Can Lower Income Earners Still Save?
If you’re currently working and not earning a large paycheck, retirement will possibly be one of the last things you’re thinking about at the moment. After all, it’s challenging enough just covering your daily expenses – so how on earth are you still supposed to start saving for retirement?
Believe it or not, there are a few things you can do that will help you start saving for this time of your life – despite being a low-income earner:
Saving Money should be Sacrificial
Several financial experts agree that saving money is a process that should feel as though you’re making a sacrifice of sorts. If this is not the case, they claim that you simply aren’t saving enough. Your main goal should be to save enough money that it forces you to alter your spending patterns.
Instead of going out for pizza or ordering in over the weekend, set the funds aside that you would have used for this and try making your own pizzas at home instead. In most cases, it’s the small things you do that will make the most difference in the amount of money you can save over time.
Most Individuals Spend more than they Realize
Now is the time to start making notes of every penny you spend. Did you purchase a soda at lunchtime? Coffee on the way into work? Takeout on the way home after your shift?
Make a note of every purchase and keep record over the next 30 days, and then go back through your list and mark each frivolous purchase. Afterwards, add up the highlighted purchases – this amount could very well have been put into a 401(k) or IRA instead of being frittered away.
Although doing this will cause you to forfeit a few of those ‘nice little extras,’ remember that these funds could be earning you interest over the next few years.
Look for Ways to Earn More Money
These days, there are more ways than ever to pick up a little extra income on the side. Wherever possible, see if extra shifts are available at your current place of employment. If not, consider caring for your neighbor’s children when they go out for the evening, offer to run errands for a small fee or even check with friends and family about walking their dogs to try earn that little bit extra.
If you’re crafty, consider making items to sell at a local market – or even offer music lessons if you’re good at playing a specific instrument. These might not sound like ways to make a lot of extra cash at a time, but every bit will help. Save everything over and above your regular income, and you might find that planning for retirement isn’t as impossible as you think.
Although earning low wages can make it challenging to compile a retirement plan, it’s not impossible to do so. Tracking your spending, cutting expenses wherever possible and finding ways to bring in that little bit of extra money will go a long way in helping to plan ahead for your golden years.