“The best time to plant a tree was 20 years ago. The second-best time is now.” – Chinese Proverb

The frenetic pace of our digital lives is dizzying! We are constantly on the move!  Too many things to do, people to see and places to go. Of course, we all want to be ready for retirement some day, but too often we delay planning for our future. Young professionals, in particular, are so focused on building their careers that they haven’t the time or inclination to think about a time when that career will be behind them.  To them, retirement is just a nebulous dream in the distant future.  Planning, saving and investing for retirement will just have to wait. 

If you have trouble focusing on the savings moves you need to make, changing the conversation from ‘retirement planning’ to ‘planning for your future’ has a better chance of capturing your attention.

Here are some strategies to help young professionals take charge of their financial future:

  • Make a plan. Identifying the right goals, developing your written plan to reach those goals, and implementing the action steps required to attain those goals can make all the difference between financial success and failure later in life. If you make a plan, you’ll be more motivated to build your savings and start investing.
  • Share your goals. Doing so is a critical component of goal setting. When you share your goals, you benefit from an instant support network of people who have a vested interest in your savings success. This also leads to conversation around your investing goals so that you can access the insight and knowledge you need to achieve them. Finally, it makes you accountable to others for the realization of your goals – a powerful motivator! 
  • Set resolutions. This can be overwhelming if you put them in all-or-nothing terms. Avoid making resolutions such as, “I will start saving and investing 50 percent of my income each week,” or “I won’t go to Starbucks anymore,” or “I will go to the gym every morning.” These resolutions are so rigid that if you deviate at all from these absolutes, you may feel like a failure. Instead, try setting goals that can advance your progress, such as, “I will go out for coffee two or three times a week instead of every day,” or “I will increase the number of times I go to the gym each week.” 
  • Take small steps forward. While accomplishing your biggest goals may seem daunting, savings and investment goals become attainable when you take baby steps. As you become more comfortable with saving and investing more, it becomes easier to add new goals to your plan. It will also be easier to sustain the growth you’ve accomplished.  Be sure to celebrate your financial success along the way!
  • Be patient. Savings and investment goals provide a sense of purpose and direction, but it’s easy to revert to past habits and abandon your resolutions. Rather than give up when your goals feel elusive, use the opportunity to modify your plan by selecting an alternative activity,  perhaps by adjusting the amount of savings or rebalancing your investments.
  • Think realistically. Suppose you want to save more money for retirement.  You initially begin with a goal to reduce your travel and entertainment budget so that you can have savings of $5,000 per year to deposit in a Roth IRA or a savings account. If you find that curtailing your travel and entertainment so drastically makes you feel deprived and miserable, you probably won’t stick to your resolution, and you’ll end up no better off than you are now. In other words, balance is the key. Austerity measures aren’t sustainable for the long haul!
  • Don’t be afraid to take a few risks.  This includes investing your retirement accounts in equities, both domestic and international, for long-term growth, despite the short term volatility you might experience.  It may include taking some career risks, such as reaching outside your comfort zone in terms of opportunities you pursue, or assignments you undertake, in order to move up in rank and compensation.  Remember, you have time on your side: time to recover and learn from your in the savings and investing spheres and elsewhere, so that your next professional and investment moves become smarter and more strategic.

Rather than espouse the view that it takes discipline and effort to build tangible wealth, I embrace the view that clarity and confidence about your finances contribute to a feeling of empowerment, which is more enduring and sustainable!  A CFP® professional can help you stay motivated, too.