It’s easy to think of retirement as being far off into the distance. Even as we get closer to the big day, it seems too far away. But one day, you’ll get there, and you want to make sure you’ve maximized your savings to put you in the best position possible. These practical tips can help you get there.
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Before we get into the practical tips themselves, work on getting your mindset right. As Jonathan Swift once famously said, “A wise man should have money in his head, but not in his heart.” When it comes to financials, thinking about the subject in a rational, productive way is half the battle. There will be good times (think raises, bonuses, or even starting a new job) and challenging times, and if you keep the longview in mind, you’ll improve your odds of success. So with that said, let’s dive in.
1 | Make smart choices with groceries.
This may seem like an odd place to start, but we all need to eat, don’t we? Since this is a weekly expense for many, or biweekly depending on your shopping habits, it’s also one of the surest ways to go one of two directions: save a lot of money or be wasteful in spending. Consider these handy grocery saving tips like always making a list beforehand, hunting for deals, opting for store brand, and consistently evaluating what you’re not eating to avoid waste. Saving an extra buck here and there isn’t much, but if you do it consistently, all the time, that’s where the dollars and cents really add up.
2 | Stop buying things you don’t need.
A classic one: Extended warranties. Another common one: unused subscriptions or memberships. But that extends to the bigger price tag items too: new cars, fancy clothes, a bigger house, or these items you probably don’t need. You’ll be surprised how fast the savings pile up with this in mind.
3 | Develop a sound investment strategy.
As Trinity College points out with their “Beginner’s Guide to Retirement,” a big component is making your money last and that means “a sound investment strategy.” If it’s not something you’ve thought about before, spend a little time researching, talking with a financial advisor, or connecting with your bank or the company sponsoring your retirement plan because they can often help too. There are plenty of resources out there and they can help you hit this item out of the park.
As you think your investment strategy through, become familiar with your saving options – whether it’s a high-yield savings account, a 529 for education, a 401k, or something else, know what’s out there.
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4 | Focus on saving.
As the Department of Labor advises with its #1 tip, “Start saving, keep saving, and stick to your goals.” It’s perfectly fine to start small and grow steadily from there over time. And there will be times when you need to save a little less, those tough situations we all face time to time, but make sure you have a plan to right the ship to saving again when you’re able.
One tip from financial expert Rebecca Awram, a mortgage advisor at Seniors Lending Centre, is to compare yourself to benchmarks for savings recommended for your age bracket. There are plenty of listings out there based on where you should be and they’re regularly updated. Make adjustments to your savings strategy based on that.
5 | Keep track of your spending habits.
Sounds simple enough, but if you haven’t gone line-by-line in a while to see how you’re spending your money, it’s worth a visit. Focus on your budget baseline, look for areas you can save, and then find ways to maximize your income like employer matching and other opportunities.
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6 | Give your income a boost.
Whether it’s tutoring, babysitting, pet-sitting, lawn mowing, picking up some contract or freelance work, or something else based on your expertise and background, there are plenty of ways to build up some income on the side. This can make a big difference to help you save a little bit more.
7 | Start small.
Overwhelmed? Literally start anywhere. You have way more options than you may realize: work on eliminating your debts, automate an extra percent of your paycheck into retirement funds, focus on investments that can be compounded over time, utilize coupons, or use cashback tools. Little changes now can lead to big rewards down the road.
