The more specific you can get, the better

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Create a vision for your life

For you millennials out there—and I’m one myself—it’s hard to save for retirement when it seems so far away. But it’s important to start thinking about it now. With lifespans getting longer, we millennials have, potentially, longer working years—and more retirement years that need funding.

Here’s where to start: Figure out what your short-term and long-term goals are. What do you want to do in the next one to two years? What do you want to accomplish beyond that time? When you’re trying to figure out how to allocate resources, think about what you value. The more specific you can get, the better. Try to assign a dollar amount to your goals if possible.

For the shorter term, you might want to focus on travel, debt repayment, house savings, or buying a new car. In general though, it’s best to prioritize establishing an emergency fund, paying down high-interest debt, and—if your company savings plan offers a 401(k) match—contributing at least that percent to get the full match. In fact, I would recommend working toward multiple goals at once. Choose a couple of nearer-term financial goals, while concurrently putting some money toward retirement. It’s all possible with proper planning.

Most of the time people have many competing goals and financial obligations. Planning is not a clear science and there isn’t a one-size-fits-all approach. Your financial plan should be tailored to you.

Save early and often

It’s easier to save when it’s automatically done for you. To help yourself out, automate savings by setting up a direct deposit into a savings account. Consider an online bank, which will typically give you higher interest than a bricks-and-mortar bank account. There are also tools to help you maximize the interest on your cash accounts—if you’re only earning 0.01% on your cash, you’re actually losing money after inflation.

If your company offers it, enroll in a 401(k). You don’t have to be a CEO to become a millionaire. I’ve seen plenty of people get there by being disciplined and making savings a regular habit. Take advantage of company 401(k)s. If they offer a match, contribute at least that much because it’s free money. No 401(k) at your workplace? Consider opening an IRA.

Also, make sure you’re investing your retirement savings. You should be broadly diversified and taking on the appropriate level of risk. After a while, you’ll see the benefits of compounding: Your money will be working for you.

Save what your budget currently allows for, but your goal should be to work your way up to saving between 15% to 20% of your gross income for retirement. Mintis a great budgeting tool I often recommend to my clients as an easy way to track expenses. When you get a raise, put those extra earnings toward your retirement savings. This also helps prevent “lifestyle creep,” where what was once a luxury becomes an expectation.

Improve your future but don’t deprive your present

It’s hard not to feel FOMO when social media feeds are filled with images of friends traveling the world, going to music festivals, and enjoying “Sunday Funday” brunches. The media are rife with stories of millennials going into debt after spending excessive cash on “creating the perfect ‘gram” while ducking out on future goals.

A current big trend is taking midcareer sabbaticals to travel the world. According to a survey by Sun Trust Bank, travel is the No. 1 savings priority for Americans—not just millennials. A sabbatical may or may not be the right decision. As a financial adviser, that’s not my call. My role is to help clients evaluate their choices by engaging in open-ended conversations, revisiting established goals, and reprioritizing goals if necessary.

My role also includes showing how any break in earnings and savings will affect other goals. If the priority is still to travel, I advise clients to consider setting aside a travel fund that gives them a responsible way to do this. The same goes for other purchases. If it’s important enough, set up a special fund for it and automate the savings. These funding set-asides shouldn’t be eating into your retirement funding.

So how do you juggle all these future goals without needing to eat ramen noodles for dinner? Get creative. Like renting. There are great services, like Rent the Runway and Le Tote, that enable fashionistas to indulge relatively cheaply. If the outdoors is more your thing, why buy gear you’ll rarely use when you can rent from REI? Lastly, it always helps to evaluate the true impact of a major purchase on your happiness. Figuring all this out is tricky, but schmaltzy or not, many of the things that make us the happiest—like spending quality time with friends or family—are free.

Technology has made saving for retirement both more difficult and easier for millennials. With the click of a button, we can post a picture, buy (or rent) a new outfit, or book that vacation across the world. Why not use that power to bring yourself a little closer to financial security? It’s less daunting than it sounds: all it takes is a few clicks.

Julia Pham is a wealth adviser in Halbert Hargrove’s Long Beach office. She helps her clients create a road map to attain the goals that matter to them.

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