Lifestyles have changed drastically over the past 25 to 50 years and the current generation may have to be more strategic than their parents about planning for their financial future. A change in mindset may be required, and while not always easy to implement, it may be the difference between being financially independent during retirement and having to rely on others for support.
Actively engage in your future
It’s important to live life, not watch it go by. According to statistics, the life expectancy of men and women has increased significantly over the past few years. The facts are clear, yet saving for retirement hasn’t increased on the priority list.
Unfortunately, not everyone can retire comfortably. A change in perspective may be needed: be proactive by saving for your future now. Otherwise, you may find yourself in a difficult reactive situation at retirement age.
Many employees relinquish the responsibility of saving for retirement to their employer. An employer can contribute (and essentially ‘look after’) employees’ retirement savings by choosing an umbrella fund investment for the company.
Shift your mindset
You may feel that it’s difficult to save due to your financial situation. However, if you see saving as a necessity, not a choice, it can impact your savings approach.
It’s beneficial for families to discuss their current financial situation, set objectives, and above all, be honest with each other. Work together; don’t suffer in silence.
The reality is that sacrifice, discipline and an overall change in mindset may be needed for you to write your own story.
Evaluate your spending habits and create a budget
Keep track of how much money you spend every month. You may be overspending on items that you don’t need. Once you have an accurate sense of what you’re spending your money on, review to see where you could possibly cut back. It’s a good idea to draw up a budget. It can give you a good indication of how much of your income is needed for expenses and how much disposable income you have.
Identify your goals
Your budget can provide you with a good idea of your current financial situation and is the first step in creating a financial plan. Now, identify your goals and put a process in place to achieve them. Your goals could include saving for your retirement, your child’s education and possibly a vacation.
Understand the options available to you
It’s important that you make an effort to research what your investment is offering and whether that aligns to your objectives. If you are unsure, you can speak to a financial advisor.
Get your family on board
Don’t deviate from the commitments you’ve put into your financial plan; remain disciplined. It can be possible for you to organize your finances so that you can support yourself and your family members. Make a point of speaking to your dependents about your financial situation; be clear and realistic. This can play a significant role in helping you manage expectations around your budget.
Don’t procrastinate
Start saving now; it’s not worth delaying it ‘just one more month’ and spending potential savings instead.
