Sunday, March 23, 2008

Fool Yourself Into Saving Smarter

by Walter Updegrave

Four ways to make sure your best intentions aren't thwarted by the temptation to spend money now.

When it comes to saving, the spirit is willing but the flesh is weak. A recent TD Ameritrade survey shows that 40% of people who make New Year's resolutions cite saving more money as a goal. However, the same poll also found that nearly half of those who resolve to stash away more bucks abandon that plan within a month.
And that's a problem because saving is the single most important thing you must do to have a shot at a comfortable retirement.

That disconnect isn't surprising. "While some parts of our brains are geared for rational decision-making, others are hard-wired for immediate gratification," says Harvard University behavioral economist Brigitte Madrian.

The result is a sort of ongoing war inside your mind, with the rational part nagging you to save and the gratification side spurring you to buy a new car. When you consider that you can drive the car today but don't get to spend your retirement savings for decades, well, you can see what has the edge.

There are ways, however, to improve the rational side's odds of winning. Adopting one or more of these strategies will help you boost your savings and enter retirement with a larger nest egg.

More details here....

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