Introducing my motto for 2011: Save $3 a Day!
Though I’m not one for easily-made/easily-broken resolutions to lose 10 pounds or learn a foreign language, I do love approaching a new year with thoughts of fresh starts and renewed goals. The thing that’s been on my mind the most for 2011: How can I help people save more money next year?
Why 2011? It’s time to take back our financial lives. 2008 and 2009 were the years of stagnant pay and unmanageable debt. 2010 was the year of trying to get back on our feet. I’m declaring 2011 the year of saving.
I know saving money is not easy. The unemployment rate just doesn’t want to budge, and more than half of Americans say they’re living paycheck to paycheck. Right now, around 45% of Americans 36 and older are at risk of being unable to take care of their basic needs during retirement.
And it’s worse for women: a woman still earns only 77 cents to a man’s dollar. Plus women spend fewer years in the workforce than men—34 versus 44 years—often because we take time off to care for kids or aging parents. As a result, women have less money set aside for retirement, and, sadly, are twice as likely as men to be poor in old age.
So I got to thinking: What if we try to take the pressure off by starting with just $3 a day?
Even if you’re strapped, you can manage to save $3. All it means is not buying one magazine, skipping a fancy hot chocolate, or even returning your library books on time!
And it’s worth it. If you save $3 a day, every day, in 2011, you’ll have $1,095 stockpiled by the end of the year, which you should transfer to an IRA. If you start at age 35 and follow this plan every year, by age 70 you’ll have $129,342 waiting for you in retirement (assuming you earned an average 6% annual return).
I urge you to consider making $3 a day your New Year’s resolution. It’s a doable, guaranteed way to be financially secure and happy in retirement—my sincere hope for all my readers.
And as you embark on your savings journey next year, I’m here to help! Shoot me comments or emails with any questions you might have. Check out my column in Redbook for some great ideas on how to stick with the plan, and spread the word: 2011 is the year of $3 a day!