Baby boomers and Gen Xers have something in common: Few of us have saved enough money for retirement. But there’s a limit to how much money we can devote to retirement savings — or is there?
Over the decades, as our incomes expanded, most of us came down with a bad case of “lifestyle creep.” We upsized to bigger houses and overfilled them, added creature comforts and bought increasingly more expensive gadgets.
Despite the fact that our houses have become significantly larger, one in every 10 of us outsources our dubious treasures to a storage unit, now a $24 billion industry.
Yet, we’re still buying stuff.
Somewhere along the way (probably while we were out shopping), the escalation reached a tipping point. All those possessions stopped enhancing our lives and became a physical and psychological burden, and now the lifestyle and our impulsive spending threatens to sabotage our retirement years.
But even small adjustments in our buying habits can make a difference. By asking four simple questions before buying things, we can curb our spending, invest the savings in our future — and enter that future with more discerning habits.
Is this something I need?
This one question can revolutionize the way we spend. Most of us already own more than we need, and we’re making purchases without even thinking.
As an experiment, try going an entire week buying only what you actually need. Suddenly, it’s no longer relevant how cute those shoes are or how much you can save by buying them on sale. If you don’t need them, it’s a waste of money. Those daily temptations are exposed for what they are: unnecessary.
Being hyper-diligent for even one week can start chipping away at frivolous spending habits. You’ll not only save money, but your closet and basement will thank you.
Does this thing require me to keep spending money?
Beware of products and services that masquerade as money-savers when they are really just thinly disguised invitations to spend more cash.
At face value, programs such as timeshares and vacation clubs promise to save you hundreds, but require that you spend money to realize those savings. These “savings opportunities” can pressure you to travel more often than you want or take