Money is often a taboo topic among friends because of the fear that revealing too much can lead to envy and resentment. Yet, those who can harness the power of openness on their financial journey often reap the most rewards. By having a retirement planning buddy you can share your financial goals with, you will be able to improve your progress toward financial independence. Here are a few reasons why:
Share ideas. New tools and insights are constantly being discovered and developed, yet there are only so many hours you will be spending every day on the subject. With a buddy, there are more chances to stumble upon new ideas that may end up giving you a huge leg up on your progress toward a comfortable retirement. Concentrate your attention on new strategies that make an initial cut for both of you and then split up the work required to test the new tools.
Offer a second opinion. Some financial innovations will be beneficial to you, while other ideas may turn out to be outright scams. If we always act alone, we may let hoopla cloud our judgment and lure us into something that's just too good to be true. By always talking to someone else about different strategies and opportunities that arise, an objective opinion could save you from a catastrophe.
The pair of you will motivate each other. Encouragement always helps in any situation, especially for long-term goals such as saving for retirement. Sometimes it could simply be a well-timed motivational quote, while other times you may need an outright kick in the pants to remember that preparing for the future is every bit as important as the present.
A little friendly competition once in a while wouldn't hurt either. You may want to challenge your friend to see who can save the most in the next 30 days, or you can hold a competition to see who can find the lowest priced lender for a refinance. The great part about these competitions is that everybody comes out a winner.
Hold yourself accountable. There may be times when you want to give up the effort needed to achieve your goal, and there will definitely be times when you want to spend more than you should. Just the fact that someone else knows about your plans and goals will give you the healthy pressure needed to keep your focus on the grand prize.
Celebrate milestones together. Saving for retirement is a decades-long goal, so it helps to celebrate your progress along the way. Perhaps a nice dinner or a trip somewhere you've never been to before when you hit certain milestones will make the saving process easier. With someone else to celebrate your success with, everything will be much more rewarding. After all, don't you want to have someone to tell once you have saved enough to retire?
David Ning runs MoneyNing, a personal finance site that shares money moves you can make to significantly increase your chances of having a comfortable retirement. He likes to share simple changes that anyone can make, such as picking the best online savings account and figuring out whether a 0 percent balance transfer credit card makes sense.