Tomorrow’s Success May Depend On How You Budget Today
Oct. 16, 2019 Article

A No Regrets Retirement: Tomorrow's Success May Depend On How You Budget Today

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What do people ready to retire say about how they’ve saved?

  • More than 80 percent wish they could talk to their younger selves to tell them to save more.
  • Nearly six out of ten admit that not saving for retirement was one of the biggest mistakes of their lives.
  • Many reflect on simple budgeting changes that could have helped them save more.1

Rewrite Your Future

If you make adjustments to how you handle finances today, you’ll be less likely to look back on your “savings” years with regret. Learn from the experience of others, and use some basic budgeting strategies to help you stay on track.

The Cost of Paying the Minimum

Don’t Spend What You Don’t Have

Budget may be a dirty word to a lot of people, but having a plan for how to spend each paycheck actually puts you in control of your money versus it controlling you. Create a spending plan that works for you. You’ll likely have competing goals, like daily expenses, saving for a child’s education or purchasing a home. But realistically, retirement is the only goal that the bank won’t lend you money for, so it needs to be one of your top priorities. Make sure to include it in your budget.

Save For The Unexpected

Nothing derails your finances more than having an unexpected expense wreak havoc on your budget. With today’s uncertainty about jobs and markets, it’s a good idea to save enough money to cover your living expenses for three to six months.

One way to build up your emergency fund is to free up money by paying off high-interest debt (see below). Or, you can cut other corners like choosing home-cooked meals over eating out, or movie night at home versus the theater.

Pay Off High-Interest Debt

If you have high interest debt, there’s a good chance you’re spending more than you make. This could mean a lifestyle change for you, such as waiting to buy what you want until you’ve saved that amount, over buying an item with a credit card.

In reality, buying something you don’t have cash for could end up costing double the original cost or what it’s worth. The high interest rates you pay each month are likely keeping you from getting ahead financially.

Put Windfalls To Work

Many people see a work bonus or their tax return as play money. Instead, consider putting extra money to work for your future—like paying down credit card debt, funding your emergency nest egg or investing in your retirement. Even if you save or invest only a portion of extra money, it’ll get you closer to your long-term goals. Plus, once your finances are in order, you can save for vacations and shopping trips and enjoy them even more. 

Save It vs Spend It

See the impact investing an additional amount each month could mean for your retirement savings.

 Mariner Retirement Advisors shows the amount of money you can save after 20 years of setting additional money aside for retirement.

Source: American Century Investments Time-Value Calculator. Chart assumes no specific portfolio with 6% returns over 20 years.

This hypothetical situation contains assumptions that are intended for illustrative purposes only and are not representative of the performance of any security. There is no assurance similar results can be achieved, and this information should not be relied upon as a specific recommendation to buy or sell securities.

The Bottom Line

Getting your financial house in order is not only important for your peace of mind today; it can also make a difference in how you face your future— with confidence or regret.

 

 

1 American Century Investments Pre-Retiree Survey, 2013

This material is provided with permission from American Century. It is for informational purposes only and has been obtained from sources believed to be reliable. While every effort is made to ensure the accuracy of its contents, it should not be relied upon as being tax, legal, or financial advice.

Mariner, LLC dba Mariner Wealth Advisors (“MWA”), is an SEC registered investment adviser. Registration of an investment adviser does not imply a certain level of skill or training. MWA is in compliance with the current notice filing requirements imposed upon registered investment advisers by those states in which MWA maintains clients. MWA may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements. Any subsequent, direct communication by MWA with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For additional information about MWA, including fees and services, please contact MWA or refer to the Investment Advisor Public disclosure website. Please read the disclosure statement carefully before you invest or send money.

American Century Investment Services, Inc., Distributor

©2013 American Century Proprietary Holdings, Inc. All rights reserved.