If you are like the majority of Americans, you are just doing the best you can to pay your bills, send your kids to college, pay for medical expenses and deal with life’s little emergencies. So perhaps you might not have your dream retirement savings account quite yet. No need to panic though. There is no better time than right now to start building your nest-egg. With just a few steps gathered from experts at bankrate.com, bankingmyway.com and wallstreetcheatsheet.com, you can be well on your way to making sure you spend your golden years exactly the way you deserve.
1. Create Your Budget
Creating a budget is the single most important thing to do when you finally hunker down and start building your nest-egg. You need to first decide what your goals are for your retirement so that you have an idea of what you are working towards. There are some really helpful online tools to help you determine how much you need to save if you start today, like this one from bankrate.com.
2. Indulgence Fee
This is such a great idea. If you want that $4 morning latte from Starbucks just go for it! But then you have to put $4 into your nest egg fund. There are two benefits to this plan. First, it makes you think before you frivolously spend your money while also allowing you the freedom to indulge while beefing up your nest egg.
3. Live a Raise Behind
All of us get excited when we get rewarded for all of our hard work with a raise. The problem is that instead of just continuing to live the way we’ve been living we spend more because we have more money. A great way to build up your nest egg is to do the exact opposite. Continue to live the way you’ve been living and put the extra monthly money into your savings.
4. Downsize Your House
When you start making more money at your job fight the urge to buy your dream mansion. Live in a house that is comfortable for your family but doesn’t make it so that you are living beyond your means. Not only will you save money in mortgage payments but also in taxes, upkeep and furnishings, ultimately allowing you to beef up your nest egg.
5. Skip the Car Payment
Is your car paid off? If so, don’t go out and buy a shiny new one just to keep up with the Joneses. A car is simply transportation and as long as what you are driving is reliable for your family then keep it as long as it is a safe, viable option. When you finance an automobile you are paying a lot more than what the car is worth over the life of the loan.
6. Do Something Part-time For Extra Money
Do you have a special skill that you do for fun like making jewelry, doing graphic design or building furniture? Try and turn it into a money making venture. Even if it is at a small scale the extra money will be added straight into your savings and you’ll be enjoying it while you are doing it. Check with your tax advisor and see if there are also some added tax benefits for operating a part-time side business.
7. Get Professional Help
You don’t have to do this all on your own. A financial advisor will help you set goals and figure out exactly what steps to take to reach them.
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