Simple but Profound – Part 2

Do you remember a couple months ago when we talked about the simple act of paying yourself first?

Well the time come for you to implement this strategy in the simplest of forms – it’s easy!

If you have a retirement plan through your employer, its that time of year, called Open Enrollment! During open enrollment, you as the participant have the ability to update your retirement contributions or even just enroll.

 

So let’s review the Simple but Profound concept:

 

Here’s What You Need to Know:

1) Anyone Can Do It

2) It’s Not about the Quantity

3) The Simple Act of Paying Yourself first creates financial discipline and a habit

 

How to Implement:

1) Establish a Savings Account

2) Link the Savings Account to your Checking Account

3) Set up an automatic transfer from your Checking Account to your Savings Account on the day(s) you get paid each month

 

The first few pay periods, you may miss the amount you have chosen to save but after the 3rd or 4th month you will have grown accustomed to the new amount!

 

So let’s relay this simple concept to your retirement plan through work…

  • If you are not currently enrolled, take advantage of this open enrollment period, and sign yourself up!
  • Revisit the benefits of the plan and if your company provides a match
  • Be sure to at the very least, contribute enough earnings of your salary to receive the company match. The company match is a 100% return on your own investment without any market participation!
  • If you are already enrolled, increase the percentage you are deferring by 1%
  • Some companies now offer an automatic increase option – this means each year during the open enrollment period your employee contributions will automatically increase by 1%. For example, if you are deferring 3% of your pay to your 401(k), this will increase to 4%. Don’t hesitate, just turn this option on!

 

Again, this same concept applies: The first few pay periods, you may miss the amount you have chosen to save but after the 3rd or 4th paycheck you will have grown accustomed to the new amount and created a habit all in one swing!

And if you have any questions, don’t hesitate to call me – I would love to talk with you!

Let’s talk soon,

Maleah