Natalie McNeal turned being smart with money into a career: She’s the editor of The Frugalista and is always looking for a smart way to save a dollar for the future. She spoke with us about how to change how we view money and better plan for the future.
Do you think we spend too much time on the short term with money, and not enough on the long term?
I think it’s important to watch our money in the short term so that we have enough saved for the long term. All of the money that we spend on unnecessary fees, services that we don’t use and clothes that we don’t wear could be saved for retirement. If you’re younger, taking advantage of the time on your side to save is most important.
How do you recommend new savers get into the habit of putting money away for retirement?
I say that new savers should treat saving like a business – start out small and then grow the amount each year. Treat it as part of the basic needs in life: food, clothing, shelter and retirement savings!
Here are some easy rules:
1) Always pay yourself first. Try to automatically save 10 percent of what you earn.
2) If you can’t save 10 percent of earnings, at least try for $25 per month.
3) If you have a 401(k) through your job, set it up to save enough for you to get a match if your employer matches.
4) Each year, try to increase the amount of money you save. Set a reminder on your electric calendar when you want to increase your retirement savings.
What are some misconceptions you see about saving for the future online?
Some people are more nervous about saving online than they are about saving, period. Don’t let the way you save stop you from saving. Please take advantage of the time on your side.
If you could go back in time and make your younger self set up a retirement account, would you? Why or why not?
I did set up a retirement account. I have a 401(k) from when I worked full time. I also set up an IRA. I WOULD tell my younger self to save even more money and to cut out the frivolous spending much quicker. I saved consistently, which is good, but I should have saved more.
What are some ways to save money and put it towards the nest egg people don’t think about?
Work two jobs, if possible. Work one job to live and another job to save. Also, every time that you get a bonus or extra cash, save half for retirement. You can have some fun with the money, but always have some fun with your nest egg!
What do you see in the future for personal finance and retirement saving?
I see more young people using IRAs to save and fewer 401(k)s. With more people pursuing freelance and contracting careers, government pensions and corporate 401(k)s won’t be the route that many Americans take anymore. Younger people are going to have to take saving for retirement into their own hands and figure out the best uses for their money. Americans are living longer, but if we are smart without money, it doesn’t mean that we have to work longer if we don’t want to.
For more of Natalie’s insights and ideas, follow her on Facebook and Twitter.
