Focusing on saving for your children’s college instead of saving for retirement could be a serious mistake.
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When managing your personal finances you should always think about your retirement. And it is that you could make some mistakes with money that could cause you to end up retiring with very little money. Here are three of these mistakes that you should avoid at all costs.
1–Spend to show off
You can’t spend your whole life pretending to be rich and then expecting to retire rich too.
Living within your means isn’t always glamorous, but it’s a smart thing to do. And doing just this is what will make you a wealthy retiree.
Instead of replacing your phone every two years and your car every three, try to be content with what you have. It doesn’t matter if all your friends are remodeling their kitchens, if yours works perfectly fine, leave it at that.
Having a realistic budget is the first step to living within your means, as advised by Money Talks News.
2–Not saving enough money
If you don’t spend your money on things you don’t really need, you’ll have more money to save.
With traditional pensions all but gone, it’s up to you, and you alone, to save the money you need to live comfortably in retirement. Don’t count on Social Security for that, either. And it is that the average monthly Social Security retirement benefit was just $1,555 as of 2021.
Not saving enough money is a surefire way to retire short on money. Ideally, 10% to 15% of your income should go into a retirement account each month. If you’re behind on funding your savings goals, you should probably save even more.
3–Making the wrong savings priorities
On the other hand, you can save money, but have all your priorities wrong.
While it’s true that college is important for your kids, it shouldn’t come at the expense of your retirement account. Children can always get scholarships, jobs, or even loans if absolutely necessary.
Make your retirement savings a top priority. Again, it is best to set aside 10% to 15% of your income in retirement accounts.
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