The best thing you can do for yourself when preparing for retirement is to start saving early, and if you have not started, the next best thing is to start now. However, it is not enough to start saving if you are not equipped with the best approach to it. Note that whatever strategy you adopt may still need adjustment to fit your unique financial journey.
Consider the following tips to help you save for retirement regardless of your current financial status.
Reduce your spending, but don't deprive yourself
To be honest, frugality is not as simple as it sounds. The best way to avoid falling back into regrets of overspending is to note what truly matters to you, and allocate funds to them according to priority while cutting down those that are there to only serve your pleasure.
You can also initiate the idea of paying less by negotiating certain bills, looking out for discount sales, and opting for used cars when making a purchase. Another way of paying less for items is buying them in bulk, some goods are cheaper when you buy them in bulk compared to smaller portions of them.
Avoid the temptation of keeping up with the Joneses. Be true to yourself about your financial status, set goals and follow through regardless of any trend or social influence that may speak contrary to your chosen lifestyle.
The best way to avoid falling back into regrets of overspending is to note what truly matters to you, and allocate funds to them according to priority while cutting down those that are there to only serve your pleasure.
Avoid spending future raises and bonuses
Your raises and bonuses are not for instant gratification purposes only. If you have to reward yourself with bonuses, be modest about it and divert the larger chunk into viable investment vehicles.
You can also divert some percentage of the bonuses to paying off debts, and emergency funds that could eat into your main investment or retirement savings account in future.
Learn how to cook
This may sound out of place, but the simple act of learning how to cook can save you a lot of money for retirement. Food is one of the major expenses that takes a huge portion of our income, and it becomes worse when you do not make this food. You are likely to spend double your budget when you eat out compared to when you cook. It may seem insignificant when it is an occasional event but summing up a consistent habit of dining out over a year makes the difference in your finances.
Also, note that you are more assured of healthy homemade meals which impact your health and reduce your medical expenses in the long run during your retirement years.
Have a Pension Fund or Retirement Savings Account (RSA)
When saving for retirement, pension funds remain one of the most strategic financial assets to secure your future—a pension fund otherwise known as Retirement Savings Account (RSA). With RSA, you set aside some money from each paycheck and deposit it with a Pension Fund Administrator (PFA) for a financially stable life in retirement.
To open an RSA, visit any Oak pensions' office nearest to you to pick up an RSA form or download it online at www.oakpensions.com, fill the form, and return it to the Oak Pensions' office. If you cannot pick up the form at any of our locations, send us an email at info@oakpensions.com or call our Marketing Manager on 09087448661 to request a visit by an agent for registration.
Simply get started
With the plans and guidelines spelt out so far, it all boils down to simply starting. Without it, there will be no difference in the end. The excuse of waiting for the perfect time to start saving should be avoided, as facts point out that now is the perfect time. You may need to start very small, but be consistent, it is what will make a huge difference in the future.
In conclusion, cultivate the habit of not spending all you have, but putting away a regular amount for the future. Even if it’s just 10% or 20% from every income, it helps to build a saving habit and ensure a financially secured life in retirement.
With the plans and guidelines spelt out so far, it all boils down to simply starting. Without it, there will be no difference in the end.
ABOUT THE AUTHOR:
Ernest Ademola Ehigie is a Copywriter, Content Developer, Author, Brand Consultant, and Communications Manager with over 5 years in marketing communications. He has written several articles, policy documents, press releases, radio and TV adverts for businesses and organizations. He's the author of the book, "Why You Must Lead" and currently works as a content manager for Detail and Avedia, a leading retail and media consulting firm.