Counting My Pennies

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Set it and forget it. No really!

August 4, 2009 By Megan Smith

While updating my monthly net worth, I was delighted to see that my TSP (Government employee 401(k) program, for those of you new to the blog) had grown a surprising amount.  Now, if you’ve been following the news, you know that July was an excellent month in terms of the market, so it’s no surprise that my retirement account grew.  In addition, I’m still contributing 7%, with a 5% match (with the goal of contributing 10% next year).

So I shouldn’t be surprised that my TSP hit a small financial milestone this month.  In fact, I shouldn’t pay it much attention at all, since even with contributions, it might drop in August.  Plus it’s not like I’m going to need or be able to access these funds anytime soon.

But the important thing here?  The contributions have been painless.  Sure, my take-home pay could be more.  But I don’t think about it.  I see that deposit in my bank account every two weeks and I don’t think about what happened to the money before it got there.  I don’t think about taxes or health insurance, because those things are not optional.  Somehow, planning for retirement has also landed in that “things that are not optional” category.  It’s just something that I have to do.

Set it and forget it.  And watch your savings grow.  It’s something you hear personal finance gurus say all the time.  Have money taken from your paycheck and put into a savings account or into retirement.  That way, you don’t have to think about it, and it’s harder to second guess those decisions or borrrow from yourself.

I have always prided myself on knowing where my money goes, so the fact that my retirement accounts are growing so much does surprise me a bit.  But I guess when I do think about it, it’s not big picture.  It’s $X every paycheck, and that’s okay, because in the end, the result is exactly what it should be.

So if you’ve been looking for a way to save, either for a big purchase or for the ultimate purchase – retirement, then maybe try this trick.  It’s something I should have figured out long ago, but it was just this weekend that I realized just how well the trick worked on me.

Filed Under: retirement

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