Pay yourself first
A top recommendation from any financial adviser is to set aside money for your retirement savings and emergency fund before you start spending. It can be a difficult concept to embrace, especially when your immediate concerns are the looming monthly bills.
But those who do practice the habit of saving first, with automatic savings accounts and 401(k) contributions, often find they don't miss that money when they don't see it in their paycheck.
"They tend to adjust their spending to what's available," says Mike McGervey, CFP professional, president and founder of McGervey Wealth Management in North Canton, Ohio.
When paychecks in McGervey's household went into the checking account, unexpected expenses seemed always to eat into the funds available for savings, he says. About 10 years ago, the McGerveys decided to redirect those paychecks into investment accounts.
"Now we have those gross assets hit our invested assets and just push out what we need to live off each month," McGervey says. "It's another form of paying ourselves first."