The following is a post from staff writer Crystal at Budgeting in the Fun Stuff, where she writes about finding the balance between paying your bills, saving for your future, and budgeting for the fun stuff along the way.
We all know that if you want to retire, you’ll need something to live on in the bank. This article, 9 Ways to Save More Money for Retirement, listed their methods to boost retirement savings. Here is my take on their 9 steps:
1. Set a limit on your spending.
If you can’t control your spending, you will not know how much you will need for retirement. My husband and I record every single expense monthly and have a target amount for each category. If you know what you will need, you will be able to plan accordingly.
2. Pay yourself first.
This is the absolute best way to save. If you can’t see the money, it is harder to spend the money. That is why the IRS takes their piece before you even get your check. I’d suggest setting up automatic contributions.
3. Consolidate your accounts when appropriate.
Look into the benefits of account consolidation. If you are paying more fees in one place than another, you may want to consolidate those funds to take advantage of the lower fees. Some institutions actually will give bonuses for being able to hold onto more of your money. Always look at your options.
4. Make more money.
By either working hard for promotions or by starting a side job, you can increase your income. You can save that extra income for retirement. I personally love blogging since it’s fun and brings in more than $500 for me every month!
5. Eliminate a few little expenses.
Any habit that costs money will add up. Whether we are talking about lattes, cigarettes, daily donuts, or whatever, a daily expense adds up to big money overall. Accepting small fees from banks can add up too. This step seems to be all about keeping the small stuff in mind.
6. Consolidate your debt.
If you have high-interest debt, look into consolidating it into a lower fee account. A balance transfer from high-interest credit card to a 0% interest credit card is just one example of lightening the interest load on debt.
7. Be wary of depreciation.
Remember not to confuse a depreciating asset with an investment. Best of all, try to skip out on some depreciation on things like cars by buying used.
8. Take advantage of tax breaks.
A Roth IRA or a 401(k) account are great example of how to receive tax breaks in different ways. With a Roth IRA, you can make a ton of interest without being taxed on it. With a 401(k), you can decrease your taxable income right now. I like to balance the benefits of the two by contributing to both.
9. Look for low-cost alternatives.
This can apply to almost anything. Always be on the lookout on a way to decrease or eliminate costly habits or activities by replacing them with cheaper alternatives that you actually like better.
What other steps can you think of to save more for retirement?