Throughout the month of December, The Simple Dollar is posting a daily series focusing on specific activities you can do right now to set the stage for a great 2011. Out with the old, in with the new.

15. Get a library card and pick out a few books.

A few months ago, I wrote a detailed ode to my local public library. Among the great things available there that I mentioned included books, internet access, events, DVDs, CDs, audiobooks, and children’s resources.

A few weeks after that, though, I had a conversation with an employee of the Ames Public Library, asking for some estimates of how many people in the county actually have library cards. Ignoring collegiate students, she estimated that as few as 20% of the people in the county have a library card for this wonderful place.

That’s a shame. 80% of the people in the area are missing out on an incredible wealth of resources that are simply sitting there, waiting to be used for free.

If you’re in that 80% in your area, without a library card or a good grasp as to the abundance of things available at your local library, correct it. Get down to your local library, sign up for a library card, and see what the library has to offer.

What should I read? If you’re reading The Simple Dollar, you’re likely interested in improving your life, with finances being a part of that improvement. With that in mind, here are several books for you to check out and read during these winter months with that library card.

These books are all pretty widely available and should be found in most public libraries. If your library doesn’t have it, request it – most books can be obtained through interlibrary loan.

The Simple Dollar (my own book, discussing my experiences in rebuilding my own life)
Your Money or Your Life (the book that helped me to start turning my ship around)
The Total Money Makeover (the best debt management book I’ve ever read)
The Bogleheads’ Guide to Investing (the best investing book I’ve ever read)
The Complete Tightwad Gazette (the best frugality book I’ve ever read)
Getting Things Done (the best time management book I’ve ever read)

While you’re there, browse some of the books related to topics that interest you. What I often suggest to people who are not avid readers is that they check out a page-turner – a plot-heavy novel that will interest them. If you don’t have any ideas, go up to one of the librarians and simply say, “I’m looking for a good page-turner that’s something like my favorite television shows” and name a few of them. They’ll point you to the right place.

Beyond that, explore what else your library has to offer. Most libraries have a large selection of audiobooks (my preferred choice for a long road trip – which reminds me that I should pick one up before our next road trip). Many have a big selection of DVDs, too. Some offer community events of all kinds, which you can find out about by checking their calendar.

(One frequent complaint that people offer about using the library is that in some areas, homeless people congregate there. If this is a situation in your area, don’t avoid it. Get involved. Request that the library board change their policy about loitering at the library. It should be a resource available to everyone and if the chairs are taken up by people, that’s blocking reasonable use of resources.)

To put it bluntly, the local public library is a giant pile of free entertainment and resources, just waiting for you to use it. Go give it a shot today.

Throughout the month of December, The Simple Dollar is posting a daily series focusing on specific activities you can do right now to set the stage for a great 2011. Out with the old, in with the new.

14. Reduce your phone bill.

Two episodes in my own life are relevant here.

A couple years ago, I cancelled my business phone line and moved to Skype. It reduced the monthly cost of my business related calls by about $30 a month.

I figured that there would be significant drawbacks to the switch – limited availability and so forth. What I actually found was that Skype was, for my purposes, as reliable as an ordinary phone. I simply cannot remember a single time where using Skype for work purposes put me at any sort of disadvantage versus a landline.

This, of course, raised the question: why not just use Skype for personal use?

Similarly, for a long time, I had unlimited minutes on my cell phone – but I paid out the ear for them. I had this impression in my head that I used my cell phone a great deal and thus I needed unlimited minutes.

For six months, though, I kept my cell phone bills and took a look at how many minutes I was actually using each month. Even if I chose a limited minute plan that covered significantly more minutes than the heaviest calling month, I’d still be saving about $30 a month by switching plans.

If I chose a more restrictive plan, one that covered five out of the six months, I would be saving almost $50 a month.

These two stories have some key factors in common.

Knowing your actual needs for phone usage directly leads to saving money. Most of the time – and I’ve certainly been guilty of this in the past – people pay extra for a monthly service that covers everything that they actually do plus everything that they think they might do. The problem is that the “maybes” rarely occur and usually wind up being very expensive to pay for.

A much better approach is to simply pay for what you normally use, then deal with the exceptional situations as they come. For example, if you have a plan that covers 99% of your calling needs and saves you $30 a month compared to what you’re paying now, then you can use a small bit of that $30 a month to cover that extra 1% and still find yourself way ahead.

How vital is a mobile phone, really? In truth, most of the mobile calls we make can be handled at home, leaving the mobile for specific needs that can’t be met from a non-mobile device.

For example, over time, I’ve gradually moved most of my calling to Skype, which I can use on my iPod Touch anywhere where I find a wi-fi signal and (obviously) anywhere at home as well. This has reduced my cell phone usage and because I keep up on that, I was able to reduce my cell phone contract to a lower level, directly putting money in my pocket.

In fact, were it not for travel, I would probably move entirely to a “pay as you go” phone. I’ve ran the numbers several times and I seem to consistently find that my cell plan is just a bit cheaper per minute for an average month than a pay as you go phone.

I don’t suggest that people abandon their mobile phone. However, I do encourage people to rethink their overall phone plan. Replacing your landline with Skype, then making an effort to use Skype for many of your calls, will not only drastically reduce your monthly landline bill, but it will also lead to a reduction in your mobile bill as you reduce the number of minutes you actually need.

In any event, there are many options for reducing the monthly cost of your phone usage – and any reduction you can get in a monthly bill is money that goes straight towards improving your financial situation, whether through savings or debt reduction.

Throughout the month of December, The Simple Dollar is posting a daily series focusing on specific activities you can do right now to set the stage for a great 2011. Out with the old, in with the new.

13. Reduce your cable/satellite bill.

So many people find themselves at the end of a long day, worn out on the couch, mindlessly channel surfing for an hour or two before bedtime. They don’t really have the physical or mental energy after a long, compressed day to do much else, so they finish off their hours with a sitcom or a drama program on television.

There are several distinct things there that are notable.

One, most households get something on the order of twenty over-the-air channels for free. Get yourself a digital converter box and see what channels you can pick up over the air. In my area, we can get eighteen digital channels over the air for free. People in other areas can get more – sometimes many more.

These channels aren’t duplicates of each other, either. In our area, for example, we receive three different PBS channels very clearly and three others most of the time over the air. These sets have a bit of overlapping programming but, for the most part, the programs they provide are distinct. We also get multiple weather channels in addition to digital programming for all the major networks. This is all for free, mind you – no cable bill required.

Two, there’s an overwhelming abundance of programming available to surf through on Netflix streaming (and other services) for $9 a month. A bottom-tier Netflix account gives you unlimited streaming to your home for just $9 a month, which basically means you can sit in front of your television or computer, surf through tens of thousands of programs, and watch them all on demand.

You can get this service directly to your television if you have a current-generation video game console or a newer television. Barring that, you can get a Roku box for $60 (or so) that will give you access to all of this streaming programming – about equal to one month’s cable bill for many people.

The amount of programming available on Netflix’s streaming service is tremendous – and best of all, it’s all without commercial interruption.

Three, you can also watch a free DVD from the library or turn off the television and read a purely entertaining book, again, for free from the library. If you’re just looking for something to entertain you, check out a pile of entertainment from your local library. Rent some movies on DVD, take them home, and watch them. Check out some novels that interest you or perhaps a nonfiction book or two that seem intriguing.

If you’re just spending a couple hours a night seeking out whatever entertainment is available to you, why buy it? Check it out from the library instead.

Four, are you actually watching your channels? What channels do you actually tune into on a regular basis? If you’re paying for channels that you almost never watch, eliminate those extra channels from your bill. It’s silly to spend $15 a month on a cable channel that you watch for a couple hours every few months – you might as well just buy the movie on DVD at that point.

Spend a bit of time asking yourself what you actually watch. You might find that you can really cut your cable bill much easier than you might think.

Finally, the sense of being overly tired and the hour or two spent watching television might just be tied together. If you’re consistently finding yourself completely devoid of energy in the evenings, reducing you to a state where all you want to do is crash on the couch for a few hours and watch television before staggering off to bed, there may be other problems in your life. Are you depressed? Anemic? Do you have a vitamin deficiency? Are you being hit hard by seasonal affective disorder?

Whatever it is, it’s something that’s probably worth a doctor’s visit, just to make sure that you’re not suffering from something that’s easily treatable.

There’s also the question of whether or not you’re getting adequate sleep at night. If you’re finding yourself constantly exhausted in the evenings, it may be worth your while to just crash an hour earlier each night.

All of these solutions lead to one thing – a steep reduction or elimination of your cable bill. Whenever you reduce a regular bill, that means you now have the funds available to tackle other financial concerns in your life – getting rid of your debts, for one.

Throughout the month of December, The Simple Dollar is posting a daily series focusing on specific activities you can do right now to set the stage for a great 2011. Out with the old, in with the new.

12. Set up a truly useful calendar.

For the longest time, I used a tiny pocket planner to keep track of my appointments. I’d write in all sorts of things, from specific appointments I needed to keep to little bits of information I needed to recall.

This served perfectly well when I was a college student and continued to serve me well as a young professional, but as my life got more complicated – owning a home, getting married, having children, starting a small business – this pocket calendar began to get more and more overwhelmed. Things were scribbled all over the place. Arrows pointed from here to there, trying to squeeze things into tiny spaces. Shorthand began to be used, eventually to the point of being indecipherable.

At some point, I began to view the calendar not as a tool for making my life easier, but as something to constantly be wrestled with. Rather than being a stepping stone to success, it became a weight dragging me down.

The thing is, a useful calendar is a huge part of personal, financial, and professional success. Anything with such usefulness is usually rewarded by getting a very strong system in place before you even begin – and that’s the case with a calendar.

I’ve spent the last three years maximizing my own personal calendar. I’ve restarted from scratch several times in the process until I got it right. I’m going to tell you about my own system below, but the key to all of this is to keep tweaking your calendar until you get it to the best possible useful state.

First of all, the whole system is based on Google Calendar. I’ve tried many other calendaring systems, and no other system hits all of my needs quite like Google Calendar. It’s easily available online from pretty much any browser (like the one on my phone). It syncs with a bunch of different programs. It’s easy to enter new things, particularly repeating things. I can set email reminders in advance of particular appointments.

Perhaps the biggest factor that has convinced me to move to Google Calendar is the ability to have separate calendars that can be displayed individually or simultaneously.

For example, I have a distinct calendar entitled “Birthdays and Anniversaries” which, obviously, contains all of the birthdays and anniversaries I need to remember. I don’t always want to see this calendar – it often adds unnecessary clutter when I’m trying to view the upcoming week. On a normal wall calendar or planner, it would be impossible to deal with that aside from just listing the birthdays and anniversaries in another document. With Google Calendar, it’s gone in a click – and it comes back in a click.

Repeat that for every major grouping of events in my life – professional responsibilities, social events, family events, and so on – and you begin to see how viewing one calendar at a time or particular groups of calendars at a time can be really useful.

My actual list of calendars looks like this:
Bills and Finances
Birthdays and Anniversaries
Council Meetings
Community Events
Family Events
Home and Auto Maintenance
Miscellaneous
Other Professional
Personal Goals
Simple Dollar
Speaking Engagements

Virtually everything that comes into my life fits into one of these calendars, usually in a very obvious way.

The nice thing is that even if I overstuff one of these calendars, I can logically split it into two or three calendars so that each one isn’t completely overloaded. For example, I used to have “Council Meetings” (for the various community boards and councils I serve on) in the same calendar as “Community Events,” but I found it was much easier to keep track of things by having them be separate.

Another thing to note is the “Home and Auto Maintenance” calendar. I use this to keep track of all of the routine maintenance that needs to be done around our home, from changing furnace and water filters to flushing the water heater. I usually do several such items on the weekend, so I just open that calendar and look at what’s on it within two weeks of that day and it forms my “to-do” list. When I finish those items, I just delete that entry from the calendar and since I entered them as recurring events, I know that the next time I need to perform that maintenance, it’s already marked for me.

Altogether, this calendar system has made my busy life far more manageable. I’m no longer struggling to keep up with or interpret an overstuffed calendar, nor am I spending time repeating events over and over.

Now, someday, I dream that those touchscreen flat panel PCs get inexpensive enough that I can simply use one of them as a wall-mounted full screen Google Calendar portal, using that as our new wall calendar. Everything old is new again.

Get your own calendar in shape. Your time, your career, your wallet, and your family will thank you.

Throughout the month of December, The Simple Dollar is posting a daily series focusing on specific activities you can do right now to set the stage for a great 2011. Out with the old, in with the new.

11. Make your home more energy efficient.

Almost everyone who has a roof over their head has an energy bill that they have to face. Electricity. Heating oil. Natural gas. It’s a personal finance reality for all of us.

Thankfully, we all have ways in which we can easily reduce those energy bills without installing a windmill or using a bicycle-powered generator. Here are eight easy tactics you can do today to reduce your home’s energy use.

(Yes, I know long-time readers have seen many of these before. I’m mentioning them again because (a) they flat-out work and (b) I see tons and tons of homes where people haven’t done these things yet.)

Use more daylighting. Rather than walking into a room and immediately turning on the lights, consider just opening up the blinds or the curtains. Quite often, daylight provides all the lighting you need in a room without wasting energy (particularly if you then walk out of a room and leave the lights on).

Install a programmable thermostat. Why do this? A programmable thermostat can be set to automatically adjust the temperature in your home without you ever needing to remember it. In the winter, the temperature at night can drop. During the summer, the temperature can rise when you’re at work. Steps like these keep your furnace or air conditioning unit from running constantly, saving on your energy bill.

Alter your typical home temperature. Hand in hand with a programmable thermostat is a little bit of adjustment of the typical temperature in your home. Lowering the temperature even a degree can make for significant energy savings over the cold winter months. Similarly, raising the temperature even a single degree can help quite a lot during the hot summer. We tend to adjust our home temperature right up to the edge of being uncomfortable.

Utilize space heating. Another great tactic in the winter months is to simply use a space heater in whatever room you’re in. This allows you to keep the temperature of your home much lower than you otherwise would keep it, which results in significant energy savings over the long haul.

Air seal your home. In both cold and warm seasons, uncontrolled air flow in and out of your home is an expense you don’t need in your life. Spend the time to do a full energy audit and air sealing of your home and you’ll save in every season for as long as you live in your home.

Turn down your hot water heater. We keep ours adjusted so that our showers, on their hottest setting, is right where I like it. My wife likes it just a little bit lower than that. Why have it hotter? If we have a need for hotter water, we can easily boil some tap water for that use. Turning down the water heater is just pure energy savings, and it’s as easy as can be – there’s usually just a little dial to turn on the front of the unit.

Adjust your ceiling fans. A small seasonal adjustment to your ceiling fan can make a tremendous difference when it comes to your energy bill. Having the air blowing the right way for the season directly impacts the speed with which you need to run the fan as well as the necessary heat level in the room.

Dress appropriately. Don’t strip down when you’re at home in the winter and don’t overdress in the summer. If you’re warmly-dressed in the winter (sweatpants and a long-sleeved tee shirt or sweatshirt) or coolly dressed in the summer (tee shirt and shorts), you can allow your home temperature even more variation when it’s just you at home (and you can obviously adjust it a bit when you have guests).

Simply put, much of your energy bill is in your hands. Making better decisions regarding that energy can save you tremendously each month on your energy bill.

Throughout the month of December, The Simple Dollar is posting a daily series focusing on specific activities you can do right now to set the stage for a great 2011. Out with the old, in with the new.

10. Do a mind sweep.

Hot on the heels of the ongoing discussion of Making It All Work, I’m going to suggest a good old fashioned “mind sweep” as a brilliant way to get your financial and personal house in order to finish out the year.

What’s a “Mind Sweep”?
Simply put, a “mind sweep” is a collection in one external place of all of the ongoing concerns in your life. All of the things you’re thinking about, trying to remember, or need to do that are cluttering up your mind are a bigger distraction than you think, and simply getting them out of your head can make a big difference.

Why is it such a big distraction?

For starters, think about how your mind works when you’re focused on a task. How often does a stray thought pop into your head? Something you need to do. An appointment you need to remember. Some fact that you’ve been thinking about lately. These little thoughts break your concentration, and that causes both the task at hand to take longer and the task at hand to get finished with a little less quality. Has your mind ever wandered to something else and suddenly you’re seeing the task in front of you descending into disaster (dinner, for instance)?

More importantly, doing this makes you into a more reliable person. You’re able to deal with the many personal and professional things people expect from you and you live up to that standard – and beyond. You produce quality work and don’t let people down.

One of my own examples of a “forgotten” thing, for example, tends to be bills, mostly because many of them are billed electronically and some of them don’t let me know that they’re due. Thus, it’s up to me to remember them.

Doing a Mind Sweep
So, how do you actually go about this?

I suggest having a good chunk of time set aside before even starting. This is a perfect activity for a winter weekend day where you don’t have much going on.

I would also suggest having some sort of tool upon which you can freely write. This might be a laptop or it might be a pad of paper and a pencil.

The first step is to simply sit down and do a complete brain dump. Just sit there and let your mind wander through everything in your life and write down everything that concerns you, that you’re trying to remember, that you’re working through. All of that stuff that pops up and distracts you needs to go down on paper (or into your text editor). Just keep going with it until you feel like there’s nothing else.

When you’re done with that (it usually takes me about an hour), go through your house and visit each room. See if anything else pops into your head as you look around. Check your email. Think about your job and the stuff you need to get done there. Go through your mail.

Get it all out of your head and onto paper. Don’t worry about order. Don’t worry about filtering anything. Don’t worry about duplicating stuff. Just get it all out.

Following Through
You’ll find that the list is tremendously long when you’re done. The next step, of course, is to start dealing with all of that stuff.

Go through every item on the list and ask yourself if you can do something that takes care of the problem in the next five minutes. You’ll be shocked how many of the things actually will disappear in this way.

If you can’t deal with it that quickly, figure out what needs to be done with it. You’re likely going to be placing stuff into several separate places. Here are the key ones I use.

Trash If I look at something and, after thinking about it clearly, realize it’s not really important (like old magazines, etc.), I trash it, no questions asked. If I’m never going to look at it again, why keep it?

Calendar If I have an appointment that needs to be kept on some certain date, I add it to my calendar and forget about it.

To-do list If it’s something bigger that needs to get done, I think about it for a bit, then try to transform it into something very clear that I can do without thinking too much about it. That item goes on my to-do list.

Projects If it’s something so big I won’t be able to get it done in one shot, I add it to my “projects” list. When I’m done dealing with all of this stuff and have it in the right places, I go through all of my projects and ask myself what the first concrete thing I can do to move this forward is, and I add that single thing to my to-do list.

Reference If it’s something I’ll need to have at some future date, I file it in my filing cabinet. Don’t worry if you don’t have a filing system – just start a central place for storing such documents.

When I’m done with all of this – and it all takes a good day and a half – I have a healthy to-do list, a project list, and, most importantly, a clear mind.

At this point, I find that when I sit down to work on something, I’m not nearly as distracted by stray thoughts as I once was. This enables me to get things done substantially faster than before because my concentration isn’t broken nearly as often. Thus, I can get through my to-do list substantially faster than before and make up that time “lost” on the brain dump very quickly. After that… it’s all a time profit.

Spend this weekend doing your own mind sweep. You’ll find it helps you in many ways, often unexpected ones.

Throughout the month of December, The Simple Dollar is posting a daily series focusing on specific activities you can do right now to set the stage for a great 2011. Out with the old, in with the new.

9. Bank some meals.

A lot of times, after a long day of working and child care, I really don’t feel like I have the energy to cook a great meal from scratch. The temptation to just go out and eat is pretty strong, as is the temptation to make a quick and likely unhealthy and not all that delicious meal. Not only is neither of these choices all that healthy, they’re both relatively expensive.

The best bang for your buck at meal time comes from preparing your own meals from scratch, of course. You have complete control over the ingredients, you can use items that are on sale at the store, and you’re not paying someone else (or some food manufacturing company) to do the work for you with substandard ingredients.

It takes time, though, and that runs into conflict with the typical busy weeknight.

My solution – and one that’s saved my family a ton of money over the years – is to simply bank some meals on weekends. Some people refer to this as “once a month” cooking, in which they make four duplications of eight dinners and eight lunches and stock the freezer with them. I typically don’t do anything that organized, but we often make several meals on the weekend and freeze them with the intent of using them during the week.

Another financial advantage of this is that I can buy ingredients in bulk, reducing the cost per meal preparation.

The Game Plan
For my “banked” meals, I usually stick with stuff that has minimal requirements when I pull it out of the freezer. Ideally, it just has a sticker or a note on it that says how long to bake it in the oven and/or how long to microwave it.

Because of this requirement, meals like lasagna, casseroles, burritos, enchiladas, and so forth work quite well. You can make them once, wrap them, label them, store them in the freezer, and merely pull them out and put them practically straight into the oven. (Often, I’ll pull out the meal the night before, let it thaw in the fridge, then cook it that evening.)

The process is pretty straightforward.

On Friday evening, I’ll check out the current grocery flyers for big discounts. Things like tortillas and particular types of produce usually catch my eye. I try to look for ingredients that I’m confident that I can use in meals (or meal variations) that I know I like and that I know my family likes.

I plan some meals and make a grocery list. Let’s say I’ve decided to make several batches of lasagna and a big pile of three-bean burritos tomorrow. I dig out recipes (or devise my own), multiply out the ingredients, then make a shopping list that covers everything I’ll need.

I spend a large portion of Saturday cranking out a lot of meals. I’ll make a batch of 32 burritos and eight pans of lasagna, for example, that will be used in the next three months. I prepare the items to the point where all that has to be done to finish them is throw them in the oven. I also keep one of the items for my own family dinner – either a pan of lasagna or four burritos.

When I package the items for freezing, I put a tag on each one with directions. I usually just use large address labels. For large meals, I assume that the food is thawed and at refrigerator temperature but not frozen (usually adding 25% or so to the time listed in the recipe). For smaller items, I assume they’ll be frozen. The instructions mostly just tell me the temperature and the time that I need to use to finish cooking the food.

Then, when I know I’m going to have to use a “banked” meal, I just pull one out of the freezer the night before, in the case of the lasagna, or just pull them out of the freezer on the fly in the case of things like burritos.

There are two key reasons why I follow this plan.

It saves money. If I’m utilizing sales, I’m saving money on a key ingredient of these recipes. If I’m utilizing bulk buying, I’m saving money on a key ingredient of these recipes. If I’m preparing a meal at home out of my own ingredients instead of going out at a restaurant, I’m saving money. All of that saving really adds up.

It conserves time when I actually need it, and often saves a bit of time overall. Evening time is much more valuable to me than weekend time. In the evenings, I only have a few hours to spend with my family, so I want to do that with as little interference as possible. On the weekends, we can turn such meal-making into a family project or a rainy day project. Making meals in advance also saves you time overall because of the number of activities you can do simultaneously (like cooking lasagna noodles for eight lasagnas at once instead of in eight separate batches).

Spend a day this weekend making some batch meals. You’ll be surprised how much convenience it adds to your week nights and you’ll also be pleasantly surprised when you see your checking account balance at the end of the month.

Throughout the month of December, The Simple Dollar is posting a daily series focusing on specific activities you can do right now to set the stage for a great 2011. Out with the old, in with the new.

8. Rethink your retirement plan.

If I’ve done one thing right with my personal finances since reaching adulthood, it’s been taking care of my retirement. I’ve consistently put a significant amount away for that future day when I no longer work and I’m ahead of the retirement curve for my age in almost every way you could measure it.

Having said that, of course, I’m in the huge minority there. Many people my age have scarcely thought about retirement. I regularly get emails from readers in their forties and even in their fifties that are just now beginning to think about retirement savings.

That’s a bad idea. Regardless of your age, the sooner you get started with retirement savings, the better. The more years you give yourself to save before retirement, the less you have to take out of each paycheck for retirement.

Getting a grip on your retirement plan really boils down to answering three questions.

Where are you at right now?
The first step is to understand what retirement savings you have built up right now and, to a lesser extent, what types of investments that money is held in.

Make a list of all of your financial accounts and their balances. This will, of course, require you to dig out all of those statements and log into your online accounts to retrieve this information (unless you’re using something like Quicken).

The purpose here is simply to get a grasp of the totality of your retirement savings. You need to know what you have before you can plan intelligently for the future.

Where do you need to be?
Once you have this information in front of you, you can use a retirement planning tool like this one at MSN to get an estimate of what you will actually need at retirement.

Personally, I find such software to be fairly good at giving you a starting point for your calculations, but almost every time, they tend to underestimate what you’ll actually need to do to get there.

Why? They tend to assume a very mundane rate of inflation while also assuming a more-than-healthy return on a diversified investment portfolio. If you know of a retirement portfolio that’s guaranteed to return even 7% over the next 30 years, I’d love to see it.

So why do I encourage people to use such software? First of all, you don’t have to use the default numbers they give you. Most people plug and chug with the default numbers at MSN, which suggests a 9% return on investment. Turn that down to at least 5%, if not lower.

Remember, it’s not a bad thing to save too much for retirement, but it is a very bad thing to not save enough for retirement. You can always retire a bit earlier or live a very robust retirement, but you don’t want to find yourself at age seventy or so without any ability to retire.

How do you get there?
So, how do you get from here to there? The retirement planning tool will give you a suggested amount for annual savings, and you should use that as a bare minimum.

Where do you save that amount, though? You’ll hear a lot of people tossing around suggestions of Roth IRAs and 401(k)s, but here’s the real truth: 99% of the worry about retirement savings is just simply doing the saving, regardless of where you put it. Compared to the concern of not banking nearly enough for retirement, the issue of having a Roth IRA or a 401(k) pales in comparison.

My rule of thumb for most wage earners is if you’re eligible, open a Roth IRA with some brokerage (I use Vanguard, but do your own research). This lets you be completely in control of the account. Also, money in a Roth IRA can be withdrawn at retirement age without any taxation at all, which is a nice perk, but the drawback is that you’ll be funding it with after-tax dollars – meaning the money comes directly from your paycheck. I usually recommend a Roth because I believe taxes will inevitably have to go up from where they’re at right now.

If you don’t know what to invest in among all of your choices, choose a “target retirement” fund that matches when you expect to retire. These investments will automatically balance your money for you, ensuring that you won’t be completely exposed to stocks close to retirement age (so that a big downturn like 2008 won’t sink you), but also gives you a great chance for growth now, when you’re young.

Regardless, the important thing is that you’re saving an appropriate amount. That’s the real key here. Today is the day to get started, if you haven’t already.