After a number of weeks of fairly heavy content, we wanted to keep it short and simple today.

Earlier this week, over at The Simple Dollar, Trent Hamm wrote a post called “Five Very Simple Truths About Saving For Retirement.” He had some great points, but there was one in particular we want to share here:

“You will survive just fine with a slightly smaller paycheck.
Many people are absolutely afraid of the idea of seeing their check get any smaller. They’re barely making ends meet as it is – how can they possibly live with a smaller check?

Here’s the truth: most of us spend just a little more freely if we have ample cash in our checking account. It’s a lot easier to buy a bottle of soda at the gas station if you have plenty in checking. It’s a lot easier just to roll through Starbucks when it’s not going to grind you down to nothing.

Yet, when we look at our account and see it’s about empty, we’ll skip those treats with no hard feelings. They’ll come around again.

For an awful lot of people, all retirement savings does is spread out those treats a little bit. If you put, say, 10% of your income into your 401(k), you’re usually only dropping your paycheck by 7% or so. Even if you just save 5%, you’re only actually cutting your paycheck by 3%. That’s $3 out of every $100. For most paychecks, that’s a stop at the coffee shop – and that’s about it.

You won’t even miss it. It seems like a big deal, but when it comes down to the reality of your paycheck, it really fades into the woodwork quite seamlessly.”

Not only does this idea apply to retirement savings, but any kind of savings, and also includes paying down debt. The excuse of “not being able to afford” to save for your future is dangerous thinking. If you compound not saving with not controlling your cash flow (which you are likely not doing if you truly can’t afford to save), your future is not going to be a very positive experience for you financially.

There is almost always a way to be able to put a little bit aside today. You just need is the dedication to do it.


  • Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.