In my second video blog post, I share a strategy to start saving for your retirement when it feels out of reach. You can get started with only $1 per work day.
How did you start saving for retirement? Do you have any tips for someone starting from scratch? Share your thoughts in the comments.
Here is the text of the video if you'd rather read than watch:
Hi everyone, this is Eric from Narrow Bridge Finance, and I’m here today with my second ever video blog post, I’m excited to have you join me.
So today I wanted to talk to you about a very common problem and question for young investors, particularly those that don’t have a work-sponsored retirement account. And that is “How do I get started on saving for my retirement, especially if I feel like I can’t afford it?” And I have a plan that’s pretty simple, pretty easy, pretty straightforward that you can use to start saving for your retirement, even if it feels like you can’t afford it yet.
So what I like to do is start by putting in one dollar a day. A dollar a day is pretty easy. Not even a dollar every day of the week, just how about one dollar every work day? That’s five dollars a week. I’m pretty sure most everybody can come up with a way to put in five dollars a week.
So you start with that five dollars a week, which is twenty dollars a month, or two hundred and forty a year, and you get used to putting away that dollar a year, every single paycheck. If you get paid twice a month, that’s ten dollars every paycheck. It’s not a whole lot to part with, you know, that’s two Starbucks. So you put that two hundred and forty dollars every year in the bank, and I’d suggest a Roth IRA for most young people, and you start building up that retirement account, you get used to it.
And once you’re used to living without that dollar a day, twenty dollars a month, maybe you push it up to twenty five dollars a month. You know, that’s one more trip to Starbucks. Not a huge deal, but twenty five dollars a month is three hundred dollars a year. And then once you get used to that, maybe add another five dollars. For every five dollars you add, that’s sixty dollars every year you’re adding to your retirement account.
And, sure, three hundred a year won’t go that far when you’re in retirement, but it compounds, there’s interest on it. You get in the habit, and you can add more, you can get used to it, and before you know it, you’ll have a good retirement account and you’ll be comfortable with getting ready to retire in your future.
So if you have any questions, as always, you can email me or leave it in the comments and I will talk to you next time.