and you might find that planning for retirement isn’t as impossible as you think.
Although earning low wages can make it challenging to compile a retirement plan, it’s not impossible to do so. Tracking your spending, cutting expenses wherever possible and finding ways to bring in that little bit of extra money will go a long way in helping to plan ahead for your golden years.Continue reading
While most parents take the job of raising their children seriously, many of them forget that teaching them about being financially responsible is just as important as it is to ensure that they learn good manners along the way. Children as young as three to four years old can be taught the basics regarding how to save and budget their money, and this go a long way in teaching them to work as effectively as possible with their money as teens and adults.
During the Earlier Years
It has been noted that children as young as the age of three years are able to understand the basic concept of how money works. For example, your three year old will not only know that money is required to purchase the toy they want; they do realize that Mom or Dad will have to go to work so they can get the money that’s needed. One of the easiest ways to start teaching young children about money is to show them how to count by using dollar bills.
If the toy your child wants costs $30, show them 30 individual dollar bills, have them count them out and explain that this is what will be needed to pay for the toy. The next step to take is to let your child know that you’ll provide them with one bill in exchange for them completing a simple chore or task around the house. Once they have accumulated enough of the dollar bills, they will be able to purchase the toy.
As your Child becomes Older
As your child becomes older, it will be normal for them to start wanting costlier toys, clothing and gadgets. For instance, your tween may ask for a phone and this can provide you with a great opportunity to teach them about the art of budgeting. In most cases, mobile phones come with their own monthly bills and part of the responsibility of having one can involve requiring your child to earn the funds to pay part or all of that bill.
If your children are close to the age of 16, you may already have had them asking you to purchase a car for them. If you’ve started teaching them early enough about saving and budgeting, your child may already have sufficient funds to pay cash for their first vehicle. This will also be the right time to teach them about the insurance that’s required to drive and to cover the costs of gas, servicing and maintenance over time.
In a Nutshell
When teaching your children about money from an early age, you’ll be doing the following:
- Teaching them that it’s necessary to earn the money needed to buy the items they want or need
- Explaining the value of money, making them less likely to spend unnecessarily later in life
- Showing them how important it is to set money aside for unexpected emergencies
- Teaching them how and why they need to budget their money to cover monthly bills as adults
When your children know how to spend their money responsibly, they stand a far better chance of succeeding in areas of their lives other than just finance. Contact us today if you would like to learn more about learning how to budget or how to teach your children more about money.