Security and Freedom: Why You Should Save for Retirement
You Don't Have to Sacrifice Everything Now to Save for the Future
If you’re looking for specific changes to make to save money, think outside the box. Yes, the big savers are the big ones for a reason: get a roommate, sell your car, move back in with your parents. Those are great ways to make huge financial strides in a short period of time. If that feels like too much of a sacrifice, remember my golden rule: little differences add up to big results.
I used to go to my favorite bar at least once a week for a little thing called "$2 Tuesdays." Any well liquor with one mixer, or a selection of certain beers (PBR anyone?) was only $2. You could have yourself a grand old time for $10 at those prices.
Except it was was never just $10. I also always left a big tip, usually 100% (because when you go to the same bar once a week for literally YEARS, you get to know the bartenders pretty well. You want to tip your friends.) And of course, there was a late-night snack to help soak up the drinks. Sometimes there was a cab back home. So my $10 night out turned into a $30-$40 night out.
Let’s do that math. $40, four times a month equals $160. $160 x 12 months a year is $1,920. That’s more than enough money to start saving for retirement. Instead, I was drinking that money away. And that was just my Tuesday drinking! If I went out just one other day a week, I could easily be spending double that in one year.
If you’re someone with a love for restaurants, cut back to one night a week. Ask your boss if you can work from home one day a week and pocket the gas money for your retirement accounts. Trade-in soda at the grocery store for tap water at home. Sell old books, clothes, or furniture you don’t need.
I gave up nights out to see a big difference in my bank account. Be honest with yourself about one area of spending in your life. You don’t have to go cold turkey on every non-essential spending category! Remember, you want to enjoy the present as well as the future. Try cutting back in a different area each month. See which changes feel sustainable, and make them a new part of your lifestyle.
I found by giving up my "$2 Tuesdays," I was able to save more and make more time for activities I had been ignoring. I read more books, and I powered through all seven seasons of "The West Wing." (A decision I stand by!) Don’t think of saving money as a sacrifice. You’re simply opening the door to a new kind of life for yourself.
There are a million ways to save or to make a little extra cash. Once you’ve found a way that works for you, just make sure that the savings find it’s way into your long-term investment accounts.
Time Is On Your Side - If You Use It
Think about the future you. Think about what you wanted to be when you were a kid. Was it an astronaut? The president? I’m betting you didn’t think, "I want to be homeless and broke when I’m old!" By not saving for retirement, that’s what you’re setting yourself up for.
Find the money in your budget to start saving for retirement now. Gift your future self the kind of life you’re enjoying now instead of condemning yourself to a scary future. Little changes make big differences, and time is on your side in your early twenties.