Along with the changing seasons, I’ve experienced a lot of change in my life recently. As you can see, I’m resuming my role as editor of Benefits Canada after a relaxed year off to take care of my second beautiful baby girl. In addition, we’ve been going through a major home renovation, which comes with its own upheaval.
As with all projects, the renovation had some scope creep, leading to some unanticipated expenses. And, as one does, we’ve used our credit to cover those expenses, as well as dipping into our savings.
I’m sure we’re not alone in this, but our relative comfort level with credit reflects a worrisome trend. In our highly consumerist culture, most of us feel just fine about spending money on luxuries as well as necessities—even if we can’t really afford them.
When I first started working, there was a point when my available credit actually exceeded my annual income. Now that’s a scary prospect…especially in the hands of a twentysomething with a lot of free time and few responsibilities.
Whenever we talk about DC plan members, we wonder why they aren’t saving more. Don’t they understand the consequences of not saving for retirement? Are they lacking in access to the right resources? Are they lazy, bored, unengaged or just plain irresponsible? But the simple fact is that spending is easy. Saving is hard. And saving for retirement—which, for a younger employee, can seem as though it’s light-years away—is even harder.
Saving requires discipline, commitment and, more importantly, a plan. It means living within your means and foregoing some of the things you want for what you actually need: a secure nest egg that will translate into an income stream to last you for the rest of your (hopefully long) life.
Working in the pension and benefits industry, I get it. Although we’ve splurged a little on this renovation, we’ve kept our existing retirement savings intact, we continue to make regular RRSP, RESP and pension contributions, and we’ve developed a plan to pay back the reno costs as quickly as possible. But not everyone strategizes this way.
Like the grasshopper who sang all summer, those who aren’t saving for retirement now will pay for it down the road. And, guaranteed, it will end up costing more than a new hot tub.
Get a PDF of this article.