We all know that we should be saving up for retirement (if you haven’t already, check out our post about the Prairie Field Service 401k plan.) But for many, that’s all they really know when it comes to retirement planning. If that sounds like you, you’re not alone. We’re here to help with three tips and a few handy tools to help you feel less in the dark (and more in the green!) when it comes to planning for retirement.

TIP 1: PICK AN END GOAL

How much does it cost to retire? Well, it depends. There is no number that will work for everyone, but averages can help create a ballpark for your future goal. According to the Bureau of Labor Statistics, the average American retiree (they measured folks 55 and up) spends about $50,000 a year. If you live 20 years after retirement, that adds up to $1 million. If that number sounds scary, remember, it’s just the average. The biggest expense for retirees is housing, which varies greatly depending on where you live. If you retire somewhere where housing and general cost of living are low, you can lower that goal number quite a lot. 

What’s the magic number for you? This helpful tool from Northwestern Mutual can help you decide.

TIP 2: WORK BACKWARDS FROM YOUR GOAL TO DEVELOP A SAVINGS PLAN

Once you know how much you’ll need put away on day one of your retirement, you can develop a plan to get there in time. That calculator above can help you out. Here’s the bummer part: the plan might hurt a little. It might require that you spend less of your income today, so that you can invest it and turn it into more money for tomorrow. Which might mean changing a few of your current money habits to make it work.

TIP 3: STICK TO YOUR PLAN BY BUILDING GOOD HABITS

Like getting in shape, keeping a relationship strong or crafting the perfect fantasy football team, building healthy financial habits can feel immensely difficult. A good place to start is to dig into “why.” Here’s an enlightening start from Personal Finance Club, an everyday money advice column written by Jeremy Schneider. (You should totally follow him on Facebook. He may just change your money mindset for the better!)

Why bother building better money habits?

  • To maximize your happiness.

The goal of building wealth should be to maximize your happiness across your life, not to die with the most zeroes in your bank account.

  • To help you find contentment.

Realize that there will always be someone with more stuff, bigger stuff, better stuff. No person can ever be rich until he decides he has more than he wants.

  • Because spending is not wealth.

When you see someone driving a new BMW, living in a fancy house, buying rounds at the club or wearing the fanciest clothes, more often than not that person is broke, living paycheck to paycheck and up to their eyeballs in debt. Most millionaires are driving used cars, living modestly and putting their money to work to build wealth rather than burning it on overpriced stuff today.

  • And you’ll be happier with a plan.

For those of you who want to YOLO and live for today. You will be HAPPIER today if you have a plan and know you are set up for later. It will mean not going into debt up to your eyeballs and spending every penny that comes into your hand, but your happiness will increase both later in life when you’re not working at a diner and eating cat food as well as today when you have more peace and security.

Everything worth doing is difficult—especially at the beginning. But at Prairie Field Services, you have support. To learn more about Prairie Field Service 401k plan, read the blog. And if you have any questions about it, give Sam Rogers a shout or visit the Securian website.