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It happened again. You started the month determined to keep spending within your budget, only to come up short on contributions to your retirement and other savings.  

Things break — that’s life. Computers crash, TVs stop working, appliances wear out, cars break down and phones get dropped. And it can be hard to stay on budget when they do unless you take steps to prepare. 

Smart savings strategy. You can’t expect things to never go wrong, but you can establish an emergency fund of at least three-to-six months of expenses for when they do. Good maintenance habits can also help minimize repairs. And be sure to take advantage of any purchase protection that might be available for items bought with your credit card. 

3. The Urge to Splurge 

We’ve all walked out of the grocery with “extras” we didn’t plan on buying or come home from the mall with a new sweater that was too good a deal to pass up — or given into the desire for a pricey mochaccino at the coffee shop. While occasional indulgences are rarely problematic, frequent ones can add up. 

Smart savings strategy. Bring a list to the store and avoid recreational shopping. And don’t grocery shop when you’re hungry — going to the supermarket with an empty stomach increases the chances that you’ll leave with a loaded cart. Spend cash to help keep credit card balances under control and set limits for online shopping (it’s just too easy to “click to buy”). If a purchase is beckoning you, consider layaway or wait to see if the urge passes. 

4. Dining out 

Eating at restaurants is a treat, but it can be easy to spend more than you intended. If your monthly restaurant tab is starting to look more like a car payment, there are things you can do to prevent your favorite eatery from taking too big a bite out of your budget. 

Smart savings strategy. Limit eating out to once or twice a week — or month, depending on your budget. Instead of fine dining, try informal, less expensive bistro meals. Alcohol adds a lot to the check, so limit consumption when dining out. Split a meal or have an appetizer instead of an entree. Look for early bird or happy hour specials and swap out a steak splurge for a less expensive pasta dish. 

5. Delivery Fees 

You can get almost anything delivered today, from cat food to a new car. But convenience can come at a hefty price. Whether for meals, clothing or other online purchases, delivery services can make everything you buy more expensive.  

Smart savings strategy. Drive to the store instead of paying delivery fees and forgo rush shipping. Don’t fork over hard-earned cash for meal delivery services, which often don’t even include tipping the driver. Eat in more — or use convenient curbside pickup instead. 

And Most Importantly … 

Whatever you do, there’s one way to prevent budget busters from derailing your retirement or other savings plans — and that’s to pay yourself first. Having retirement plan contributions automatically deducted from your paycheck is an effortless way to accomplish that. Put your financial future at the top of your budget each month to help ensure you can always afford what matters most. 

Lately, it seems we’ve all had to learn more about global economics than we’d like. Thanks to the COVID-19 pandemic, extreme weather in essential manufacturing regions and a container ship mishap in the Suez Canal that wreaked havoc on deliveries for months, there’s no shortage of reasons for soaring prices and low-stocked shelves. With so much uncertainty in the world and all around, you may feel like holding onto cash is a safer bet. But if inflation is on the rise, a dollar today could have less buying power than a dollar tomorrow.  

You may have had to adjust your budget to compensate for rising prices, but have you considered shoring up your retirement savings against the risk of inflation?  

Inflation and Your Buying Power in Retirement 

Inflation impacts the “real value” of investments in your retirement plan because the same amount of money may give you less spending power later. If your expenses are $2,000 per month now, you might need $3,500 during retirement, just to maintain the same quality of life — all thanks to inflation. 

Countering Inflation in Your Retirement Portfolio 

You’re probably aware of 401(k) plans — and may have even heard how they can give you a leg up on your retirement goals. If you have a 401(k) available to you through your job, however, you might still want to know more. Let’s look at some answers to frequently asked questions about your employer-sponsored retirement plan. 

Q: Why is a 401(k) better than a savings account? 

A: For the most part, a traditional savings account doesn’t offer tax advantages. A 401(k), though, allows you to put money aside for the future before you pay taxes on it. You also don’t have to pay taxes on investment earnings from the account as they come. Instead, you only pay taxes when you withdraw from your 401(k) during retirement. By then, you’ll hopefully be in a lower tax bracket. 

Q: How can a 401(k) improve your retirement readiness? 

A: Since your 401(k) is an investment account, you can take advantage of the considerable benefits of compounding returns, which can allow your money to grow at a faster pace than it would in a traditional savings account. This can help put you in an accelerated position to achieve your retirement dreams. Plus, having the money deducted from your paycheck automatically makes it easier to stay consistent with your investment goals over time — you can build wealth without having to think about it as much. 

Q: What are the risks of participating? 

A: Market volatility is always a possibility, so it’s important to understand your personal risk tolerance and create an investment plan that works for you. It’s also why it’s critical to review your retirement plan regularly and rebalance your asset allocation as needed. 

Q: Are there other advantages? 

A: Your employer might offer a match, providing you with a way to put even more money into your retirement account. Additionally, your employer might give you the option of a Roth 401(k), which can result in lower taxes during retirement. Carefully consider your tax situation and individual needs when deciding if a Roth 401(k) makes sense for you. 

Q: What if I quit my job? 

A: Money you put in, plus your investment earnings, stay with you no matter what. Money your company puts in becomes yours based on a vesting schedule. You can roll your 401(k) over to a new employer-sponsored retirement account or an IRA if you leave your job. 

Q: How much do I need to contribute? 

A: Work with your qualified financial professional to figure out how much you need to meet your specific retirement goals. You decide how much you put in from 1% of your salary up to the annual contribution limit. Some retirement plans also allow you to automatically increase your contributions each year, or you can bump up your deferral rate when you receive a promotion or bonus. Consider what you should set aside each paycheck to help you achieve your long-term goals. 

Q: When is a good time to join? 

A: Sign up for your 401(k) as soon as you can. Put time on your side when it comes to reaping the benefits of compounding returns. There can be significant opportunity costs by sitting on the sidelines too long, which can hamper your retirement readiness over the long term. 

Q: How do I sign up? 

A: Contact your company’s HR department for help opening your account and setting up payroll deductions. Enrolling isn’t hard at all — and it can be one of the most important items to check off on your to-do list in order to help ensure a more secure financial future. The specifics of 401(k) plans can vary from company to company, and there’s more to know than what we’ve covered here.  

Contact your qualified financial professional if you have additional questions or to learn more.