How to Save More Money for Retirement
Money Girl tells you a smarter way to uncover more money to save for retirement. Â
Laura Adams, MBA
Q. “To get ahead and start saving for retirement, I’ve been cutting back on lunches out, clothes, and entertainment. But I still don’t feel like I’ll have enough money left over each month to really make a difference—how can I save even more?”
Answer. Although it’s smart to cut expenses where you can, reducing costs that are a relatively small part of your budget won’t allow you to gain much financial traction. The biggest wins come from slashing large categories like housing, transportation, and taxes, which could add up to over 70% of your total expenses.
Since housing is typically our largest spending category, making up over 30% of a typical budget, get serious about cutting it when you need to save more.
If you currently own your home, consider the following options:
- refinance your mortgage to reduce your monthly payments
- sell your home and buy a less expensive one
- sell your home and rent a less expensive one
- turn your home into a rental property and buy or lease a less expensive home for yourself
If you currently rent your home, start looking for a less expensive place about 45 days before your lease term expires. Use a site like craigslist.com or call property management companies to find a great deal.
Although relocating is never fun, spending time and money to move could be the key to unlocking big, long-term savings. You can use the money to shore up an emergency fund, contribute more to your retirement plan at work, or fund an Individual Retirement Arrangement (IRA), and eventually retire in style.
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About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.