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July 1, 2020
Using tools like your employer’s 401(k) or automatically taking money out of your paycheck are tried-and-true methods for successful retirement planning. But if you can look for less obvious ways to boost your retirement savings, you’ll reach your long-term goals much quicker.
Here are some little, yet highly effective, ways to save extra money for retirement from Kyle James, a consumer guru and owner of Rather-Be-Shopping.com, a site dedicated to helping consumers save money with frugal living hacks and personal finance tips.
Consider a checking account that automatically rounds up purchases and puts the difference in a savings account for you. For example, when you buy a cup of java from Starbucks for $1.70, the amount gets rounded up to a flat $2, and the $0.30 get transferred to savings.
The beauty of a “keep the change” account is you save for retirement slowly and thus don’t notice a significant impact on your day-to-day finances. Popular banks that offer such accounts include Bank of America and Wells Fargo.
By packing your own lunch and toting it to work, you can easily save $200-$250 per month when compared to eating out five days a week.
While that savings is definitely significant, in terms of saving for retirement, it only makes a difference if you consciously take the money saved and add it directly to your retirement or savings account. Otherwise, the money you save brown-bagging every day just leaks out into other spending areas.
Public libraries are a great place to borrow books, but did you know many have a fantastic selection of DVDs available for loan as well? If you typically rent two movies a month and buy at least one new book, you can save an easy $300 a year and stash it in a retirement account by utilizing your local library.
When it comes to services like cable, satellite TV, Internet, phone, and wireless, consider calling and negotiating a lower monthly bill. Do some research and find any cheaper alternatives from competing companies; use that as ammunition when you call the company you currently work with.
Tell the first person you talk with that you’re interested in canceling your service as it’s just too expensive; they’ll transfer you to the loyalty or retention department. At this point, tell them you found a cheaper option with a competitor and ask if they can beat it. In many cases, they will beat or match the competitor’s quote, as they don’t want to lose your business and know you’d be unlikely to return. You can easily save $30-$50 a month doing this – money you can stuff directly into a retirement account.
If you have a strong driving record, consider raising your car insurance deductible and throwing the difference toward retirement. By raising your annual deductible from $250 to $800, you can easily save up to 20% off your premium payment. Also, consider dumping collision insurance payments if your vehicle’s value has dropped below $5,000.
The key to making the above work as retirement savings tools is consistency. For example, make it a goal to call and negotiate a lower bill every month or examine insurance policies every quarter for ways to save. Turn these tips into healthy habits and your retirement savings will definitely see a positive long-term result.
One of the easiest ways to save for retirement is to use an online retirement calculator to estimate what you will really need. Having a goal in mind is a great way to find the motivation you need to save.
The NewRetirement Retirement Calculator is easy to use but extremely comprehensive and can help you know what you should be saving now as well as get an idea of what your future will look like.
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