There are more millionaires than there have ever been in history yet there is a stark figure that paints a far more realistic view of American society. Three-quarters of adults live from one paycheck to the next and almost 4 in 10 have no significant retirement savings, never mind anything put aside in the case of emergency.
Many people seem unable to create any surplus, no matter how small, to put aside at the end of each month. This is a particularly worrying picture especially as the recession has now receded and unemployment has returned to the level before the Collateralized Debt Obligation Crisis struck.
It is not that people are unaware of the potential problems they can be facing in later life. Huge numbers recognize that the Social Security System no longer looks capable of providing adequately for an aging population which is only going to increase.
So, how do you start? What is the first step towards saving money? What is the first step to retirement? Here are some actionable steps that you can take to take back control of your money, start saving, and take the first step to retirement.
Get in Control
Different people react in different ways to potential problems. Some do nothing and hope they will go away. Conscientious people are likely to have tried to cover every eventuality.
But, during the recession, they were helpless and the plans of many families have been all but destroyed by circumstances over which they had little control; unemployment, increasing debt, foreclosure and dependency on credit card spending to survive, all were common during the recession. That has gone but the legacy remains. It is time to take positive action, whether you are in financial difficulty or not.
Retirement may seem years away but it will come soon enough. Some people have aspirations to retire early but few have the means. They will certainly not be able to do it unless they are saving money every month and the indications are that not that many citizens are managing to do that. The process begins by planning a strategy, saving money and putting it toward retirement.
Everyone should have a budget, look at their expenditure and cut out waste and thereby aim to build up savings toward the future. It does not automatically mean you have to make sacrifices but you might begin by thinking about your daily expenditure.
Do you really need to go to Starbucks every day? There are many excellent brands of coffee that you can buy during your weekly shopping that are equally good or better. Just do a little exercise on what your annual bill for Starbucks is likely to be and think.
It is not a matter of having a ‘downer’ on Starbucks as such or making a major sacrifice. It just makes common sense, especially if you have no savings and don’t feel you have the scope to start.
Credit cards are very convenient. You do not need to carry cash or gift cards so you can pick up what you want when you want it because there is no immediate bill. The problem is that you may be tempted to pick something up that you cannot afford. It certainly is not a bargain if you can’t pay off the bill in full at the end of the month.
The rate of interest applied to credit card balances has been described as penal. It is! If you are carrying such debt you will be reducing your scope for saving. You should go online, find a good realisticloans.com guaranteed provider offering a competitive interest rate and no hidden extras. The rate you will be paying is much lower than what you are paying credit card companies.
Once you pay of a balance with such a loan, only spend when you can afford to pay off purchases at the end of the month in full. Put the money you save by not paying high interest aside perhaps? In the future you will be able to afford more if you get your finances in shape.
Dining out is fun. It is even more fun if it is a treat rather than a matter of routine. You may think that your cooking skills are limited. There is plenty of help around to improve them and with practice you are sure to improve.
It does not mean you should pick up more ready meals and put them in the microwave. A healthy diet will prolong your life and if you get your finances in order you will have the money to enjoy it. You can prepare things at the weekend; good packed lunches are easy.
There are plenty of special offers around. Make sure you are not committing yourself to anything long term by taking advantage but simply using coupons that you come across as a matter of course will save you money.
You perhaps should look at your lifestyle and look at ways to improve it. That goes down to a healthy diet and if you smoke, stop while also taking more exercise. There are simple ways to create a little surplus each month and it will add up. Why not start today and enjoy that first step to retirement years in the future?