How to Gain Momentum in Saving for Retirement

A recent large poll conducted for CNBC found that less than half of workers are “cautiously optimistic” about having a secure retirement.

That doesn’t surprise me, but it sure does make me a combination of sad, and concerned.

That the majority of workers aren’t even cautiously optimistic about their retirement says so much about the economic struggles so many households have.

I am fully aware that for many households the lack of optimism is not because of bad choices—spending too much, borrowing too much—but more a function that the cost of just getting by each month can make it hard to save more for retirement.

I get it.

But I also want every one of you to stand in your truth. Are you doing everything you can to save more for retirement? Or have you sort of fallen into a habit of thinking you’ll never be able to save enough, so you stop pushing yourself to save more?

Believe it or not, I get that attitude, too.

But I am not going to let you stay stuck there.

Let’s consider some steps that can help you gain some retirement-saving momentum.

Commit to Needs vs. Wants for Three Months

No lip service, or casual commitment. I want you to carefully stop yourself every time you are about to spend money and ask yourself: Is it for a need or a want?

If you proceed to buy a want, keep a weekly running tab on what you spent on these not-must-haves. That’s potential money you could have saved for retirement. Every $10, $20, $50 matters.

Do this for three months and I think you can start to build a new habit of eliminating (or at least reducing) the money you spend on wants. Every dollar not spent on wants is a dollar that can go into retirement savings.

Spend the Least Possible on Needs

When you need to replace something, the goal should be to spend the least amount possible without sacrificing quality or safety. A car purchase is the best example of how this can upend household finances. If you truly need to replace a car, it should be the least expensive car. A reliable used car is likely a far better financial move than buying a new one. And do not listen to the lending desk that tells you how big of a loan you qualify for. And that it's “just $25, or $50” more a month for that car you really want. That person is in the business of selling you something very expensive, not helping you reach your retirement goals.

And to be clear, the same applies to all sorts of purchases: grocery shopping, clothes shopping, etc. Spend the least amount possible and I think you will find yourself with more money each month to put toward retirement savings.

Just Say No to the Kids

You owe your kids love and support. You most certainly do not owe them a willingness to say yes to everything they want. Or feeling guilty that their friends have the newest fashion must-have or concert tickets, so you buy them the same, even when you know you can’t afford it. This is not punishment for your kids. Set expectations, explain your goals (financial security in retirement!) To repeat myself: every $10, $20, $50 matters.

Push Yourself to Do a Little More

If you are currently saving 6% of your salary in a retirement account, change it to 7%, and set a calendar alert to bump that to 8% in six months. If you are paying down a credit card balance, add another $50 a month to the payment. The goal here is to make modest shifts that move you in the right direction. Will those shifts deliver retirement security? Not immediately. But they help you create new positive habits, and that is going to be infectious: as you make progress you will feel better about your prospects, and your ability to propel yourself toward a more secure future.

Build Emergency Savings to Help With Retirement

When life happens and you don’t have enough set aside in an emergency savings account to cover that unexpected expense, it can derail retirement security. You stop saving for retirement, or you put an unexpected expense on a credit card bill, that then charges way too much interest, which can keep you in expensive debt for years, which will impact your ability to save for retirement. Or the worst outcome is when people still working pull money out of their retirement accounts to cover an emergency expense.

So while it may seem a bit off-topic, building up an emergency savings account is going to help you save for retirement in the long run. It is the foundation that gives you the ability to stay on track even when an expensive unplanned expense pops up. And that in turn, can help you avoid costly debt that gets in the way of retirement savings.