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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.

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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.

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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.

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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.

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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

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Published on November 20, 2018

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The Best Ways to Save Money Even Impulsive Spenders Can Get Behind

The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.

Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.

In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.

Why Your Past Prevents You from Saving Money

Are you constantly thinking about your financial mistakes?

If so, these thoughts are holding you back from saving.

I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.

It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.

For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.

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How to Effortlessly Track Your Spending

Stop manually tracking your spending.

Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.

When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.

Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.

The Truth on Why You Keep Failing

Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?

Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.

Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.

If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?

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Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.

Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:

  1. Save more than 50% of your available money (after expenses)
  2. Only buy nice things after saving
  3. Automate your savings with automatic bank transfers

These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.

How to Foolproof Yourself out of Debt

Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.[1]

So how can you separate yourself from the 60%?

By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.

This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.

For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.[2]

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Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.

A Proven Formula to Skyrocket Your Savings

Having proven systems in place to help you save more is important, but they’re not the best way to save money.

You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.

What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.

Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.

Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.

During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.

Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.

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Transform Yourself into a Saving Money Machine

Saving money isn’t complicated but it’s one of the hardest things you’ll do.

By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.

The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.

Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.

Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.

What are you waiting for? Go and start saving money, the sky is your limit.

Featured photo credit: rawpixel via unsplash.com

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