How to Stick to Your Retirement Savings Plan
It is one thing to plan for your retirement and another thing to be consistent in your efforts to save for your retirement. Many people find it difficult to contribute consistently to their retirement savings account. Making regular contributions to your retirement savings account is essential in order to ensure that you do not retire broke. If you are having trouble in sticking to your retirement savings plan, the following tips can help you out.
Start with a budget
The first step of sticking to your retirement savings plan is to have a monthly budget. When you are in control of your money, you can focus on building your retirement fund or saving for your retirement goals. When you create a budget, do not forget to include miscellaneous expenses that may crop up once in a while. It is a good idea to build an emergency fund for such expenses. This will ensure that your retirement savings plan remains on track even in times of your sudden financial crisis.
Get into the habit of paying yourself first
Expenses tend to grow without any plan. But to successfully save for retirement you will need to develop a concrete plan. The plan is to pay yourself first. In other words, when you receive your paycheck, first contribute to your retirement savings account like an RRSP and then proceed to pay for your other expenses. If you do not make your retirement savings a priority, immediate financial expenses may make it impossible for you to pursue your retirement saving goals.
Opt for automatic transfers
Automatic transfers make the goal of paying yourself first an easy job. If your paycheck arrives on a set date, you can instruct your bank to make automatic transfers to your retirement saving vehicles like RRSPs. In this way, you can easily achieve your goal of sticking to your retirement savings schedule every month without bothering to transfer funds or write checks to do so. This is an easy and effective way to consistently build your wealth.
Reward yourself for achieving goals
It can be hard to keep yourself motivated to save for your retirement, which is usually decades away. The best way to keep yourself on track is to set small goals and reward yourself when you achieve them. For instance, you can set yourself a mini-goal of saving $10,000 in your retirement account within a certain period. Once you achieve the goal, reward yourself with a dinner at a favorite restaurant or go watch a movie to celebrate your success. Then set yourself the next mini-goal and continue on your retirement savings run.
This post contains sponsored links from Sun Life Financial.