How Younger Generations can Find Extra Cash to Save towards Retirement
When questioned about why they have not started saving towards their retirement years, many of the younger generation state that there is not enough money left over after paying off student loans and covering living expenses. However, many individuals discover that they are able to find additional cash to save for retirement when they are willing to put in a little extra effort. The advice below can help get you started towards achieving your financial goals for retirement.
Carefully Inspect Bank Statements
Some of the biggest ways in which individuals lose money each month are repeated small purchases and non-cancelled subscriptions. Start by printing out a bank statement that covers your expenses for the past two to three months because this will allow you to see if there are expenses that can be reduced or even eliminated. For instance, consider making fewer trips to your local coffee shop and ensure that any unused subscriptions or membership fees are cancelled as soon as possible.
Any money saved by taking these actions can then be put towards your retirement fund.
Consider Taking on a Second Job
If you currently work regular hours and cannot seem to find extra money to put towards retirement, taking on a second job (even temporarily) may be an option. Options such as driving for Uber or Lyft, or even delivering pizzas and other fast food in your spare time can help bring in a fair amount of additional cash. Although it may seem like you aren’t earning a lot from a part-time position, every dollar helps when it comes to investing towards your golden years.
Avoid Taking on Unnecessary Debt
Although it’s sometimes necessary to take on debt – such as when you purchase a car or home – unnecessary debt can be classified as store credit cards and any other type of expenditure that isn’t absolutely necessary.
If you do currently carry balances on store cards, credit cards and anywhere else for items such as clothing, gadgets and other non-essential items, consider paying these off as quickly as possible. Once this has been done, you can take the amount you were paying towards these and apply them to your new retirement savings plan instead.
Save those Raises and Bonuses
When receiving a raise or bonus at work, it can be tempting to let these funds simply be absorbed into your regular spending. However, even saving a portion of these instead of spending everything can make the difference between retiring and retiring comfortably. If you still have debt, funds from your raises and bonuses can be applied towards it so that it can be repaid quicker. After your debt has been repaid, you can channel these amounts to your 401(k), IRA or other investment funds you may have.
If you’re unsure of where you can make changes in your existing budget and spending habits, why not contact one of our team members today? They will be most willing to assist you so that you can achieve your goal of being able to retire comfortably.
Take advantage of your employer’s 401(k) and company match.
Here’s the simple breakdown of where your investing should start. First, look into your employer’s 401(k). If you have this and you’re able to, max out the amount of contributions you can put into this fund, which is $18,500 a year of your own money.
That $18,500 doesn’t include your company match. If your employer offers this, then use it with a grateful heart. A company match of any percentage is a great employee benefit to get you even closer to your retirement goals. Remember though, that match isn’t part of the 15% you’re investing. It’s just a lovely little bonus.
After you hit the $18,500 mark, you’ll call in reinforcements such as the Roth IRA, which allows up to $5,500 a year. If you need help working through all this, or you’re ready to invest beyond those two levels, you should talk to an investing pro.
Rein in your spending.
It’s time to get real. With yourself. Review your money habits to see where you can rein in your spending. That gum-buying routine, drive-thru coffee habit, or comical T-shirt obsession could be costing you some serious money that would be way better used toward investing in retirement.
Be honest with yourself about places you overspend or budget lines that could be easily lowered. Here’s one simple solution as an example: Meal planning can save you around $200 a month. That would give an awesome jolt to your retirement savings right there—without a huge sacrifice other than some time being intentional with your grocery planning and shopping.