You want a secure financial future, and you want to live life to the fullest now. Here’s how you can do both!
It’s shockingly simple to find balance in your financial life.
First, let’s acknowledge there are a lot of extreme polarized thinking in life, especially with money. You might view money management two ways:
1. You’re “good” with money (and boring)
You perceive when you have a strict budget and invest long-term, you need to sacrifice everything now. You miss out on eating out, traveling, adventure, and living in the moment.
2. You’re “bad” with money (and living it up now)
The other extreme thinking is personal finance has no structure at all. You buy whatever you want, when you want it! The Amazon and Uber Eats drivers know you by first name, but you’re drowning in debt and have no plan for the future.
Finding balance with personal finance doesn’t need to be complicated.
How to Save for Retirement (And Enjoy Life Now)
This one tip changes everything. You can save for retirement and enjoy life now by automating your investing.
What exactly does automating your investing mean?
Chances are most of your standard bills are automatically deducted from your accounts. You set up bill pay or transfers for your rent, internet, streaming services, insurances, gym, etc.
You never miss a bill and even if things are tight on any given month, you’ll absolutely pay for those expenses.
Why not make your investing for retirement happen the same way?
Think of investing as a bill you have every single month.
This goes along with a personal finance genius strategy called, pay yourself first. This means you invest BEFORE you spend.
One of the first personal finance books I got my hands on was “The Automatic Millionaire,” by David Bach.
This emphasized making small, regular investments over the long-run. The truth is very few people get rich overnight, but almost anyone can become a millionaire by investing a little monthly in a lifetime.
For example, if you invest $325 a month over 40 years, assuming 8% returns you’ll be a millionaire!
If you have an employer sponsored retirement plan, like a 401(k) you can invest a percentage of your income before you even get your paycheck. As a bonus, they’ll usually match a percentage of what you invest. Plus, if you invest in a traditional account, then your taxes will go down now.
How much should you invest (and what if you have debt)?
When you’re starting, I recommend investing 10% of your gross income. If you have debt, then I recommend investing 5% (in a retirement account) and automatically saving 5% for an emergency fund (a high-yield savings account).
For example, if your gross income is $5,000 and you have debt, you’ll contribute $250 ($5,000 x .05) to retirement and $250 ($5,000 x .05) to an emergency fund.
If you’re debt-free and already have an emergency fund, then you can invest all 10%.
There’s a popular movement to retire decades earlier than the standard age of 65. This is possible when you invest a much larger percentage of your pay.
How automatic investing allows you to enjoy life now
When you invest automatically every month, you’re setting up a secure future. You’ll experience less stress or worry about your financial future now.
More importantly, since you know investing is happening automatically, you can spend guilt-free on whatever you want to live in the moment too!
You don’t need to put your life on hold. Life won’t begin in retirement or when you’ve reached a certain net worth. You can travel and budget for fun things in life.
Start automatically investing now. Your future-self will thank you!
❤️ Carly
P.S. The winter session of Best Money Class Ever is wrapping up. Get excited, I’ll be announcing the spring class dates in a couple of weeks.
