Win Big by Starting Your Savings!

By Charmaine Fuller Cooper

In a recent text conversation with a close friend, I encouraged her to save a minimum of ten percent each paycheck for retirement and encouraged her to aim for fifteen percent if possible. I was quite surprised when she texted back that she wasn’t saving anything at all.

Both of us are intelligent with fulfilling nonprofit careers in our passion areas. We never really focused on money until bill time came and joked that we were broke before even heading to the bank. After my friend said she wasn’t saving at all, I understood completely and suggested that we start small by saving a percentage of at least five percent each paycheck and slowly increase as our incomes increase.

A few moments later she texted back, ‘you’re killing me. Why can’t I just buy a lottery ticket, win big, and retire for life.’ My reply was ‘win for both of us.’

Many are waiting on that winning number for a new house, to pay down debts, or to live like a pampered and lavishly adorned Beverly Hills Chihuahua. Unfortunately, most will never hit the lottery pay day and worst of all, many are missing out on free money. For those fortunate to work for employers that match retirement contributions, if you don’t contribute to your retirement plans you don’t get the free retirement match. Let’s repeat! You’re missing free money!

Even if your employer doesn’t match your retirement contribution, you can still walk away ‘winning’ if you set a reasonable goal and contribute towards retirement each paycheck. If you don’t have access to a retirement account at all through your employer, consider opening an Individual Retirement Account (IRA) at your local credit union or bank. Some states are even rolling out new plans to help more private sector workers save for retirement through payroll deduction when employers don’t offer plans and North Carolina will see similar legislation this year. (Click here for NC’s proposed plan)

Bills never stop because there will always be a car emergency, a big winter light bill, child care expenses, student loans, a family emergency and more. But, guess what? After a life of living paycheck to paycheck and not saving for retirement, one day your only paycheck might be social security and you will find yourself greatly unprepared.

So, when I texted my friend back ‘win for both of us’, I meant it. It’s not fun to financially struggle or to see your friends and family members struggle and we all have to start somewhere. Begin saving for your retirement today and encourage a friend.

Get your winning retirement formula in five easy steps!

1. Estimate your Social Security benefit.
2. Use AARP’s Retirement Calculator to see how much you need for a comfortable retirement.
3. Pull out your last paystub and estimate your new take home pay based on possible retirement contributions. Remember if you contribute before taxes, you will feel less of an impact at payday because you don’t pay taxes until you pull the funds out in retirement.
4. Evaluate your budget. You’ll be surprised at the savings you can find by reviewing last month’s bank statement.
5. Set a goal and start saving.