Advertising
Advertising

5 Smart Moves For Millennials To Boost Retirement Savings

5 Smart Moves For Millennials To Boost Retirement Savings

Retirement might not be coming your way for quite some time, but if you haven’t started planning for it yet, it’s possible that you’re already a bit behind. As the outlook on retirement looks dimmer and dimmer for our generation, the need to contribute early and often to a retirement savings fund becomes all the more important. Fortunately, there are several ways you can boost your savings now to build your funds faster and secure a more stable future for yourself in your older age.

Here are six smart moves you should be making now to boost your chances of building a sufficient fund for the future.

1. Automate Your Savings

Americans are notorious for neglecting the importance of building a savings account. Nearly seven out of ten Americans have less than $1000 in a savings account. One of the best ways to make sure you’re actually putting money away instead of spending it is to automate regular contributions to your savings accounts. Of course, you’ll want to automate your retirement savings so that a small amount comes out each month, but you’ll want to contribute to a personal savings account as well.

Advertising

Set up an automatic funds transfer between your checking and your savings account. Set an amount that is large enough to build funds over time, but small enough that it doesn’t break your bank each month. For your retirement savings, check with your employer to see if the company offers an automatic payroll deduction that contributes to your 401(k).

2. Take Advantage of 401(k) Matching

While you’re discussing your savings options with your employer, be sure to ask if the company offers 401(k) matching. Many companies will offer this to their full-time employees. In its simplest form, 401(k) matching means the company will match a percentage of your monthly contribution to your 401(k) with its own money to help you build funds more quickly.

Not all employers will offer 401(k) matching, but just asking about it can be helpful in putting the idea of implementing a matching program on their radar.

Advertising

Before you head in to talk to your employer, it will be helpful to have a little background information on what a matching program entails. Check out this guide for a quick overview of what a typical 401(k) matching program might look like.

3. Refinance Student Loan Debt

Debt from student loans is one of the most common factors affecting the millennial generation’s ability to put money away in a retirement savings account. In fact, about 40 million Americans are currently paying off student loan debt. Although it might seem like you’re stuck with the same monthly installments for the rest of your life, you actually have an option to lower your monthly payments and free up some of your monthly income to put away into your retirement savings account.

Refinancing student loan debt can help you adjust your payments to an amount that makes it easier to have enough money to save each month. The process can even help you identify ways to lower interest rates where possible.

Advertising

If you have any type of loan out, chances are you’ve received a letter from at least one company offering to help you refinance your debt. What you should know is that not all companies are equal in terms of their abilities to provide a trusted refinancing service. If you’re a bit new to the idea of refinancing, check out this guide to learn a little more about some of the top companies for refinancing student loan debt.

4. Cut the Cord on Cable

The average cable bill is around $99 a month. When you add on your internet connection, this will likely be an additional $20 to $45 per month for a standard connection. Add this up, and the amount you spend each month for entertainment gets pretty high! If you have a monthly cable subscription and are constantly wondering where your money went at the end of each month, this is likely one of the major culprits contributing to your lack of funds. This is why the trend of cutting the cord on cable is growing among the millennial generation.

Although most of us aren’t quite ready to cut the cord on internet, many of us are willing to nix cable and sacrifice the ability to binge watch marathons on our favorite channels to save about 100 bucks a month. You can sign up for a monthly streaming subscription like Hulu or Netflix for around $15 a month to replace cable and save big on your monthly expenses. All you need is a streaming device like Chromecast or Apple TV to stream content from your computer to your television.

Advertising

Cutting the cord will help you save quite a bit of money each month that will be put to better use in your retirement savings account.

5. Stick to the Same Car for Awhile

We all love the idea of cruising around in a beautiful new car, but what we often don’t realize is that we’re throwing a lot of money down the drain when we insist on swapping out cars every couple years or so.

Experts say that when an individual is able to stick to a plan of keeping a car for at least 10 years, they purchase half as many cars in their lifetime. This means you could save a huge amount of your money and be better set for retirement if you commit to owning a car for awhile before you look into a newer option. Not to mention, after the course of a three to five year loan, you’ll have at least another five years of debt-free ownership of your car if you keep it around for at least 10 years. This means more money in your monthly budget to put toward saving for retirement.

So there you have it, five smart ways you can save money now to boost your retirement savings and prepare for a comfortable lifestyle in the future. Hopefully these tips will help you establish a few healthy saving habits to build an effective retirement savings account. If you have any questions or perhaps a tip you’d like to add for other readers, comment below!

Featured photo credit: Pexels via static.pexels.com

More by this author

6 Ways to Get Out of a Creative Rut 5 Incredible Underrated Locations to Spend a Year 5 Smart Moves For Millennials To Boost Retirement Savings 5 Ways To Boost Your Website’s Success In 2017 How to Tech Out Your Home With DIY Security

Trending in Money

1 How To Pay Off Credit Card Debt Fast: 7 Powerful Tips 2 How To Make a Million Dollars in 7 Steps 3 7 Cheap but Powerful Products That Can Help Your Waste Less Food and Save Money 4 How To Retire Early (And What To Consider Before You Do) 5 How To Create a Budget (The Complete Beginners’ Guide)

Read Next

Advertising
Advertising
Advertising

Published on January 8, 2021

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

Ever wondered whether your credit card debt is the reason you’re in a bad financial situation? You can’t enjoy any fun activities because a good chunk of your money goes toward debt payment. Heck, you’re even behind on some of your monthly bills.

The effects of clumsy debt management are too many to list here. This guide is going to help you discover how to pay off credit card debt fast and start chasing your financial goals.

Debt problems are the last thing anyone wants to encounter. But things can get out of hand when all the “little debts” you take accumulate in interests.

What if you knew some simple and proven ways to be debt-free quickly? Implementing them would mean better financial health for you. It becomes possible to free up cash for your “wants.” These include taking a trip or buying something you’ve always desired. All that while paying your bills on time!

Let’s not wait any longer. Here are 7 powerful tips for paying off credit card debt fast:

1. Pay More Than the Minimum Credit Card Payments

Many people only pay the monthly minimum on their credit cards. Truly, that’s the right amount for staying on good terms with your credit card company. But you need a different approach if you’re looking to achieve financial independence within a short time.[1]

Most of your payments go toward interest costs when you only pay the minimum amount. A substantial sum of your balance remains standing. As a result, it becomes more expensive to eliminate your debts.

Advertising

You don’t want to wait more than 10 years to get rid of debt while it’s possible to do it sooner. All you have to do is double that $100 minimum payment to $200 or go higher.

The good thing is that minimum credit card payments are affordable in most cases. By paying a higher amount, you reduce your interest costs, lessen your borrowing period, and boost your credit score.

2. Start With High-Interest Credit Card Debt

If you have more than one credit card debt, prioritize putting the extra money toward the ones with the highest interests. This debt pay-off strategy, known as the debt avalanche method, is essential for being debt-free quickly.[2]

First, you need to list down all the credit card debts you have in the order of their interest rates. Next, you choose the one with the highest interest and pay a significant amount toward it each month. It can be an amount twice or even thrice larger than the minimum payment.

At the same time, you make monthly minimum payments on the other debts. Their interest charges won’t be as costly as that of the first debt on your list. You only move on to the next high-interest debt after the first one is gone. Remember that your focus is on the interest rates and not the balances.

3. Revisit Your Budget

Budgeting is useful for tracking your financial moves. Once you create a budget, some tweaks along the way can make it work for you better. One situation that requires you to revisit your budget is when you’re struggling with debts. It might hurt a bit to slash some expenses. But you also don’t want to miss out on achieving financial freedom in the long run.

You can reduce some variable expenses to free up more cash for credit card debt payments. They’re the ones that change from time to time. Some examples are groceries, fuel, and clothing.

Advertising

Other opportunities for cutting down your spending lie in non-essential expenses. Instead of dining out all the time, you can cook at home more to save money. You can also share some subscriptions with friends and pay a fraction of the cost.

If you’re determined enough, you can eliminate all your unnecessary expenses and focus on paying off your credit card debt first.

4. Avoid Using Your Credit Cards

Do you want to know how to pay off credit card debt with a low income? One simple way is to stop using them. Having your credit cards everywhere you go means that you’ll be more tempted to buy unnecessary stuff. In this case, you spend money that you don’t really own and get deeper into debt.

The quickest fix to stop the debt build-up is spending with cash. You’ll be more aware of everything you can afford at any particular time. If you decide to keep one or two cards to ease the transition, always make wise choices. For instance, only use them when experiencing financial difficulties.

It’s best to categorize your fun activities under “discretionary spending” in your budget. This way, you won’t need more debt to kill your boredom. By halting your credit debt from accumulating, it’s easy to pay down what you already owe and be happy with the progress.

5. Start a Side Hustle to Boost Your Income

You’re probably turning away a lot of money by not monetizing your skills. Everyone has something that they’re good at doing. And you can use that to generate extra income for attacking your credit card debt.

If you look around your neighborhood, you can find several side hustle opportunities. It can be pet sitting, tutoring, or lawn mowing. You can start an online business by offering services such as digital marketing, content creation, and web development. Such skills go in high demand on freelance sites and job boards.

Advertising

Finding clients on social media is also a good strategy to utilize your skills and make more money. Facebook groups, Quora Spaces, and subreddits are some places to look for side jobs. You only have to join a niche-specific platform, share your services, and respond to any opportunities.

It’s possible to learn a skill, practice it, and earn from it. Use the free resources online or purchase some e-courses to get started.

6. Sell Your Used Items for Extra Cash

Starting a side hustle isn’t the only way to generate extra money. You can turn unwanted items into cash for paying off credit card debt. Whether it’s an old TV, book, or furniture, there is always someone itching to buy your used stuff.

A garage sale, as much as it’s old-fashioned, is perfect for getting your neighbors and passers-by to buy from you. You keep all the money because there are no business permits or taxes involved. While you may not make much cash, it’s better than leaving your stuff to go defunct in your storage.

Other than that, you can sell your used stuff on online marketplaces. Facebook groups are great places to start if you want quick approvals and hence sales. You only have to ensure that your listing follows Facebook’s commerce policies.

When selling any pre-owned items online, ensure they’re in good shape to avoid problems with your buyers.

7. Know When to Seek Help With Your Debt

Asking for help with your credit card debt can be challenging to do. But letting it drown you is a road you don’t want to take. While you may feel embarrassed at first, it’s the best way to get back on track when you run out of options.

Advertising

There are tons of non-profit credit counseling organizations that can offer you free guidance on how to escape the debt trap. An example is The National Foundation for Credit Counseling. They simply review your finances and help you determine the source of your financial problems. After that, they match you with an actionable debt management solution.[3]

In extreme cases, the debt solution can be:

  • Debt relief – where your debt is partially or wholly forgiven
  • Debt consolidation – taking out one loan to repay others
  • Debt settlement – the creditor forgives a significant portion of your debt
  • Bankruptcy – legal process for seeking relief from some or all your debts

It’s necessary to carefully weigh your options before deciding on the way to go. Find out how it might affect your credit score and any other risks.

Wrapping It Up

Debt is a major setback when you’re trying to prosper in life. Paying off credit card debt is essential if you want to reach your financial goals. That means having more free income, a good credit card score, and even a chance to retire early. You become more productive each day because of the peace in your mind.

So, you now have some tips on how to pay off credit fast. Go ahead and get rid of that good life progress killer!

More Tips on How to Pay Off Debt

Featured photo credit: rupixen.com via unsplash.com

Reference

Read Next