Small Sacrifices Today, Big Savings Tomorrow
Working toward your retirement isn’t easy; many other expenses – some unexpected, some discretionary – compete for your savings dollars. Would you be willing to forego one “luxury” item per workday for the sake of your retirement nest egg? You’ll be amazed at how much you could save.
In today’s world of $6 lattes, $30 haircuts and $75/month cell phone bills, it’s hard to imagine saving extra money for your retirement. Many other expenses – some unexpected, some discretionary – compete for your savings dollars.
However, cutting costs in areas you may not have thought of before could save you thousands in the long run and help add to that retirement nest egg.
The Power of One
Can you find one “luxury” item you can sacrifice to free up a dollar a day? That can go a long way toward your future security.
If you invested $1 a day (approximately $25 per month) in your retirement savings plan instead of spending it on items like specialty coffees or dining out for lunch, you could grow your savings by $4,081 in 10 years.*
Still don’t believe us…
Consider Susan and Mark, two employees who are equal in almost every way. Same age. Same salary. Same job title.
They both invest in their company’s retirement plan, but Susan socks away 6 percent of her annual income, while Mark contributes only 5 percent.
While that 1 percent may not seem like much now – less than a dollar a day – by the time they retire, Susan will have $47,818** more than Mark.
Nothing Left to Save? Take a Closer Look
If a lifestyle change like bringing coffee from home, going to a discount salon or reducing your data plan doesn’t appeal to you, there are other ways to save money that can have a dramatic impact on your savings.
Begin by tracking your expenses in an average week. Identify the routine expenses that cost you money, but may not benefit you the way they once did. For example, do you:
- Make multiple trips to the grocery store?
- Read the magazines you subscribe to?
- Buy your lunch most days?
- Watch all the channels you’re paying for with cable?
Then decide if your routine activities are worth the money you’re spending every month to maintain. If not, stop spending and redirect the money into your retirement account. With a lighter expense load, you can relieve the short-term stress caused by too many financial obligations. Plus, you can feel confident that you’re taking positive steps toward your financial future.
* Assumes an investment of $25 a month for ten years with an annual investment return of 6 percent. This is a hypothetical example and does not represent actual clients. Actual results will vary.
** For illustration purposes only. Illustrations assume an annual investment return of 6 percent with money deposited at the beginning of the month.