Does Investing in Your Own Retirement Mean Not Having Any More Fun?

Does it feel like everywhere you turn, people are stressing the importance of saving for retirement? Here at SoFi, we’re guilty as charged. We believe that building up a nest egg is important because we all want to be able to afford (and enjoy!) our retirement dreams.

But we also believe that all saving and no spending is no fun. So we’re here with some motivation to save money for tomorrow without suffering from FOMO today. It just takes a little creativity, a lot of diligence, and a “you got this!” attitude. (Because really, you got this.)

First, Get Your Head in The Game

So many directives to save, save, SAVE! might leave you feeling that if you aren’t living on ramen noodles and second-hand clothes, driving a less-than-perfect car and never having fun, you’re doing it wrong. But the only thing wrong about that is the mindset.

You don’t have to sit at home while your friends go out, skip the happy hour, or stick to window shopping (at least not every time). But to be successful you have to get your head in the game—brush up on your budgeting skills, give your self-discipline a pep talk, and keep your eye on the prize.

Set It and Forget It

The first step toward a good save/spend relationship with your money is to automate as much of your saving as possible. And if you have an employer with 401(k) matching, you can start by investing in your 401(k).

The money goes straight into your retirement account, and employers often match your contributions up to a point. It’s one of the easiest ways out there to “set it and forget it” and let your money grow. And, if you never see the money to begin with, it’s a lot easier to live without it.

Automated saving is still doable if you’re self-employed or don’t have an employer-sponsored 401(k), it just requires a little more diligence on your part to figure out which retirement plan is right for you. There are so many to choose from, including IRAs, Roth IRAs, self-employed retirement plans, and a number of others.

In addition to traditional retirement plans, a number of financial organizations also offer automated personal investing. Our automated investing platform, for example, give you control over your investments, help you automate withdrawals, and include unlimited access to financial advisers who can help you make smart decisions.

When you automate your savings and investments the key is to change how you see that chunk of your money—or don’t see it. Relegate your 401(k) contributions to the back of your mind, and you’ll be amazed at how much your account has grown when you check on it in a year or so.

If you’re more hands-on with your investments, set them up to come directly out of your checking account and treat them like any other recurring monthly bill—a payment you can’t ignore. The important thing is that you continue to make regular contributions to your retirement and savings accounts, that way you’re working toward building a nest egg for your future.

Budget Balances and Ratios

One of the most popular budgeting ratios for saving and spending is the 50/30/20 rule . In a nutshell, it goes like this: After you’ve figured out your post-tax income, put 20% into savings. A full 50% goes toward your “needs,”—housing, groceries, bills, and so on. The remaining 30% is your “wants,” like dining out and shopping.

Sounds easy, but in order for this budget to work, your “needs” must be limited to those payments that you absolutely cannot skip, like rent, credit cards, car payments, groceries, car payments, and utilities. That streaming subscription? It’s a “want.” So’s your unlimited data plan.

When you start to separate the true essentials from the nice-to-haves, it becomes more of a mental game than a financial one. If you can’t completely eliminate your cell phone bill, can you live with a limited amount of high-speed data per month vs. unlimited?

Can you make your morning coffee a part of your essential grocery bill instead of a daily stop at the coffee house? Like any other savings strategy, it gets a lot easier when you start to see your account balance climb.

Another way to ensure that you’re only spending what you’re allotted for each category is the envelope strategy . Especially for your discretionary spending, take out the amount in cash and put it in an envelope. Use it only for its exact purpose, and if it’s gone before the end of the month? You’ll just have to wait for the next paycheck.

Here too, the mental game can be tough—especially if you spend your budget before the weekend. Reconnect with your willpower by picking out a pump-up song and play it loud, put sticky notes on your mirror (or better yet, your wallet), or create a vision board that illustrates the life you want.

Planning and Tracking

Whether you use the 50/30/20 budget, envelopes, or another strategy, it’s important to plan meticulously, honestly, and conservatively. Then, much like if you’re on a calorie-counting diet, keep close track of everything you spend (eat) to ensure that you stay on track. Just like a food journal might shed a light on your snacking habits, a tracking app can do the same for your discretionary spending.

A seemingly infinite amount of budget planning and tracking apps are available, so it’s important to do a little research and figure out which one works best for your personal needs and style. Decide whether you want to be able to set reminders, notifications or alerts, categorize your spending, or even be able to cut yourself off.

This is one of those money-management tools that gets a lot easier with experience, especially after you start to form healthy habits. Planning becomes easier when you know your bill payment schedule by heart, and tracking becomes second nature, too. In fact, you might impress yourself with the amount of money math you can do in your head after a few weeks.

And maybe one of the best things about keeping close tabs on your money is the ability to plan and save for upcoming events that are important to you, like a friend’s birthday night out or a movie you’ve been dying to see.

Sneak in Savings

There are little hidden moments every day where you can save even more money than you planned for without feeling the pinch. For example, using your local grocery stores’ curbside pickup program is a great way to stay on your budget. Because you’re selecting your items online and paying upfront, it completely eliminates any temptation to impulse shop.

Then, save even more by using coupons, rebates, and store loyalty programs to earn cash back or points. Any money you save or get back? Pat yourself on the back, then put half in savings and enjoy the rest.

Another great way to find extra money is to bring your lunch to work or cook dinner at home instead of going out—take the difference you would’ve spent (assume $10 for lunch or $20 for dinner per person) and split it up the same—half to savings and half to fun! This can also be done with local restaurant coupons, half-off deals, BOGOs, or whatever deals you can find. And the more creative you are, the more empowered you’ll feel.

Make Your Money Work For You

Spending and investing in your retirement don’t have to be mutually exclusive—you can spend now, and save to spend later. Let the SoFi Invest team help you make smart decisions with your money so that it works as hard as you do.

When you open an automated investing account with SoFi you’ll have access to a credentialed team of financial professionals who can help you set your financial goals and develop a plan to help you meet them.

SoFi Invest also incorporates the cutting-edge investment technology of automated advising. And you can get started with just $100, so you can save for your future and enjoy your life in the now.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA /SIPC .
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