There’s no question that saving for retirement can be difficult. Even in a recovering economy I frequently hear people on TV or the radio talking about how difficult it is to set aside money for retirement and still pay the bills. The only problem is that now more than ever we all need to be saving as much as we can for retirement. With fewer workers receiving pensions, and spiraling national debt threatening the long-term health of programs like Social Security and Medicare, we are forced to be more self-reliant where retirement is concerned than we have had to be for generations.
While that probably sounds a little scary, it’s important to remember that even the smallest steps count if they’re taking you in the right direction. The dollar amount you may need to support yourself in retirement can be a mind-boggling number. For many people, that’s enough to paralyze them into inaction. Instead of focusing on a number that may seem overwhelming, I challenge you to focus on a number that’s underwhelming and work your way up.
Let’s say you’re making $30,000 a year as a full-time worker. Could you begin by saving just 1% or an additional 1% if you’re already setting aside money for retirement? Here’s what that would look like: $30,000 X 0.01 = $300 annually. Initially that may sound like a stretch. But let’s break it down further. On a monthly basis, that means saving $25 a month or $12.50 from each paycheck if you are paid every two weeks. That’s equivalent to $6.25 a week or less than $1 a day. Think of it as one $0.89 candy bar per day or one less item on the dollar menu at your favorite fast food restaurant. On a weekly basis, it may mean cutting one large or two small lattes per week out of your budget. Bringing instead of buying lunch once or twice a week. Or it could simply mean reducing your gas consumption by two or three gallons a week by coordinating errands by location, carpooling or grocery shopping with a neighbor.
I’ve been bringing my lunch a couple of times a week – and I find I am not only saving money, I am making healthier choices by packing meals when I’m not starving! And we are eating in more often and using less prepared food – my husband has gotten interested in cooking now that he’s semi-retired and has turned into a very good cook (like his father), even trolling the internet for salmon recipes and spaghetti sauce.
Take the Dollar-a-Day Challenge
I used to keep cash in my wallet for smaller purchases, so I had a sense of how much I was spending for incidentals. But using my debit card instead of cash can disguise how much I am really spending on the little things, and I lose track of how much things add up until I look at my statement at the end of the month.
Opening your eyes to what you are really spending money on each month can force you to examine even the smallest purchases which have a sneaky way of eating up your budget. And I do believe that when there’s a will there’s usually a way to get to your goal. I encourage you to challenge yourself to save $1 a day for 30 days. Or even throw your change into a jar every night. The dollar-a-day challenge serves a real purpose. Awareness can lead to better spending and saving habits and best of all, to “found money” for savings that we didn’t even know we had in our budgets.
Will you take the challenge? If so, please leave your comments here on the progress you’re making or have made over a 30-day period.