One of the popular New Year’s resolutions is a promise to become more financially fit, but these days it seems a difficult promise to keep.
According to the U.S. Department of Labor, there are 12 million unemployed people in the country, and even those who have jobs are finding it difficult to make ends meet.
How is it possible to save money when budgets are already so tight?
It is a matter of discipline and habit, said Erna Morgan McReynolds, managing director of wealth management and financial advisor of The Morgan McReynolds Group at Morgan Stanley Wealth Management.
“People who set up a life plan, they have a lot more money,” McReynolds said. “They have learned to live within their means.
“The whole point is to start with a percentage to save. That way, as you earn more money, the amount you are saving will grow. It doesn’t matter the sum, pick a percentage.”
McReynolds saved 25 percent of her income from the time she began working. She said in the beginning it was difficult because many of her associates lived in better apartments and drove nicer cars. However, she now feels the benefit of blindly adhering to her 25 percent rule.
Although there are different challenges at different stages of life, and young people just starting out have different considerations than retirees, most financial advisers agree that a savings plan is the first step to financial fitness.
“It is natural to think you can wait, but you can’t,” said Sarah Manchester, a financial adviser at Edward Jones in Oneonta. “The thing is, life gets more expensive.
“You start out and you may have some college loans to pay back. But then, you get married and have a family, and then you are saving for college for your children.”