The Two Biggest Road Bumps When Saving For The Long Haul | HMM 48

EPISODE 48

[INTRO MESSAGE]

[00:00:08.6] ANNOUNCER: Welcome to the Her Money Matters Podcast, the podcast to help you take control of your finances. Join your host, motivational money coach, Jen Hemphill, as she shares with you practical, simple money insights into real life stories by women like you.

Let’s get to it.

[DISCUSSION]

[00:00:27.1] JH: Hey, hey, it’s Jen Hemphill. Thanks so much for tuning in to the Her Money Matters Podcast. We are nearing episode 50 and that is huge in my book. I’m excited for that. I’m excited that we are in the month of May. It is a sunny day here in the Her Money Matters Podcast headquarters so I am excited. May is probably one of my favorite months probably because it tends to be spring. Probably because it’s my birthday month. Probably because Mother’s Day is that month, so many things happening in May, so it just makes it special for me. So let’s talk about today’s episode.

Today’s episode I think is an important one this month. In the month of May, we’re going to focus on long term planning. So I have some great guests lined up for you excited to share those with you. In today’s episode, we’re going to talk about the one mistake many people make that you can avoid. We’re going to talk about the two biggest road bumps when saving for the long term. We’re going to also talk about four actions that you can take right away so you can get to doing that today. And, I’m going to share with you two reflections to always remember when thinking about the long term savings.

So before we do that, as usual I want to give a quick shout out. Today’s shout out goes to Shannon. She lives out in the DC area, she recently joined us in our Her Money Matters community and I really love how she has jumped right on in with the conversations and is not afraid to ask for support nor — she’s not afraid to talk money, which is great. Or if she is afraid, she goes ahead and just talks about it anyway. So I really respect that and admire that and I’m excited to have you in there Shannon.

So having said that, that Shannon just has not been afraid to ask for support, you’ve got to remember that you don’t have to do this alone and handling your finances, getting motivated around your finances, taking control of it is something that you don’t have to do alone. You shouldn’t have to do this alone. Which reminds me, stay until the end of this episode because I do have a special announcement on some changes for the Fearless Money Sisterhood program. So don’t miss that, stay to the end because I will have those special announcements on what changes are coming up, so stay tuned for that.

So let’s go ahead and get started for today’s episode. So let’s talk about what long term saving may be. So for the purposes of this episode, I’m really going to be talking more in terms of retirement. Having enough money for retirement, but of course, it could be some other things like maybe saving for college for your kids especially if you’re starting early. It’s hard to figure out how much do you save? Especially with the cost of colleges going up so much all the time but for the purposes of the episode, I’m just going to be referencing more to retirement, all right?

Now statistics show, I read a recent or somewhat recent Forbes article that shared that 68% of Americans aren’t saving or aren’t contributing or aren’t signed up for their employer’s saving plan and self-employed numbers are probably even lower that’s my hunch. So I wanted to share that with you because there’s definitely a lot more people that could be saving towards retirement but aren’t for various reasons and I think one of the reasons is this one mistake that they make, but you can avoid this and this mistake is focusing on the unknown like what you can’t control.

So possibly worrying about outliving savings, because you can’t control that. You can’t control if possibly outliving savings. You don’t even know when you’re going to live until, right? So that is a big mistake, is just focusing on what you can’t control. So you can’t focus on the unknown, you’ve got to focus only on what you can control. I mean really, if you think about it, if we think that we can’t possibly save enough, we can put ourselves in denial possibly. Because if you’re thinking, “Oh, that’s not going to happen. Well I’m never going to save enough,” right? You’re going to put yourself in this denial of “I can’t do this”, which leads to inaction and we don’t want that. Don’t make that mistake. Focus only on what you can control.

Now let’s talk about the two things that get in our way. You may think that I am going to say debt or maybe not having extra money or something similar, but that is not the case. Here’s the deal: If you think about it, debt is what happened in the past. What you’re paying on debt is really going towards the decisions that you already made. So that’s the past, that’s decisions that you have already made. That’s what debt is about, that’s what is happening with debt.

But on the other hand, retirement, right? When you think about the long term savings, when you can save when you retire completely, that is like thinking in terms of retirement, not the savings themselves. The savings is different, but in terms of just thinking about retirement is not a decision. That is something that’s going to naturally going to happen. I guess you can continue working forever and ever but why would you want to? Maybe there comes a time where you’re not going to be able to because of age or maybe your health.

So it’s, the retirement in those terms, is really in my view it’s not a decision. It’s going to happen, is coming, it’s not a choice. It’s something that’s going to naturally evolve. So I want to make sure that you think in those terms. Debt doesn’t get in the way. Debt is something that happens in the past meaning you are paying towards to the decisions that you have made in the past and retirement is more about something that’s going to be evolving. It’s not a choice, it’s going to happen. Okay?

So the two things that get in the way, one is ourselves. Why? Because we let fear just become an obstacle. We maybe aren’t sure on what to do, maybe we have had some negative past experiences? So that’s one of the two things, and the second thing is that because retirement seems so far off, or at least when we started or people started telling you that you need to save for retirement, it just seems so far off. You get into this mentality of, “Well, I can do that tomorrow,” right? We end up procrastinating and delaying things for another day and sometimes, that spins out of control. Because we continue to procrastinate day after day after day and that doesn’t do any good for saving for the long term. It doesn’t do any good to help us prepare for retirement.

So there are things that you can do. There are some things that you can do, some actions you can take, there’s four actions that you can take to combat those two things. One is to give yourself permission to get excited about it. It doesn’t matter if you don’t even know how you’ll get there because bottom line, you deserve to live a good, comfortable life. That’s it. You deserve it, especially if you’ve worked all these years and you decide to retire, you deserve it. So you’ve got to give yourself permission to get excited about it.

The second action is to get clear on what gets you excited about life. If you’ve listened to my podcast before you may have heard me talking about getting clear on what you want, right? So in this case, the clarity that I am talking about is more specific. It’s not just thinking, “I just want to have enough for retirement,” or, “I want to have enough for kid’s college fund.” But I’m talking about more specifically what this looks like for you, and let’s not get ahead of ourselves in terms of what number that is because that’s not what I’m talking about. You need to do this before you figure out that number. You need to figure out what your life want to look like, what impact having that “perfect amount” would make, what things you would do. So get really crystal clear and specific on what that would look like for you.

The third action to take is to figure out what that long-term number looks like. So of course, that’s a complicated number to figure out, what this magical number, if you will, looks like and how to arrive at this number. There are calculators out there but really for me, I suggest you talk to someone. That’s when you talk to a financial planner. They really have all the knowledge, the tools to be able to tell you. They figure out all the complicated number so they can tell you what this “magical number” is, what a good range you should have to live comfortably because they do different scenarios. If you live up to this age, or those type of things, they can tell you how much you will need and it’s not just about the different scenarios as far as the age but they take a lot into account.

So definitely, that’s my suggestion. To be able to look at what that actual number looks like is to talk to a financial planner. They are your best resource for that and if you want to learn more about financial planners, there’s two episodes that I did, Episode 16 is on how to look for one, what goes into that and then Episode 33 I had a guest, Katie Brewer and she answered a lot of great questions in that episode. So those two episodes, I’ll make sure to link them up in the show notes so you can refer to that.

The fourth action to take is to really just focus on the next step and what you can do right now. Don’t focus on, “I’ve got to get X amount of money saved up,” because that might seem overwhelming, right? So just focus on what that next step is, because saving for the long term is not a quick process. It takes time so focus on what you can control and do right now and that’s the next step. So the next step maybe finding a financial planner or it may be opening up some sort of retirement account or it may be freeing up some money so you can be able to save that extra money for retirement.

Whatever that step is for you, that next step, just focus solely on that and once you finish that step, you celebrate it because you got to acknowledge that you did a great job on that and then focus on the next step. So don’t be focusing on that overwhelming number, “Oh my gosh, we’re never going to be able to save that amount for retirement,” but focus on the immediate next step and two things that you really should reflect on, especially when it comes to saving for the long term is that tomorrow comes more quickly than you think.

Normally, we tend to say a lot of, “Time has sure flown by,” especially with our kids. “Oh my gosh, I can’t believe he’s a certain” — whatever age like, “I have a 13 year old that I’m still trying to grasp that I have a teenager because time has flown, right?” So tomorrow definitely comes more quickly than you think and there are definitely things that you can do right now to get to that long term number. You can definitely do that, don’t let that big number, the one that the financial planner calculates for you, what you need, don’t let that overwhelm you. So again, there are things that you can do now and remember that tomorrow comes more quickly than you think.

The second thing to reflect upon is to focus on the now. Don’t focus on what you didn’t do. Maybe you’re starting late or you feel like you’re starting late or maybe you haven’t started at all. Maybe you haven’t started to save for retirement or maybe it’s later on in your life and you don’t have much savings, don’t worry and focus on that. Just focus on the now, because focusing on what you didn’t do or what you don’t have is not going to help you move forward, okay? That’s so important. Don’t focus on what you didn’t do, don’t focus on what you don’t have, but focus on the now and what you can do at this moment. It doesn’t matter how small that step maybe for you as long as it’s a step. Its step forward, don’t stay standing but take a step, all right?

So I hope that you have gotten value out of what we talked about today and let’s go ahead and recap what we discussed today. We talked about the one mistake many people make but you can avoid and we talked about the two biggest road bumps when saving for the long term. I shared with you four actions you can take right away and we also talked about two reflections to always just keep in your mind when saving for the long term.

So I challenge you if you do anything, if you take anything away or do anything from this episode, I do definitely challenge you to first really get clear on what you want your future to look like. That’s going to help you when you talk to a financial planner, that’s going to help motivate you and just get in the game for saving for the long term. It’s also going to help you in terms of thinking saving for the long term for your kid’s college. Those type of long term plans, you’ve got to have a clear picture as to what you want your future to look like and get super specific about it.

So now really quick, I mentioned at the beginning that I had an announcement about the Fearless Money Sisterhood Membership Program. You may know about it if you’ve been listening for a while. It’s a month to month membership program for support accountability to help you get confidence and take control of your finances. So it’s a fairly new program and it’s currently $25 a month where you can cancel that anytime but we’re making some changes as we are growing and prices will be going up. We’re also adding in enrolment fee and I’m going to open the Fearless Money Sisterhood for enrolment quarterly, so it won’t be open until July.

However, I am going to be opening a small window starting today, Thursday, May 5th, if you’re listening when this actually goes live in iTunes from today for seven days or actually eight days if you think about it. So I am opening it up to Thursday, May 12th, okay? So you have just a short window for the last chance to get in at $25 a month before prices go up, before you have to pay an enrolment fee and before you even have to because you’ll have to wait until July 1st. Once Thursday, May 12th rolls around, if you don’t get signed up for this $25 a month deal, then you’re going to have to wait until July 1st.

So you can do that at jenhemphill.com/fearless. All that will be in today’s show notes, which you can take a look at jenhemphill.com/48. You can refer to the link to join the Fearless Money Sisterhood. I’ll also reference the statistics that I found, and for those two episodes about financial planners.

So thanks so much for joining me today and we’ll chat again next Thursday.

[END]