How to Find Money to Save for Retirement

Retired couple on a biking road trip along the coast

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One common reason people do not save money for retirement is that they feel that they can't afford to. There may be times in each person’s life when things are tight enough that this is true, but more often people are unwilling to make the necessary sacrifices to really save for retirement. It is important that you do not rely solely on Social Security for your retirement. If you cannot save for retirement you need to change something in order to save.

Tighten up Your Budget

You may need to tighten up your budget. If you look at your budget you should try to shave at least a hundred dollars off somewhere. You may simply cut out your cable bill or cut back on your entertainment expenses. If these things are too important you may cut back on your grocery budget or try to reduce the number of other bills.

Consider Taking a Second Job

If you do not see any areas that you can cut back on your expenses, then you may need to take on a second job. If you pick up an extra shift a week, you should have enough to begin saving for retirement. Be creative in the jobs that you look for. If you get a job at your gym, you can get your membership for free which frees up that money for retirement, while adding extra money to put towards retirement as well.

Use Your Raises to up Your Contributions

An easy way to increase your retirement savings is to automatically funnel your raises into your contributions. This will help you to save money, and it will not affect your lifestyle at all. If you receive a four percent raise each year, you will soon be saving the recommended fifteen percent of your income specifically for retirement. If you start saving for retirement with your first job, you will not miss the money because you will be making more than you were as a student.

Remember Small Sacrifices Now Are Worth It

The sacrifices you make now will prevent you from making bigger sacrifices when you are older. Think of the smaller sacrifices of eating out less often and skipping one movie a month and compare it to making the choice of which medicine you can afford to buy. This can be a motivating factor as well. As your parents retire, you may be able to see how their choices are affecting them now. It is important to start out saving for retirement as soon as possible. It helps create a habit, and it means you will need to give a smaller percentage of your income to retirement each month.

Handling Retirement Contributions If You Are in Debt

If you are trying to get out of debt, you may want to minimize your retirement contributions to get out of debt. If you do this, you need to maximize your retirement contributions as soon as you are debt-free. In fact, the money that you used for debt payments can go directly to savings including investing for retirement. You can set up a Roth IRA through an investment firm where you contribute money monthly, and you can take some of your old credit card or debt payments and start paying yourself each month.

Make Retirement Savings a Priority

Retirement savings should be a priority, although it is one of the easiest things to push aside since retirement seems so far away. You should not be making excuses that limit the amount you contribute to retirement. By slightly modifying your current spending habits, you should be able to begin saving and still enjoy life. If you can make saving for retirement automatic, it will be easier to reach your goals.