More than half of Americans have less than $10,000 set aside for retirement, according to the Employee Benefit Research Institute. Needless to say that’s not enough to have a decent life when you leave the workforce.
All of us should be saving more for our golden years, and here we share the 5 common-sense strategies to help you boost your retirement portfolio.
1. Put Yourself on a Budget
This is where it all starts. You will have to think through your habits and see where you can make cuts. Dining out and entertainment costs are the first on the list. Also, you can live with just a few pairs of shoes — no need to buy new ones every season. And the same goes for every expense you make during the year.
You should review all of your expenses (more on that in a minute) to determine where you can cut back. Don’t sweat too much over it cause you know all the savings will go to the right place, allowing you to have a better time in your golden years.
Also read: 5 Ways to Live Within Your Means
2. Review Your Monthly Bills
Next step is to review all of your monthly bills. Write down all of your regularly occurring expenses and go through that list item by item. Think it through — do you really need that product/service every month? What would happen if you stop paying for it? In most cases, you won’t notice the difference.
You’ll want to rethink all memberships and subscriptions, and even dump your cable TV to replace it with a more affordable service like Hulu and Sling TV. Also, you may consider calling or visiting your bank (or other credit card issuer) to ask for the rate reduction. Finally, you should see what can be done to save money on utility costs.
Also read: 5 Ways to Save on Your Monthly Expenses
3. Save Money on Groceries
The average American household spends as much as $1,200 per month on food, according to the Department of Agriculture. That’s a lot of money for many families, leaving a lot of room for improvement.
There are many things you could do, like using coupons whenever you can, creating a shopping lists and (the harder part) sticking to it. Additionally, you may opt for less costly store brands whenever you can (and whenever that makes sense), and buy stuff in bulk to get better deals.
Finally, you may consider one of those credit cards that rewards grocery purchases with some percentage back. Yes, it’s just 1 to 3 percent back, but every little helps in the long run.
Also read: Save Money on Groceries – 10 Things to Know
4. Generate Additional Income
Even with all the expense trimming, you may not have enough money at the end of the month. You can, perhaps, get a second job to put more money towards your retirement.
There are many job opportunities out there, most of which don’t require rocket scientists. We have a page with a number of side gigs you can try to earn something extra every month. With some luck, you may be able to turn some of them into a new (second) career. Or just to be able to put more money on the side.
Remember that earning an extra $40 per day could net you $800 per month, presuming that you work just 20 days.
Also read: These 20 Gigs Could Get You an Extra $500 per Month
5. Eliminate Credit Card Debt
We should actually say that you should eliminate all or most of you debt. It is one of the factors that prevents you from saving more for retirement.
The debt costs real money and sometimes it is useful, like when buying a home. In most other cases, however, you should try your best to avoid it.
Your goal should be to pay your credit card bill in full, every month. If that’s not an option, try paying as much as you to carry as little balance as possible from one month to the other.
And, again, the same goes to every other kind of debt. Avoid it, and if you already own something, the previous step of cutting the fat should help you save money to shrink your debt.
Remember that the less you owe, the more you can save for retirement.
Also read: 5-Step Process for Getting Out of Debt
Conclusion
Now that you know how to save, you should know where to put the extra money. First, if your employer is offering a 401(k) plan, you should put it in there. Alternatively — or additionally — you can open an IRA or a Roth IRA (if you qualify) to take advantage of beneficial tax treatment.
It’s all about the discipline here to follow through on your own plans, and keep adding money to your retirement accounts — so when the time comes you can enjoy your golden years. Good luck.