Here’s one I didn’t complete this year.
2007 401k Contribution Limit: $15,500
My Contribution: $10,573
I’ll be working on this one a little bit harder next year. :) In the meantime, here’s a few savings tips.
How To Not Be Poor When You’re Old:
- Start saving NOW, yes, seriously, NOW. Check out this 401k Calculator to see how big of a deal starting NOW is.
- Sign up for your 401k plan at work. You don’t have to know anything about stocks and bonds and trading etc. Just sign up, the confusing part is someone else’s job. :)
- If your employer does a match, (don’t they all?) take advantage of it. Also, if you get bonus money, consider dumping 80% of it into your 401k to save on taxes. It’s harder to use the excuse that you need it to live on because it’s “bonus” money, as in “unexpected”.
- Spend less than you make. It’s pretty simple math, so there’s no excuse for the consumer debt statistics. If you raise your “standard” of living every time you get a raise, then you’re never going to get ahead. For example, $400/week – $500 spent = negative $100. $500/week – $625 spent = negative $125. You’re actually farther behind if you keep spending at the same percentage.
- Track your expenses. Your bank account balance should never be a mystery. Check out Mint.com for “refreshing money management”. It’s free and easy, seriously cool. Goodbye, Microsoft Money. The only big thing they’re missing is being able to track assets.