Budget + Retirement Savings = Financial Success

There are two critical components to a healthy financial future.

These two items are:

  • Establishing and living by a monthly budget
  • Saving for retirement every single month

Let me tell you about two situations.

Situation One

I have seen situations where a family has not lived by a budget. They do not spend every dollar on paper, on purpose, before the month begins. They have, however, avoided doing DUMB with 000’s behind it. They have some debt, but it is not outrageous. Maybe they have a car loan and some credit card debt.

This family has not lived by a budget, but they have been putting 15% of their pre-tax earnings into a retirement fund (401(k), 403(b), SEP, IRA, Roth IRA, real estate). Every single month. 15% of their pre-tax earnings.

Because this family has avoided signing up for large quantities of debt and has saved systematically for retirement, they will be able to retire with a healthy amount of income.

Situation Two

I have observed a situation where a family has been VERY frugal in their purchases. Never frivolous with their spending. Never turning to debt. They budget every single dollar on paper, on purpose, before the month begins. They live by that budget.

They have, however, forgotten one key line item in the budget: retirement savings. They never were able to force themselves to put away any of their earnings toward retirement. They did not get into the rhythm of putting money towards their retirement every single month.

The result? No debt at retirement, but they are flat broke and totally reliant upon Social Security.


  1. Put money toward your retirement every single month starting this month. Even if it is only $25/month. Do it now! Time is your biggest friend!
  2. Begin budgeting this month! Spend every dollar on paper, on purpose, before the month begins. Live by the budget.
  3. If you do (1) and (2), you will win financially.

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