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Do you make any sacrifices for lent? Perhaps sweets or some other unhealthy favorite food? Or are you trying to kick a more serious habit, like smoking or drinking? No matter what you’re giving up, lent is a great time to make a small sacrifice in your life and practice discipline.
Sacrifice and discipline are also important for retirement planning. It takes a significant amount of savings to fund a long, enjoyable retirement. In order to accumulate those savings, you may need to bypass some spending today.
A budget is always a helpful tool to manage spending. Unfortunately, many Americans don’t use one. According to a recent poll, a third of all Americans don’t use a budget.1 If you’re among that group, now may be the time to make a change.
Budgeting isn’t the only way to save money though. By making some sacrifices in your current lifestyle, you may be able to reduce your spending and put more money away towards retirement. Below are a few examples of things you could give up to boost your retirement savings:
If you’re like most people, your home is probably one of your largest expenses. It comes with a mortgage payment, but that’s not all. You also have insurance, property taxes, maintenance, repairs, and more.
When it comes to housing, bigger isn’t always better. Yes, a bigger house may offer more space and may be nicer, but a larger and more expensive home also usually leads to higher costs. The more your home costs, the higher the insurance and taxes are likely to be. A larger home often generates higher costs for maintenance and utilities.
If you’re in the market for a home in the near future, consider staying well under budget. By simply moving down to a lower price range, you could save yourself thousands not only on your mortgage, but also all the other associated costs.
Travel, Shopping, and Dining Out
Going out to eat and shop is always fun, as are the occasional vacations. While the cost of a night out may not seem that significant as a one-time expense, those costs can certainly add up over time. A budget can help you manage your spending in these areas and more.
One way to manage these expenses is to simply cut down on the frequency. For example, if you go out to a nice dinner twice a month, try cutting back to once a month and putting the savings into your IRA. Instead of going on a few big trips a year, try taking one large vacation and some smaller trips over a long weekend. You don’t have to cut these items out of your life altogether. However, reducing the frequency of these discretionary types of spending could help you boost your savings.
Do you get an annual raise at your job? Does the raise make an impact on your finances or does it seem to just disappear?
One way to make that raise more impactful is to put it in your 401(k) or other retirement savings plan. As you get a raise, simply increase your contribution to match the raise amount. The increased salary will go straight into your retirement rather than into your pocket. Over time, those contributions could compound and add up to a substantial amount of additional savings.
Ready to develop your retirement budget? Let’s talk about it. Contact us at Cornerstone Financial Associates. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
19634 - 2020/1/13