Investing in the Future

Larry and Brenda Breland's savings plan funded their retirement andput their kids through college

THE BRELANDS’ ADVICE

Start early. The Brelands discussed and set their goals early on and continue to do so. A good way to boost your future retirement income is through your employer’s retirement plan, whether it’s a 401(k), 403(b), or some other defined benefit account. Ideally, you should contribute 10% to 15% of your annual salary, but it’s OK to start small, Larry advises. “Then gradually build up, adding more money as you go along.”

Diversify. The Brelands spread their savings and investments across a variety of vehicles, including stocks, bonds, and mutual funds. For retirement savings, also look to Roth 401(k) plans, Roth IRAs, and traditional IRAs. For college funds, consider state 529 college savings plans as well as prepaid state tuition plans designed to keep up with tuition costs. For information and tools to help you choose the right plan, visit CollegeSavings.org, SavingforCollege.com, CollegeBoard.com, and FinAid.org.

Adhere to a budget. A concern among many new investors is finding money to save and invest. Monitoring and curtailing your spending is one way. Preparing weekly, monthly, and yearly budgets is the norm for the Brelands; more importantly, they stick to them. Monitoring their household budget helped the Breland family meet their financial targets. Also, don’t try to keep up with the Joneses. “A lot of times people get into financial trouble by trying to live beyond their means,” says Brenda. The couple never spent more than they earned per pay period.

This article originally appeared in the October 2009 issue of Black Enterprise magazine.

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