You’re broke and it’s killing you. Not because you want to go out and buy yourself a bunch of crap, but because you have bigger financial dreams.
You want to be able to save. You want to fully fund a retirement account each year. And you certainly don’t want to be living off ramen noodles in your golden years. So what do you do? Here are three easy strategies that can help you save for retirement — even if you’re broke.
Start small
I’ve never had an employer-sponsored retirement plan, so when I decided to start a retirement account, it was all up to me. At first I thought I would need at least N100,000 to open up a retirement account. I started adding money to a savings account, waiting for that balance to hit a grand. It felt like it was taking too long, so I soon gave up.
Fast forward a few years, and I’d smartened up. I started doing research and realised I could with as little as N1,000, with no required monthly contributions. I was elated.
I opened up an account with an insurance or asset management company, starting with N10,000, then opting to have N10,000 a month automatically withdrawn from my account and I was good to go with my plans. Don’t be fooled into thinking that you cannot start small. The truth is that even the smallest amounts add up. And more importantly, you’re creating a very good financial habit. Just do it. Contribute whatever you can each month.
Add your windfalls
You know those little windfalls you come into every year, like income tax refunds and bonuses from work? Put them to good use by adding them to your retirement savings. Since it’s not money that you’re counting on to get by, it won’t hurt to stash it away.
Also, don’t forget overtime! Even if your check is only an extra N15, 000 throw it in; that money will add up.
Increase your contribution each year
Every so often, set your retirement contributions to go up a certain percentage. By slowly increasing the amounts you’re adding, parting with your money won’t sting as much. If you’re starting with really small monthly deposits, then consider upping them by 20 to 30 percent each year.
If that’s too much, go for five or ten percent — just do whatever works best for you.
Don’t get fooled into thinking that you can’t start saving for retirement if you don’t have much money. It’s simply not true. Instead, do the best with what you have and work on improving from there.
After all, millionaires are made N10,000 at a time!
