Savings Tips for Millennials

Millennials are struggling to save and pay off student debt at the same time, putting them behind in the retirement savings area. The ones that are managing to save, aren’t saving what experts consider enough. There are some things they can do about it though.

Cut Costs

One of the biggest expenses on Millennials’ plates is housing. Before signing the lease to the really nice apartment with a pool, dishwasher and other extras, take a moment to reconsider. Most people can probably get along just fine without a few of the extra amenities and put the rent savings aside for retirement.

Create a Budget

This goes for everyone, but Millennials should get into the habit of creating a budget early on. Tracking spending can help determine how much money is spent on necessary purchases and how much is spent on extras. After creating a budget, it is easier to put more into a retirement savings account.

Adjusting Savings

Millennials should make it a goal to increase how much they save for three months. This can prove it is possible to save more, with a few lifestyle adjustments. It might mean having to cook at home more than eating out with friends, but it will be worth it later on.

These all seem like fairly easy tips, but putting them into practice is the difficult part. Millennials are in the spot where they’ve begun a career and are probably making more money than before. However, instead of saving the extra, Millennials, like many others of all ages, tend to increase their spending.

The tips listed about can help deter this habit and get Millennials on the right track for retirement savings. For those who haven’t yet set up a retirement savings account, contact Mountain West IRA. They have an option that is right for everyone.

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Long-Term Investor Traits

Long-term investors take a different approach to creating and molding their portfolio. They tend to think different when seeing how an investment will grow over a long period of time, instead of trying to rich quick. Here are a few things long-term investors do:

  • Don’t chase a “hot tip”

They don’t pay much attention to what others are doing or tips they might get from them. They believe in researching an investment themselves and deciding if it fits into their portfolio.

  • Don’t stress the small changes

When an investment value fluctuates, many investors drop them and run for the hills. Long-term investors hold out, knowing it will straighten itself out in the end.

  • Stick with their strategy

Some investors switch up their strategy whenever they stumble over a new one. Long-term investors find one that works and don’t waver.

  • Focus on the future

It can be hard to see the future potential of an investment, especially when looking at how it has performed in the past. Even though this can sometimes be a decent indicator, it isn’t the be-all and end-all.

  • Have a different perspective

Long-term investors adopt a long-term perspective. This is different from focusing on large short-term profits that help people get in and get out with a chunk of money. They think farther ahead and less about the immediate earnings of an investment.

Many people turn to long-term investing when supplementing their retirement savings accounts. Mountain West IRA offers many alternative assets for investing with a self-directed retirement plan. Learn more about their plan and investment options here.

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The Lazy Man’s Retirement Plan

At the end of the day, most people just want to relax and turn off their brains. They don’t want to think about their retirement accounts or investments. However, not keeping these things in mind, and making time for them could be detrimental to the future.

With time, life has become about convenience. People want things done fast, and with the least amount of stress possible. Investing and managing money is neither of those things. To get the “lazy person” to invest and save for retirement, it needs to be made simple.

One way to make things simple is to have a certain amount of money pulled out of each paycheck. This way the investor doesn’t have to think about it, the money is automatically put into their retirement account and begins gathering interest.

Open an account outside of work. Mountain West IRA offers many types of retirement accounts for investors to provide investing freedom. For those who don’t have the time to learn to play the stock market, or don’t want to, Mountain West IRA offers other, simpler investing options. They could invest in real estate, precious metals and more.

Start early and let the money continue to grow with interest over the years. This is probably the easiest and simplest way to get money for retirement. However, it might not always be enough, which is why there are other investment options. It might take a little more time and attention, but investing will help beef up retirement savings.

For those interested in opening an account outside of work, contact Mountain West IRA and talk to them about their retirement account options.

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Borrowing Against Your 401(k)

Many people believe borrowing from their 401(k) account is a smart idea because the interest rate is generally lower than a commercial loan. While that might be true, it doesn’t help with the ultimate goal of long-term investing. Here are some of the reasons why borrowing from a 401(k) isn’t the best choice:

  1. Stop Saving: Many plans won’t let investors make any contributions to the account until the pay off the entire loan. Or the borrower will be unable to make contributions because they will paying off the loan. Either way, there is no money growing in the account.
  1. Financial Red Flag: If someone is having to borrow from their 401(k) after exhausting all other options, it could be a sign that they are living beyond their means. This is a habit that could possibly follow them into their retirement years, making it difficult for them to retire with a decent amount saved.
  1. Career Issues: Often these loans must be paid back immediately if the investor quits their job. That could trap them in their current job, or cause issues if they suddenly lose their job.

Before an investor borrows from their 401(k), they should think it through completely. Use a different way to finance the loan if possible. Or, maybe they need to reevaluate their lifestyle and why they need the money in the first place. Borrowing from a retirement account could have significant long term consequences.

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Saving for Retirement and Paying for College

It can be a tough decision for most people when choosing the most beneficial way to spend or save money. Many people think choosing to invest in their retirement is a better option than paying for their children’s college tuition and here’s why:

  • Teens applying to college, can apply for student aid. Students are often eligible for scholarships, grants, and loans to help them cover the cost of tuition. Many students work part time during college to help pay for the fees as well. They do have some options when paying for college other than having their parents finance it.
  • While students have alternative ways of covering the cost of college, their parents don’t have many alternatives when it comes to financing retirement. What they save over the years is usually what they will have to live off during their retirement years. Some retirees are lucky enough to find part-time work if they don’t quite have enough money saved up, but some can’t because of age or illness.

You can save for both retirement and still help pay for college by starting early and making retirement the first priority. Before the kids come along and while they are still young, save as much as possible in a retirement account before putting anything in a college savings account. Time and compounding will be on your side.

Mountain West IRA offers many different self-directed IRA options when it comes to retirement accounts. They will have one that can help you save for retirement before saving for the college years.

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