Good Financial Reads: Strategies for Saving

Last week, I introduced the concept of getting conscious with your money decisions and developing purposeful intent toward how you use and manage money in your life. This week, I want to walk you through how to organize that for yourself.

Why? Because it will completely change how you approach every aspect of your life that has to do with money. See, I firmly believe that the way personal finance is taught these days just sucks — and mostly doesn’t make sense for many people. You have to understand how you will approach money if you want it to do your bidding.

One of the most common questions we get from high earning business owners and corporate executives is: how can I be saving more money for retirement?

Let’s consider the 401(k) limits for 2020. You can put $19,500 ($26,000 if over the age of 50) into your 401(k) pre-tax. While that is a good amount, depending on your expected retirement lifestyle, that may not be enough for you to live in retirement comfortably. In this video and post, we’ll look at retirement saving strategies and tax saving tips for high income earners. 

Let’s go back a decade or two.  You were in college starving yourself of nutrients and cash flow.  The task at hand was simply to make it through the month on Tombstone pizza and $348 in your bank account.  Fast forward a couple of years to when you landed that first job out of college.  You enter the workforce in the awkward professional attire you obtained 3 years prior for your first internship.  Here you are today with a much different outlook on life.  Your income is much higher, your vegetable intake has drastically increased, and your work clothes are much more appropriate.  

When I finally got out of school and started getting a decent paycheck, my first thoughts were mainly about all the things I could spend the extra money on. That nicer car, a new bike, better hotel and restaurant choices, and more. If you feel this applies to you, know that it’s perfectly natural and very common. In personal finance, the steady increase in spending as your income grows is called lifestyle creep. Some lifestyle creep is good and understandable. After all, part of why we are working hard is to get the things we like. There is the risk, however, that you get used to spending habits that hamper your ability to reach more meaningful long-term goals.