Here’s Why I Treat My Savings and Retirement Contributions Like a Bill – Motley Fool
Do you struggle with saving? This method may help you prioritize your savings goals.
Saving money is an essential financial habit. Whether you’re saving for future expenses, emergencies, or retirement, having extra money set aside is beneficial. Creating a savings and investing plan is the best way to prepare for your future financial needs. Every month, I save money for various future needs, including retirement. Find out why I treat my savings and retirement contributions like a bill.
It’s easy to neglect savings
There were times in my life where I didn’t prioritize saving. Sometimes I planned to save and forgot, and other times I decided to spend my extra money instead of saving it. Because of this, I didn’t always have the money that I needed on hand. Whenever something unexpected happened, I often had to use a credit card.
While credit cards can be a helpful financial tool, they come with risks and should be used carefully. If you don’t pay the card balance in full, you’ll be charged interest. Credit card interest can be expensive, and it adds up quickly. If you have an emergency fund established for unexpected costs, it makes life a lot easier and less stressful. That way, you’ll have money on hand to pay for an unexpected expense rather than charging it to a credit card.
After neglecting my savings goals for some time, I knew that I needed to come up with a plan and force myself to save. I found a strategy that works for me, and now I worry about finances a lot less.
I treat my savings like a regular expense
I now treat my savings contributions like a regular expense. Every month, I have to pay for life expenses like my mortgage, electricity, cable and internet, and car insurance. I treat my savings and retirement contributions the same way.
I mark these bills on my calendar just like I do my other expenses. That way, I anticipate the cost coming up. I set up autonomic savings contributions so the money automatically comes out of my checking account. This way, I won’t forget.
When it comes to saving for retirement, this is especially important for me as a freelancer. I don’t have an employer-sponsored retirement account, and I need to make sure I’m planning for my future. This savings method is also helpful because I pay my self-employment taxes quarterly. With my automatic savings withdrawals, …….