Why Is It So Hard To Save? U.K. Shows It Doesn't Have To Be...
J Thoendell stashed this in Personal Finance
Many people in the U.S., of course, feel this way too: I can't afford to save. I have student loans. I just don't make enough money. And these are very real problems. Wages have been stagnant for decades — especially in recent years since the recession.
But if you take someone like Bloomfield and enroll him automatically in a retirement savings plan — he doesn't do anything at all; pretax money just starts coming out of his paycheck — odds are overwhelming that he'll keep saving even though he thinks he can't afford it.
That's exactly what's happening in England. Bloomfield's employer will soon be required to enroll him — unless he opts out — but it hasn't rolled out to all employers. The law is being phased in right now.
"We've still got some way to go, but we've got 5 million people saving," says Charlotte Clark, the top government official for retirement savings in the U.K.
And even though people can opt out if they want, they're not. "We're seeing over 90 percent of people sticking with it," Clark says. "That's 9 out of 10 people are deciding that this is the right thing for them."
A little at a time consistently over time adds up.
It's hard to pay yourself first, even if you know you should.
You're right. It's hard for many people to put ourselves first, even if we know we should.
Automate when possible! Payroll deduction works for me.