I’m on a business trip right now with about 50 of my colleagues. Since I typically work out in the field (by myself for the most part), I don’t really know these people. I mean, I talk with them on the phone every once in a while, I see them at occasional meetings, but for the most part I don’t know them. Many, not even their names.

I do, however, have one coworker I’m really close with. We worked together in San Diego, found out we both were involved in Young Life, and he transferred to the Pacific Northwest two weeks after I did (albeit he transferred to Portland… which if you didn’t know is like the Junior Varsity version of Seattle). We’ve been spending most of our free time together, and since he knows I have this personal finance blog, a good chunk of our conversations are about money.

I discovered something very interesting last night. Even though my friend and I make the exact same salary – weird part about working for the fed is you know pretty much how much everyone makes – he happens to be part of the 1%.

No, not the 1% you’re thinking. 

I’ve always given him a hard time about saving for retirement. The government fully matches up to 5% of an employee’s gross salary in the Thrift Savings Plan (our version of a 401k). I learned last night, my buddy is only contributing 4% to his TSP.


I about ripped my hair out when he said it. I stopped him and was like “What the heck man? Four percent? What is keeping you from upping your contributions one more percent and getting the FULL match?”

He didn’t know what to say. While he was thinking, I started punching numbers in to my calculator watch (yes I really do wear a calculator watch). I interrupted his thought process and told him that increasing his contributions from 4% to 5% would cost him roughly $25 per period.

Now if my friend was scraping by, adding the 1% to receive a full match could be difficult. He’s not, and he knows it. He actually started laughing when he thought about just how silly NOT receiving the full TSP match is. He has LITERALLY been passing up free money for the last four years.

Needless to say, I got him to pinky promise me he would up his contributions to 5% when he got home. What’s that popular saying? Every time someone contributes to their 401k an angel gets their wings?  Yeah…. that sounds right.

I rarely tell people what they should do. If you like car loans, get a car loan. If you want to buy a house that stretches your budget thin because it’s “an investment”, be my guest. I wont stop you.

But hear this: If you aren’t taking advantage of a 401k type match at your work place, you are probably failing at personal finance (this is obviously directed to people whose company offers such a benefit, which I realize your company may not). You literally can not beat a 100% guaranteed return on your investment.

No. Seriously. You can’t.

You think you should pay off your student loan or credit card bills before taking advantage of your companies match, don’t you? You need to think again (seriously click that link… I explain why investing in a 401K is a higher priority over paying down HIGH interest debt). 

Fortunately, last night I was able to nudge my friend in the right direction. But it makes me wonder, how many of you ARE NOT taking full advantage of a company offered match (be honest, no judging here)? What’s keeping you from doing it? Can someone tell me why the majority of people DON’T take part in such programs?

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