The other day, a fellow employee was shocked that someone could approach retirement with just $75,000 stashed away. S/He questioned why anyone would choose not to utilize a company’s 401K plan to the fullest. We TR parents will be lucky if we get to retirement age with anywhere near $75,000 in our 401k.
A sizeable savings, when you live pay check to pay check, is an incredibly hard thing to accomplish.
And it is something that presses on us. We have 3 kids that will aim for college, one within the next few years. There is little college savings for them to draw upon. And although we participate in a 401K, it isn’t at the level that affords a company match. We need 99.9% of our paycheck to survive now. So our 401k is a slow crawl to saving for eventual retirement, which will probably occur well beyond the age that most people stop working. And our kids will have to confront student loans, or scholarships if they’re lucky, to pay for college.
Tip: Make savings automatic by setting up a recurring pull, of even a very small amount, from your paycheck.
We do manage to snip off around $30 from each paycheck to put into savings. But it never stays there very long. There is always an emergency to handle that requires a pull from savings: a car repair, a surprise cavity at a dental check, or a school trip. But we continue to make the effort.
Pulling from savings is a better move than using a credit card for an ’emergency.’ We hope that eventually our small savings will grow to become something of use to us later.
What are your tricks or tips for saving money?