The Secret to Helping Your Family: Help Yourself

The Secret to Helping Your Family {Header Image}We’ve all heard the old yarn: if you want to help others, you need to help yourself first. But that doesn’t make it easier – particularly if you have several generations worth of family members to worry about!

But  financial prioritization, especially when it comes to your own future, is critical. In this article, we’ll show you how sticking to your retirement savings plan can make a big difference, and what you can do to make the task of sticking with it with it a little easier.

Why delaying can cost you more than you think

You know how important retirement savings is, but – like so many of us – you’re pulled in a lot of different directions. That can make it easy to let your savings rate stagnate, or even fall. Maybe you stop saving altogether for just a while, only to find that it’s a few years later and you’ve never gotten started again.

The costs of those delays are real.

For example, let’s say you make $50,000 a year and you want to save 10% of your income for retirement. You were doing well until life took over, and now you haven’t saved for 2 years.

It seems like it’s just $10,000. No big deal in the grand scheme, right?

Well, depending on your age, that $10,000 could actually be a lot more.  If you’re 40 years old and plan to retire at 65, that money is losing out on 25 years worth of growth potential.

If you were to earn an average of 7% per year over that two and a half decades, you’re not talking about $10,000 anymore.

Suddenly, you’re talking about $54,000.

In other words, for every year that you save less than you should or not at all, you’re not just losing out on the money you set aside. You’re losing out on any potential investment returns on that money!

Saving More: Where to start

But where to start?

One easy way: save your raise.

Instead of letting that extra money find its way into your paycheck, raise your 401(k) or other retirement savings contribution automatically. You won’t miss the money (you never had it anyway) and you’ll have the benefit of saving without feeling like you’re sacrificing your lifestyle.

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4 - The Secret to Helping Your Family {Info Image}Other options for saving

Of course, not everyone gets a raise, or you might want to save even more. In this case, consider your personality: is it easier for you to go “whole hog” and make sweeping changes in your life in furthering your goals? Or do you prefer to build momentum through small and painless steps?

If you want to aggressively generate savings, consider:

  • Moving! This is of course much easier if you rent, but downsizing to a lower-cost home or cheaper area can save a lot of money on housing, maintenance, and insurance
  • Selling – or going without – your second car (if you have one)
  • Getting rid of your cable TV subscription and using lower-cost streaming services
  • A spending challenge where you cut your discretionary budget by 30%

If you prefer a route that preserves your lifestyle, consider:

  • Renegotiating all of your recurring costs (insurance, cell phone, etc.) to get better rates
  • Putting $5 bills in a jar whenever you happen to get one (or another denomination)
  • Automatically sending $10 a month to your savings account. Once you get used to that, make it $15. Still don’t miss the money? What about $20?

Whatever you choose to do, remember that people can vary widely in their preferences – and that’s okay. Some savers only feel like they’re making progress when making large sacrifices, others experience the opposite.

The goal here is to find the ways that work for you. So if you try a new savings strategy and find it demoralizing and difficult, step back and try something else.

With concerted effort and a bit of creativity, you can find the strategy that works for you!

What if I can’t save more?

Of course, savings can be a tough issue to address in an article like this because everyone’s personal situation is different.

Not only might your income and costs make it hard to save, but you could have other financial priorities, like getting out of debt, that need to take precedence in the short run.

That’s okay. But if you’re feeling powerless over your finances, it is very important to take action – any action. Feeling powerlessness is exhausting and demoralizing, and it can make a bad situation even worse.

Whether you can save $5 or $500 next month isn’t the point. Instead of worrying about dollar amounts, take a look at what you can control and what you can contribute. Small steps have a way of adding up to big results – not only financially, but emotionally.
At the end of the day, that snowball effect can be wildly empowering and can help you (and your family!) realize the important long-term benefits of prioritizing your own financial needs.

Looking for more?

Our free eBook series on Sandwich Generation finances offers help with planning, guidance, and support for members of the Sandwich Generation. Covering everything from tax tips to lifestyle advice, you’ll get access to a lot of information in an easy-to-read downloadable format. Click here to download your copy today!

Let Us Help!

We can discuss this topic and more at a complimentary appointment. As a bay area retirement planning coaches, we can give you a review and make suggestions based on your retirement objectives.

The Secret to Helping Your Family Infographic - UPDATED

Important disclosures

The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by United Planners.

To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk.

Neither diversification nor asset allocation can ensure a profit or prevention of loss in times of declining values. United Planners does not render tax advice.