We hear it quite frequently…”I just can’t afford to put aside 10% of my paycheck towards retirement.” Or sometimes…”We are just barely getting by on the income we have right now.” If you find yourself in this position then I highly encourage you to take a look into Dave Ramsey’s tools and specifically his Core Financial Wellness Program.
But if this article reaches you before you take your first full-time job and before you have car payments, credit card debt, etc. I implore you to implement the 10% Savings Trick. It is incredibly simple in its concept but massively important in its execution. It works like this…The moment you hear what the annual salary offer is (spoken or written) from your first employer – trick your brain into hearing (or seeing) a figure that is 10% less than the actual amount. If you think you hear $60,000 – immediately convert that to $54,000 in your head and base your decision on that adjusted figure of $54,000. Should you decide to accept the offer – in your mind, you will be accepting an offer of $54,000.
Clearly, what this little trick will allow you to do is instantly start socking away 10% of your income towards retirement. Trust me, there will NEVER be a time when saving for retirement is easier. In the future you may be dealing with mortgage payments, raising kids and all their expensive activities, saving for their college, medical expenses, supporting aging parents, starting a business, etc. If you can get yourself into a habit today of living on 10% less than what you are actually making you are setting yourself up for a lifetime of adequate savings.
Remember, odds are that if you are reading this article you are working in a job that will NOT pay you any kind of pension when you retire. If you think you will need more than a couple thousand dollars from Social Security when you retire – you better dang well start saving yourself…no one else is gonna do this for you. It’s totally on your shoulders to ensure a financially secure future. Start with the 10% Savings Trick. Your future retirement lifestyle thanks you!