Measurable: You need to have a way to quantify your progress. Similar to those fundraising thermometers that you see at PTA meetings, it’s figuring out how much further you have to go to reach your goal is easier when you have a visual. Calculating that you’ll need to set aside X for the next Y years – then setting up automatic transactions so you don’t even notice – makes this a manageable process.
Ask: When in doubt, find someone who can help you. No one expects you to be an expert investor overnight, and resources abound. Whether it’s your money-savvy cousin who has already put two kids through college and knows 529 plans like the back of her hand, or a trusted financial advisor, it never hurts to get an objective opinion from someone with experience.
Responsible: While you can automate payroll deductions to pad your 401(k), it’s not a good idea to set and forget your investments. The market will move up and down, and from time to time you’ll have to regroup. This doesn’t mean having a knee-jerk reaction every time the market fluctuates, but planning for taxes and rebalancing at the end of each year.
Transparent: I told my clients time and again that the worst thing you can do is be close-lipped about your plans among others, especially family. If you’re planning for retirement, be open and honest about your situation with your loved ones. Make sure they know what your plans are in the event something happens to you.
A good way to get started on your path as a smart investor is to take advantage of social calendar reminders, like checking your 401(k) when you change your clock for daylight savings, or participating in America Saves Week. You’ll find some helpful hints here and don’t forget to keep an eye out for our #ASW2015 Tweets for more tips.
Heather Pelant is Personal Investor Strategist for BlackRock. She is a regular contributor to The Blog and you can find more of her posts here.