Jean Chatzky believes that anyone, no matter what they earn, can live a happy, comfortable life by following a few simple money rules. Yet there is one rule she says tops them all: “If you can’t see it and you can’t touch it, you won’t spend it. This is why 401(k)s work, but it’s also why you have to put 401(k) systems around every single goal that you’re trying to save for.”
Chatzky, the financial editor of NBC’s Today Show and AARP’s personal finance ambassador, has been helping people achieve financial freedom for decades through her bestselling books and podcasts. In 2018 she co-founded HerMoney, a digital media company focused on personal finance specifically for women.
“Hope is not an an investment strategy. You can’t just sit there and hope that one day it’ll all be OK, because unless you’re planning for it and actually doing things to get yourself there, you won’t, ” she says.
Chatzky says that even if you start off with a few minor money problems, there are simple maneuvers that can get you quickly back on track and that once these are under control, “the big picture falls quickly into place.”
In fact, Chatzky admits she made her own money mistakes along the way.
“When I left my first job, I actually pulled the money out of the 401(k) and spent it. I didn’t really understand what a 401(k) was at the time. I signed a piece of paper, I got a check in the mail and went shopping.”
But while she didn’t understand the dynamics of a retirement fund and the magic of compound interest as a young adult, her parents did teach her that saving could definitely produce “magic” in other ways.
“I didn’t know how much my parents made; I didn’t know how they were invested. But I do remember before that family trip to Disney World breaking open the family piggy bank and counting the half-dollar coins that my family had been saving in there for years and knowing those were our gate tickets.”
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
Note: This story originally ran on CNBC and is reposted with permission.