Everyone is looking for ways to stretch their dollars, especially when it comes to saving. And there’s no savings strategy too small – even a dollar here and a dollar there can really add up! Here are some tips to free up funds for retirement savings:
• When writing a check, round up your checkbook entry to the nearest dollar. For instance, if you write a check for $57.12, record it in your checkbook as $58. Not only does this help you prevent overdrafts, it also means you're accumulating a little extra in your account every time you write a check. At the end of the year, deposit that money into your retirement savings account.
• Saving all or part of your raise or bonus. Direct part of your raise or an unexpected bonus to retirement savings – you aren’t used to it, so chances are you won’t miss it from your check!
• Visualize what you’re saving for. Studies found that when asked to specifically imagine the benefits of saving more money, 25% more participants chose to increase their savings than those who didn’t. Put this concept to work in your own life – think about what your dream retirement home looks like or picture where you’d like to travel. Then, while you’re still in the moment, call your benefits department and increase your 401(k) contribution or contact your bank and sign up for a monthly transfer of funds out of checking and into your hands-off savings account.
• Increasing your savings by one more percentage point - or even better, another percentage point a year - can add up to big additional savings over time. Learn more...
• Small spending changes can add up to big retirement savings. Estimate how much you can save by reducing spending for a range of categories. Learn more...
• Pack your lunch. Save the $5 to $10 you would have spent to buy a mid-day meal and you’ll save $650 to $1,300 a year, less your grocery bill. Learn more...
• Aim for short-term savings goals, such as setting aside $20 a week or month rather than long term savings goals, such as $200 over a year. People save more successfully when they keep the short-term goal in sight.
• Be diligent about turning off lights before you leave a room or your house. If you spend one minute turning off lights before a two hour trip, that’s the equivalent of earning $50 an hour. That’s some impressive savings, particularly if you do it before longer trips.
• Go local. Take advantage of opportunities in your community. See plays and concerts for free by volunteering as an usher. Use your local library more. Besides books, CDs and DVDs, some libraries now have e-readers you can check out. And most offer great free programs for all ages — from movies and lectures to various performers.
• Seek out senior specials. Many businesses offer senior discounts, but you may have to ask. Savings can be substantial; for example, Carmike Cinemas give seniors a 35% savings. One good place to check is Sciddy.com, a new daily deals site for seniors. It offers deals in several categories from automotive and beauty to pet services and more.
• Save your pennies. It’s estimated that a penny jar can save an average household anywhere from $100-$150 a year, money that can be directly deposited into your college savings.
• Join a club. Retiree couples or singles may think they don't have enough food or shopping needs to join a warehouse club. But it's not necessary to buy in bulk to save enough to quickly cover the $40 or $50 annual fee. Non-food items from books to clothes to electronics and gasoline are discounted at places like Costco and Sam's Club, and they can stock up on non-perishable grocery items. There's also the possibility of joining with neighbors or friends to split large purchases.
• Carpool. Saving one-quarter of a tank of gas a week by carpooling can save you almost $1,000 per year.
• Lower the temperature on your home's water heater to 120 degrees from the standard factory setting that could be closer to 140 degrees - on an average home, this can save you nearly $50/year, enough for one monthly deposit into your retirement savings account.
• Use the "envelope method."Put your monthly budgets for transportation, food, entertainment, etc., into separate envelopes. This can help prevent you from spending more, and anything that is left over can be dedicated to your retirement savings.