What’s keeping you from being a millionaire?

Bad habits that should be avoided when saving for retirement.

Man carrying a bag of money

Man carrying a bag of money

According to an infographic published by Transamerica Center for Retirement Studies, 14 percent of Baby Boomers have a written retirement strategy. When it comes to Generation X, 27 percent have taken a loan or early withdrawal from their retirement savings. Millennials are faring much better with 70 percent of them already having established retirement accounts. But it begs the question, what bad habits are keeping people of various generations from becoming millionaires?

  1. Only relying on saving at the end of the month – Usually money is tighter at the end of the month after all the bills have been paid. Instead, contribute to your savings account at the beginning of the month and then budget the remainder. Tracking your spending throughout the month will allow you to see where your spending leaks are and will assist in helping to cut out compulsive spending.
  2. Determining a set savings rate but never adjusting it. Set clear financial goals, monitor your progress, and assess if you are meeting your goals. In addition, don’t forget to increase your monthly savings contribution when you get a pay raise.
  3. Conservative investment approaches – When you are young, you can afford to take a more aggressive approach to your investments. Although there is risk and uncertainty in investing in the market, the reason for investing is to grow your money. Being too careful will prevent you from achieving maximum growth potential. As your age increases, you can decrease your aggressiveness to a more conservative approach to protect your gains.
  4. Don’t wait until tomorrow – In other words, don’t procrastinate. Putting off contributing towards employer sponsored retirement funds could cost you money in the end. This includes not tapping into any employer matching funds that you may be eligible for. Do what you need to do and get it done. You cannot afford to procrastinate if you want to be a millionaire.

Take time to check your bad habits at the door, and begin earning to accumulate as opposed to spending. Think about needs verses wants, and spend wisely. Create a budget, track your spending, and set a goal to becoming a millionaire. Be in control of your destiny and financial life by doing the little things that add up over the course of time, and have a little fun along the way. 

Michigan State University Extension has HUD/MSHDA certified housing counselors on staff to assist with the difficult process of foreclosure. To find a counselor near you, visit www.mimoneyhealth.org or call your county extension office.  Michigan State University Extension has released a new toolkit for homeowners who are experiencing or have previously experienced foreclosure. This toolkit will equip these individuals and families with tools to help them recover their financial stability, in the case that a recovery of their home is not possible. The toolkit is available to download free at MIMoneyHealth.org.

Michigan State University Extension offers financial management and home ownership education classes.  For more information of classes in your area, go to either http://msue.anr.msu.edu/events or www.mimoneyhealth.org.

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