More than half of all American adults have less than $25,000 saved for retirement, and over a quarter have less than $1,000. We're always focused on our immediate financial problems - mortgage payments, credit card debt, student loans, and so on - but that doesn't mean we can afford to lose sight of our long-term planning.
If you're one of the many out there struggling to see the finish line, here are five tips that can help solve the problem:
1. Clip Coupons to Save on Groceries
Clipping coupons isn't just for old folks anymore. Pick up two copies of the Sunday paper every week and you can double your savings (and make sure you get coupons on both sides of the page). Categorize your coupons by expiration date so you don't miss out on any savings. Then, find out when your preferred grocer doubles the value of coupons and shop on that day. The average grocery bill is almost $800 per month, so any money you can save can go a long way in your retirement planning.
2. Reduce Your Personal Purchases
Before you reach for your wallet or purse to make that purchase, ask yourself: "Do I really need this?" Most of the time the answer is going to be "no." Rent, utilities, food and transportation are essential expenditures. Anything else should be seriously evaluated. If you can hold off getting that new smartphone or splurging for that fancy dinner out, you can put your hard-earned cash directly toward your savings.
3. Put Yourself on a Budget
It's hard to get a handle on spending if you don't have a clear picture of your finances. Sit down with a spreadsheet, or even just a pen and paper, and make a detailed budget. Create columns for weekly, monthly, and annual expenses, and detail every item or service you spend money on, down to bubble gum. Identify expenses you can easily cut back on, such as cell phone and cable TV, and investigate cheaper alternatives - trust me, they're out there.
4. Save on Gasoline
Gas prices are on the rise and if you're not able to carpool to work or use public transportation more often, you're going to see a significant hit to your bank account. To find the cheapest gas in your area, try a website like GasBuddy. You enter your zip code and instantly find the lowest-priced gas within a certain radius. Even if you only save a few cents per gallon, you're making a long-term impact on your personal finances.
5. Bundle Your Monthly Services
You can often get a lower rate from your provider by choosing a bundled package deal for your cable, Internet, and phone service. Before signing that contract, though, check out the competition. Compare all features and benefits and, if possible, avoid signing a long-term contract when you come to a decision. And ask yourself what you really need. With instant streamers like Roku and Apple TV, you can now access much of the content available on traditional cable (and a lot more), so slash that expense off your list and try going without it.
Once you get your spending in order, research the right retirement investment strategy for you. If your company offers matching 401k contributions - and you're now in a position to devote a potion of your income to it - elect that option. Explore Roth IRAs, and long-term, low-risk mutual funds. No one's going to give you the gift of a long retirement. You've worked hard; now plan well, and you can enjoy your golden years with plenty of cash to fall back on.
What ways can you think of to save more for retirement?
David Bakke is a financial writer for the resource, Money Crashers Personal Finance. He covers a variety of topics ranging from smart shopping and budgeting to investing and planning for retirement.
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