Author: Brandon Ballenger
Some people hope to retire early. Others expect to retire a bit later, while still others worry they’ll never be able to quit working.
Wherever you fall on this spectrum, chances are good that you would worry less if you could just save a little more. Fortunately, that’s possible if you’re willing to develop a few good habits.
Following are six ways to pile up cash before you retire.
1. Make it automatic
Don’t wait until you have “extra money” — there’s no such thing. Find an amount you can save, even if it’s just a little, and get started.
The single best thing you can do is automate. That means having money automatically transferred from a paycheck or checking account into savings. Start with the max you think you can afford. If you guess wrong, you can always reduce the amount later.
Consider your retirement savings as an obligation, no different than any other bill. Because unless you plan on working until the day you die, that’s exactly what it is.
2. Spend less with a budget
A 25-year-old who sets aside just $12.50 a week — the equivalent of a meal out or a few coffees — and invests it with an 8% return will have more than $180,000 at age 65.
What makes that number more incredible is that fact that you only have to invest $26,000 over four decades to turn it into more than $180,000.
Where do you find extra money? Start by seeing where your money is going now. Track your expenses, then categorize them with a simple spending plan.
Once you learn what you’re spending on, you’re likely to see places you can save a buck or two. Take those savings and divert them to retirement savings.
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