Are You Saving Enough? | Valet.

Maximize the Opportunity for Free Money

There’s a big difference between needing $500,000 for retirement and depositing half a million bucks into your bank. Even if you have absolutely nothing set aside at age 35, you could start saving $500 a month and earn, on average, six percent in interest or investment returns. Compounded monthly, that would get you about $502,000 by the time you turn 65. Amazingly, a whopping $322,000 of that would be earned from interest. What’s more, matching contributions from an employer will help you build your savings even faster. According to a recent Vanguard study, about 20 percent of American workers don’t participate in their company’s 401(k) plan. But saving enough to get the full match from your employer is the easiest way to bump your percentage without shrinking your take-home pay.

Delay or Defer Gratification

Instant gratification is a curse to any savings plan. But we’re constantly driven towards it, partly because of the ease of online shopping and the common practice of charging it to a credit card and dealing with the consequences later. “More than simple wasteful spending, instant gratification may sometimes include necessary and functional purchases—just at the wrong time,” says Paul Sydlansky, founder of Lake Road Advisors. “For example, many people like driving a new car with the latest technology, but do you really need it?.” He offers the following ways to defer gratification and put any purchase into perspective.


Make a list of wants, and save toward large purchases so you can pay for them in full and in cash. These don’t have to be major purchase like a home or car, but could be a vacation, a household appliance or that new Ultra 4K TV.


Use your debit card for purchases, not a credit card. If the money isn’t available in your account, it will keep you from making purchases that you can’t afford right now.


Leave credit or debit cards at home and use only cash.

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