Friday, June 01, 2007

Retirement Saving Challenge

Want to get started on saving? Don't know how much to save for a comfortable retirement? This challenge will help work on a very important aspect of wealth building - saving. Here's how My Wealth Builder will help. This will be a simple six month doing and personal tracking process that will get one started on the journey. It will be self directed and honor system -one will only need to report to oneself. My Wealth Builder will post three items on a monthly basis: 1) Recommended nest egg size; 2) daily savings amount; 3) target progress. The challenge will start on July 1, 2007 and end on December 31, 2007.

My Wealth Builder has been sharing the principles over the past nine months in a number of posts. A few readers, who agree with the principles, have asked more more specifics on the hows. Being a firm believer in learning by doing, I will share the hows I have personally used as part of this saving challenge.

I first start with an overarching goal and plan.

Have an overall life goal. Money is a tool, not a goal. Money is a great enabler for what is important to one and one's family. My life goal is explained in Developing A Personal Mission.

Develop strategies and plans. Here are my three strategies:
  1. Maintain a frugal lifestyle and save.
  2. Preserve my wealth
  3. Grow my income (faster than expenses grow)
For more details see My Wealth Building Strategies.

Here are the specific hows, which I will describe in more detail on the Fridays leading up to challenge start date of July 1, 2007.

Set a savings goal. How much of one's income should be saved? What is one's target saving amount at retirement. The answers are a minimum of 12% of one's income and a minimum of 12 times one's income, respectively. For some additional details, see How Much To Save - The NUMBER. More about this how on Friday, June 8, 2007.

Create environments and behaviours that enable saving. Saving is hard work and requires sacrifice - specifically delaying immediate gratification for future rewards. Changing environments and behaviours can significantly help. An example is buying only what one needs. More about this how on Friday, June 15, 2007.

Track and measure results. This is the most important part. How well one is doing versus one's savings goals is very important to know. I track my progress through periodic reviews. More about this how on Friday, June 23, 2007.

For more on Reaping the Rewards, check back every Friday for a new segment.

Photo Credit:, Michael Connors

This is not financial advice. Please consult a professional advisor.

Copyright © 2007 Achievement Catalyst, LLC

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