Look in the Mirror

I am not passing judgment on anyone's choice for his or her money. Spend every dime, plus a few of VISA's dimes as well, it makes little difference to me, but I do feel that people should be honest with themselves.

Observe your spending habits and make conscience tradeoffs. If you need a new furnace, that's understandable, but remember it's a tradeoff. If you start exercising your consciousness it will gradually creep into every purchase and might help you sacrifice something besides your retirement when a big purchase isn't optional.

For reference, my parents lived in a moderately cold local for many years without a furnace because of the monetary tradeoff. They had to use a wood fireplace and electric blankets but they are in good shape for retirement. And I learned how to use a chainsaw and split wood as a consequence.

Getting Started

I wish there was a magic formula that would suddenly make saving for retirement easy, but if that was possible I suppose that the US population would be better prepared for their retirement years. The magnitude of the gap between ideal retirement assets and actual retirement assets is hard to quantify and any discussion seems to generate arguments about the assumptions. I think the following book covers many aspects of the discussion.

Coming Up Short: The Challenge of 401(K) Plans by Annika Sunden, Alicia Haydock Munnell

That’s a lot of reading though, so let’s keep it simple. There are two areas to consider:

    Saving (Average Joe)
    Spending

If you read Walter Updegrave’s article then you already understand that saving is the key and you need to maximize your savings rate to have the healthy nest egg that most of us want. Spending is on the other side of the teeter-tooter. If you can reduce how much you are spending while still having a happy and satisfied life then you open the door to many other choices. I plan to discuss both sides of the issue after establishing a baseline for discussion.