Money can be a bully. If we let it, money can control us. But you and I can learn to be in control of our money rather than letting it dictate to us.
We all have limited time and ability. That’s one reason why it’s critical that we spend our time and effort on those things we can control. Sound obvious? It is, but think about how much energy many people spend on worrying about or trying to influence money matters they can’t change.
Take Control of Your Money
For example, you can’t control time, but you can control the time you spend preparing financially for retirement. You cannot control Social Security, but you can put money aside in a way that can provide a comfortable retirement whether or not Social Security is there for you. You can’t control your employer’s pension plan, but you can maximize the contribution you put into that plan.
Another thing you and I can’t control is risk. No one can control every financial risk. But you can minimize those risks through smart strategies like diversification. I also believe that taking no financial risks at all can be disastrous to our money matters. Think about people who save money under a mattress or in a very low interest bearing account. By avoiding all risk they avoid all or nearly all financial growth.
Pay Yourself First
If you do nothing else but this one item I’m about to explain, you can greatly expand your control of your own money. Let’s start with a question: What’s the number one bill you should pay every month? It’s not your credit card bill. It’s not your mortgage. Come on now, you know the answer to this.
Of course, your credit card, mortgage, and other bills are important to pay. But if you want to maximize a financially comfortable retirement, your number one bill every month should be the amount you pay into your retirement fund. No one cares about your retirement finances like you do. Only you can build what you need. So pay yourself first.
Have a monthly retirement savings goal and reach or exceed that savings amount every month.
Treat that retirement savings goal as your most important household bill. Take full advantage of any employer-sponsored saving plans. Give the maximum you can to your 401(k) or other retirement savings plans.
You’re More Important than the Phone Company
If you’re like most people, when you receive your paycheck you pay your bills first. The utility, the bank, the credit card company, the phone company—all of them and more get paid. When you’re all done paying bills at the very end of your list, who do you pay if you have funds leftover? Yourself.
Aren’t you as important as the telephone company? Don’t you rate as highly as the credit card company? Yes, pay all your creditors, but don’t leave yourself off that list of creditors. People who shortchange saving for their future financial needs suffer later when they can’t reach their savings goal or have unexpected expenses or reach retirement without enough funds.
When you take control of your money, you make it work harder for you. It will grow faster and produce more for you. Make your money work by saving and investing, by taking care of your own financial future needs first, by taking advantage of employer sponsored savings plans, and more. Make your money sweat so you don’t have to.
 Diversification means placing funds in a variety of stocks, bonds, real estate, and other investments to reduce your exposure to risk since different asset classes are very unlikely to move up or down in value at the same time or rate.
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It will help you plan better for the future, and living your retirement dream.
Gene Offredi, CFP, RFC, Summit Investor Coach, Guilford, CT. Call 203.453.1017 or visit summitinvestorcoach.com.