Ghosts, goblins, and open enrollment are creeping up on us this Halloween season. While making contributions may feel haunting, with enough time and the right plan in place, your 401(k) could turn you into a millionaire! Here are a few steps to get you moving in the right direction:
Step 1: Get Cash Flow Positive
Do you spend more than you save? Start your course correction by regularly checking and organizing your spending. Being mindful of where your money is going is the first step, then cut unnecessary spending and work toward becoming cash flow positive.
Step 2: Save for Emergencies
Now that you’re saving more than you spend - congrats - put those savings into an emergency fund. A great first step toward financial wellbeing is having enough money saved for you to live on for 3 to 6 months. Your financial wellness advisor can help you decide what the right amount is for you.
Step 3: Contribute
Once you have a grasp on your spending and you have your emergency fund set aside, start contributing toward your 401(k). This task doesn’t have to be grim. Talk to your financial wellness advisor about setting up horror-free automated drafts straight from your paycheck and watch your savings grow! Remember, even a small contribution compounds over time. So cut your daily coffee run and contribute your money to your future self instead!
Step 4: Meet Your Match
If you work for a large company, your employer may match part of your contribution. Over the course of your job, you could be leaving behind thousands if you don’t contribute enough to get the full match. This is free money, so don’t be scared - contribute the max match if you can! Your future self will thank you.
Step 5: Circle Back
Things change - goals, fees, investment options, oh my! Don’t let a magic 8 ball guide your future. Stay up to date with your 401(k) and investment strategy. A yearly appointment with your financial wellness advisor could easily accomplish this goal in 30 minutes or less, so put it on your calendar and be your own financial psychic.
Trick your scary money nightmares by treating your 401(k) this enrollment season.