When you are trying to save money for retirement, tuition, or a house down payment, it can be easy to overlook all the minor details that can also have a big impact on how much you end up with in the long run. But as it turns out, even small decisions now can significantly change your ability to save later on.
The good news is there are some simple ways to ensure that your money goes as far as possible. After all, no matter how much money you earn or how frugal you are with your monthly expenses at home, many little things still add up over time. With the right money saving strategy and techniques, anyone can make their money last a lifetime and beyond. Here are seven ways to ensure your life savings don't disappear in thirty years.
Create a budget and stick to it.
If you want to make sure your life savings last a lifetime, you first need to create a budget and stick to it. It may seem obvious, but this is the foundation of successful money management. You can't plan for the future if you don't know where your money is going.
Plenty of free budgeting apps and services are available online, or you can keep it old school with pen and paper. Keeping track of your expenses is the first step toward saving more money. Knowing how much you're spending each month, you can start adjusting to increase your savings. You may have to make sacrifices at first, but it will be worth it in the long run.
Estimate how long your money will last.
Once you have a good handle on your expenses, the next step is to estimate how long your savings will last. In other words, how much money do you need to last for the rest of your life? This may sound like a daunting task, but there are online tools that can make it a lot easier.
Once you know how much money you will need, you can adjust your spending habits accordingly. If you are saving for retirement, now is the time to invest in long-term investments like stocks and bonds. Chances are you won't need that money for 10-20 years, which gives your savings plenty of time to grow.
Diversify your portfolio.
According to the Investment Company Institute, the typical 50/30/20 portfolio comprises 50 percent stocks, 30 percent bonds, and 20 percent cash. Mixing these investments makes your portfolio less risky, which is crucial as you approach retirement. When you are younger, you can afford to take more risks with your portfolio because you have time to recover from potential losses. But you need a less risky portfolio when you are in your 60s, 70s, and 80s.
Saving for retirement is an essential responsibility for everyone. Still, it can be even more challenging for people with lower incomes. If this sounds like you, these tips will ensure your life savings don't disappear before your retirement date.