4 Smart Habits to Adopt Before you Retire

How you handle your money before retirement can help lay the groundwork for a secure and fulfilling future. Consider adopting these smart money habits to potentially avoid financial disaster in your golden years.

1. Create a budget. The first step towards reaching your retirement goal can be creating and sticking to a monthly budget. Track your spending and make sure you are living within your means. A budget is the best tool to help you stay within your financial goals. Whether you keep track using an app, computer, or good old pencil and paper, knowing that you will be able to pay your bills on time can give you a feeling of security.
2. Don’t spend more than you earn. While this seems like an easy one to follow, according to a study from the Center for Financial Services Innovation nearly half of Americans say their expenses are equal to or greater than their income. This makes it extremely difficult to save for retirement. Living within your budget can be one way to save up cash for those extras.
3. Take advantage of your employer’s savings plan. Many Americans rely on social security for their retirement. Social security could only cover 40% of your prior income. Could you imagine living off 40% of what you currently make? Take advantage of 401k and other saving option plans your employer may offer. Consider Contributing the maximum to get the full match from your employer. Most importantly, do not touch 401(k) money until you have retired.
4. Pay yourself first. By the time you have paid for rent, groceries, utilities, and all other expenses, it can be hard to imagine adding more to savings or retirement plans. Build this into your budget. Make sure you pay yourself to help ensure your future self’s financial goals are covered.

If you have already adopted one or more of these, congratulations! You are on your way to building a steady foundation for retirement. For those of us who are just now starting, it is never too late to change your financial habits.