Look, we've all heard over and over that slow and steady wins the race. The whole tortoise and the hare analogy. Well, what happens when your almost 40 years old and didn't heed those wise words and start saving and investing early?
Panic time right? I mean, holy cow...I've got to have a million dollars in my retirement fund and I've got a fraction of the time I need to get there.
Then...blammo...nothing...you just slide back to your previous ways. No saving, no budgeting, no retirement. Why? You've already come to the conclusion that you need to bust your ass double time in order to make up ground. And guess what, life's too short anyways! After all, most families, even those approaching retirement, have little to no savings, they'll find a way and so will I! (A pretty decent write-up about the retirement savings, or lack thereof, can be found here: CNBC)
The excuses are endless, trust me I've been there and am still there to a degree. Or I should say, I'm getting out of that frame of mind and trying to start with realistic goals and expectations. I can't think of the huge gap from where I am to where I want to be at retirement.
I'm no psychology expert but I have come to a conclusion that a good part of the reason I struggle with retirement savings is a sense of being overwhelmed. A lack of discipline certainly comes to play, but often times in order to gain discipline you first need to make a habit of something. Why start making a habit if it's so damn hard and your target is so far away? It's a defeatist attitude. It's ugly and easy to suppress through inaction. It's easier to not even try than to put forth the huge amount of effort to get that high expectation target.
EAT THE ELEPHANT ONE BITE AT A TIME
I dislike that saying quite a bit. Elephants are extremely cool and I'd never eat one, but, at least for me, it makes sense in regards to how I need to process retirement savings. If I just constantly stare at the end goal, and it's a whopper, I'm so meh about it. I won't reach my goal for a couple decades. This is stupid. I need to trick myself. I dislike gimmicks but maybe I need one to get my hustle and bustle on?
So simply put I'm setting micro-goals. First things first...my savings will have $10,000 in it for emergency funding. Second, I will salt away another $500 per month in some form of a retirement account. (I'm currently deciding on some options) When I hit my $10,000 in emergency savings I'm going to have a little party. Same when I hit $10,000 in retirement savings...and other incremental benchmarks along the way. I'll set, and create micro-goals for repaying my debt. Another card done, goal met, reward time.
It's not rocket science, I know...but having this somewhat coherent thought about stepping back from looking at the end and focusing on the now has helped motivate me. Writing out much shorter term goals that all lead me to the end goal has been an important step for me. I'm sure a good dose of reality comes down to the fact that I'm dialing in on 40. Soon I'll be on the other side of the hill and things get a lot more in focus the closer you get.
If you're like me you'll see stuff like hey, you should've started sooner...you're screwed!
Don't listen to it. It's discouraging noise that you don't need. You just need to do something. So try what I'm doing. Take time and set those micro-goals and then start knocking them off one by one. Reward yourself as you go.
Look, a lot of your rewards are probably things you'll do anyways. Think about how much more rewarding those rewards will be now that you've accomplished something that you know will cover your butt down the road? Meeting these micro-goals should help take a load of your shoulders, lower your stress and get you potentially feeling better. Win-win-win all around.
It surely beats doing nothing.