Dreaming of retirement, but don’t feel like you are saving enough? Sadly, this is the reality most of us are facing.
Today it seems like most of us are living paycheck to paycheck and retirement savings are usually the first thing to take a hit.
To make matters worse, a lot of people don’t know how much money they need to save each year to retire comfortably. If you don’t know how much money you need to retire, make an appointment with a financial advisor because they can point you in the right direction and even help you get started saving for retirement.
So how are you going to save some extra money for retirement? Here are a few of my favorite tips for anyone looking to save extra money.
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How to save extra money for retirement
Start by evaluating your budget
Your budget should be evaluated to make sure that you are saving the most amount of money. You’ll want to cut out any wasteful spending and save where you can. I’ve created a free course to help families budget and save more money.
Take Advantage of Company Matching
If your company offers retirement matching, benefit from it immediately! If you don’t, then you are throwing away free money!
One of the biggest downfalls young people make is not jumping on the opportunity of company matching, thinking they have plenty of time to get started. Eventually, they jump on the company match after a few years and start kicking themselves over all the free money they lost!
For example, if you make $45,000 a year and your company matches up to 3% of your annual salary then that’s $1,350 of free money. Over the course of 10 years, that is $13,500 without mentioning any interest earned or pay increases.
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Couples: Live on One Paycheck and Invest the Rest
If you are married and can comfortably live on one person’s income, then one of the best moves you can do is budget your living expenses for one person’s income and invest the other spouse’s income.
People tend to adjust their lifestyle depending on how much money they make, which is a dangerous habit for setting aside money for retirement. So why not try to change your lifestyle to one person’s income and save for your future with the other income?
Obviously, a family of two engineers or scientists making $70,000 a year each would have an easier time with this strategy than a family making $35,000 each. So try and find out what works best for you. You might end up living off your salary and half of your spouse’s salary while saving the other half for retirement.
Get a Side Income
When it comes to saving money for anything, including retirement, it is all about your cash flow or how much money is coming into your bank account versus how much of it is leaving. One of the best ways to earn extra money is to find a side income.
I know you are probably tired from your regular everyday job, but it’s time to consider if working on the side is right for you to meet your retirement goals. Any extra money you earn from your side income is a huge victory for your retirement fund.
There are many options for getting a side income, and it’s all about finding out what works best for you. A lot of people gravitate toward bartending or pizza delivery because of the extra money involved with tips. Some people are venturous enough to start their own business.
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I know it’s the dreaded overtime word. Overtime is extremely helpful if you have a job that pays you well for it.
I don’t recommend working overtime for very long. It does get boring being trapped at the same job after all. At the very least, try to increase your overtime by a few hours every week.Sharing is Caring!Click To Tweet
Invest the Yearly Extras (Pay Raises, Bonuses, Tax Refunds)
Think back to the last time you got a pay raise, bonus or tax refund. What did you do with that extra money? Did you blow it or do something responsible with it?
Most people take extra money such as their tax refund and buy themselves a nice new flat screen TV or another luxurious item without improving their situation. One of the best things you can do with that money is throwing it into your retirement fund before you get the desire to spend it.
I know it’s tempting to buy things. After all, advertising is all around and aimed at getting the hottest new things burned into the “buy now” button of your brain. Don’t let these products get in the way of your retirement.
Cut Unnecessary Expenses
Remember cash flow? It’s all about the cash flowing into your bank versus the money flowing out of your bank. In this case, we want cash flow into your retirement fund! We as humans have a tendency to flow an absurd amount of money out of our banks on things we didn’t need in the first place.
Think about your regular spending and think about what you could cut out. Do you buy an expensive coffee every morning on your way to work when you could make coffee at home? Remember that $4 coffee bought five days a week costs you $80 a month that could go towards retirement!
Write a list of things you waste your money on that you could cut out and do it. Don’t spend the money on anything else, but your retirement! Remember it doesn’t do you any good to save $80 a month on coffee and then think you have an extra $80 for eating out.
Remember, if you haven’t started saving for your retirement or don’t know how to start, talk to a financial advisor today. Setting up a meeting with a local financial advisor is typically free, and you will probably learn quite a bit about what it will take for you to retire.
Don’t forget to check out our free course on budgeting and saving money. The course will help you get your finances in order so that you can save more for retirement.
What are some of your favorite ways to save money for retirement? Let me know in the comments below!