"See, many people struggle to save enough money for retirement. One big reason for that is delayed gratification. The money you are investing for retirement will help you decades in the future, but for today, investing for retirement means that you are tying up money that you can't use to meet your immediate goals and desires."
"Building your budget around the long-term. Instead of devoting a lot of your money to discretionary spending now, limit the fun spending you are doing today and devote more money to retirement savings. Of course, you need a balance, and you can't live only for the future. But the goal should be to save 20% of your earnings, keep fixed costs to 50% and limit discretionary spending to 30%."
"This may mean you have to live in a smaller house or can't eat out as often as you'd like, and can't spend money on expensive cars. In other words, you can't keep up with the Joneses today, but you are setting yourself up for a better tomorrow."
Delayed gratification is a major obstacle to saving enough for retirement because invested money is unavailable for immediate desires. Prioritizing long-term goals requires structuring a budget that directs more income to retirement savings while balancing living needs. A target allocation could be saving 20% of earnings, keeping fixed costs to 50%, and limiting discretionary spending to 30%. Practical sacrifices may include living in a smaller home, eating out less, and avoiding expensive cars. Automating contributions and committing to consistent decisions now produce a more secure retirement with fewer financial worries later.
Read at 24/7 Wall St.
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