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Asset Allocation

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To 30 Something Married Couples...

How to Stop Your 401K From Being Eaten By The "Hannibal Factor"

As I sat and watched "The Silence of the Lambs", my skin crawled. Hannibal Lector toyed with Clarice Starling like a doll. Despite a strong FBI presence, his cannibalizing nature controlled the entire movie. They did everything they could to figure him out. Although it seemed like he was helping Clarice, in truth he was manipulating her and the FBI.

Married couples understand the importance of making, saving and growing their money. This is especially true if you have kids. No doubt you want enough money for their college fund and your retirement. You may have all the tools necessary to save and grow your money. These include automatic savings, CD's, etc.

But lurking deep inside each married couple is a "Hannibal Factor." Although we know we need to save for retirement other things eat away at our wealth. And this dangerous factor seems to side step our money saving tools. Like Hannibal Lector, this pervasive attitude controls our money behavior. On the surface we save, but inside we keep telling ourselves its okay to spend more money. And over time our savings goes up and down.

I accidentally discovered three secret ingredients that make up the Hannibal Factor.

The Seeds of Financial Destruction

Secret Ingredient #1: Overspending

How many times have you told yourselves that you deserve to buy something? It could be a new couch, car or anniversary trip. Don't get me wrong folks. I'm not saying it's wrong to treat yourself. But here's something you need to know about overspending. It can spiral out of control faster than a plane with no fuel. More than 56% of Americans overspend. Why do you think credit card companies are filthy rich?

Secret Ingredient #2: Failure to Save More Money

Let's be honest. Most of us don't like to save more money. We sometimes view it as something we can't touch. Financial Planners suggest saving 10% or more of our income. But who jumps to do that? Drop $5,000 on a long awaited cruise? Now that we're up for! We fail to save more money for two main reasons. First, things come up. It can be unexpected medical expenses, new tires or just old fashioned grocery shopping. Second, the "Deserve Gene" runs high in married couples. Since we work hard to raise our kids, work 40+ hours a week and put up with life, we believe we're due some fun. That's fine as long as it doesn't get out of control. But all too often our savings drains like sand in an hour glass.

Secret Ingredient #3: Procrastination

Do you remember the "cage scene" in The Silence of the Lambs? The two cops fail to properly search Hannibal as they bring him dinner. He ends up getting out of his cuffs and nails them both. Their moment of procrastination cost them their lives. The same thing happens with our retirement savings. Procrastination kills any dreams of retirement we might have. When your kids are long gone, don't you deserve to spend quality time with each other without worrying about money?

If you're feeling guilty don't fret. There's some good news on how to weed the Hannibal Factor out of your retirement savings.

New Money Behaviors

First, start a "Mad Money Budget." Let's agree on one thing if nothing else. As a married couple you're going to spend money. My wife and I save on a regular basis. But we also spend. We know we're lying to ourselves if we say we won't. Within our regular budget we set up a Mad Money Budget. This allows us to spend a certain amount on what we want. Each month we use it for the movies, eating out and other fun stuff. It's our small reward for working our tails off.

As a married couple you're always sacrificing for others. And that's cool, because you signed up for it. But reward yourself as consistently as you save for the future. If you don't resentment sets in. It's another sub-ingredient of the Hannibal Factor. You resent saving and giving to others, but never reward yourself. You do this, because you don't believe you deserve it. With all the traffic, child rearing and bill paying you do, yes you deserve some Mad Money! This part of your budget keeps spending under control. Be careful with this one. Your Mad Money Budget should never outgrow your retirement savings.

Second, save 5-10% of each paycheck. My wife and I have our money automatically put in savings. One goes to a regular savings account and the other to an emergency one. Since it's done automatically we don't worry about it. The money is automatically being saved. But you must be careful of the "Deserve Gene." It will speak to you at any moment and help you deplete your savings. Remember that your Mad Mone is for fun spending. Remind yourself of this when that deserving voice speaks to you.

Third, set money goals. Now I won't lie to you hear. This has been hard for us as a married couple. Be careful of just making and saving money. What do you want to do with it? Yes, you want to build your 401K, but what about investments? Some couples set a goal of investing in vending machines and moving up from there. You may want to buy a small vacation home to rent out in the summer. Sit down together and set some realistic money goals. This will give you clear direction on where you want your retirement money to go.

Take the time to analyze your money behaviors. You'll get deeper insight into how the Hannibal Factor works. And you may discover other money attitudes you didn't know you had. Keep refining your money goals. Once you change your money behaviors, growing your 401K will literally set you up for retirement.

Clyde McDade is a Financial Copywriter in the state of Washington. He's the author of the upcoming e-book, "How to Grow More Money for Your Retirement and Child's College Fund." He can be reached at

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