According to Northwestern Mutual’s 2018 Planning & Progress Study, more Americans are worried about money (44%) than either their personal relationships (25%) or work (18%). So if you’re concerned about having enough money for retirement, you have company. Putting a plan in place can help reduce anxiety about your financial future.
Budget Basics
The first step in budgeting for your retirement goals is making sure you have a budget you can stick to that includes putting aside money regularly for retirement. Start by listing all your monthly expenses line by line. Include fixed expenses that are consistent each month, such as rent, auto loans and a gym membership. You’ll also have variable expenses that can change, including gasoline and groceries. Make sure your budget includes both your needs (food, mortgage, transportation) and your wants (entertainment, vacations, etc.).
Also make an inventory of items that need to be paid less frequently such as veterinary care and tax preparation. Add up the amount you anticipate spending on these items annually, divide by 12 and include that amount in your monthly budget.
To eek out more money each month that you can earmark for retirement, you need to find a way to cut expenses where you can. There are different strategies for savings depending on each type of expense in your budget. While items that are fixed-cost needs must remain in the budget, try to lower costs on any variable needs, such as by using coupons to save on groceries. You might also be able to reduce costs on some items that appear to be fixed-budget items simply by shopping around. For example, you might find a lower rate on your car insurance by comparing prices among carriers and making sure you’re receiving all applicable discounts (e.g., for having an anti-theft device).
You have more room for savings when it comes to the wants in your budget, because here you have the option of eliminating items entirely — whether it’s on a permanent basis or just temporarily. So maybe you can live without your streaming video subscription until you get your retirement contributions to your target level. For variable wants in your budget, such as dining out, you can try to save either by going to less expensive restaurants or by cooking meals at home.
Talk to your Fiduciary First advisor about how much of your income you should set aside in your budget toward your retirement goals. Contributing enough to your 401(k) plan to receive the maximum that your employer will match is a good first step, if your company offers this benefit. Having money automatically deducted from your paycheck can help to ensure consistent contributions. Also, for many people, money deducted before you even see it in your check is missed less. This is one reason many advisors recommend “paying yourself first.”
Summing Up: Savings Strategies for Every Budget
Think of savings in terms of the needs versus wants in your budget, and whether these expenses represent a fixed or variable cost:
• Fixed/needs: keep, but make sure it’s actually a fixed cost and not something that could be shopped around or bundled for savings such as homeowners insurance.
• Fixed/wants: consider eliminating temporarily or permanently —e.g., reduce or eliminate premium cable channels.
• Variable/needs: lower costs — e.g., adjust your thermostat to save on heating and cooling costs.
• Variable/wants: eliminate or lower costs —e.g., skip a vacation or substitute a cheaper “staycation.”
It’s important to remember the big (long-term) picture as you make spending decisions. When you find yourself tempted by a trip to the mall, an upgrade to your ride or the latest new gadget, try to envision in great detail the kind of retirement you’d like to have. It can be helpful to write this description down or put a picture of that oceanfront condo you dream of retiring to in your wallet right next you your credit cards so you see it before you spend.
The future will be here before you know it and you can take steps today to make that future a bright one by making smart decisions with your money today. Your Fiduciary First retirement advisor can help you plan and budget today for a happy retirement tomorrow.
Reference:
https://news.northwesternmutual.com/planning-and-progress-2018
Perhaps you’ve lost a job, faced an illness or have been delt a family crisis that emptied out your emergency fund. What are your next steps?
You’re eyeing center-hall colonials in your neighborhood and dreaming about the garden you want to plant in the backyard and all the holiday celebrations you’ll host. You’ve saved toward this goal and think you’re ready to pull the trigger. But the real question is: How much house can I afford?
Or is it?
Social Security’s financial cliff is coming closer into view. Experts project that the fund that pays for government retirement benefits through FICA taxes will be depleted within the next 15 years.
© 2026 The Participant Effect. All rights reserved.
