saving on a limited budget

Are you living day-to-day or from paycheck-to-paycheck? If you are, you are not alone. Many Americans are now finding themselves in a financial crunch. At the same time, financial advisors are still encouraging Americans to save for retirement. Trying to save is where you may feel hopeless. There is, however, good news. The good news is that there are still ways that you can save for retirement, even when experiencing financial problems.

The first step to take depends on your age. If you are between the ages of forty and fifty, you will want to closely examine your retirement goals. This includes both your wants and your needs. How much money do you need to retire? To determine an amount, look at your living situation or use a retirement calculator to get the actual amount you will need to retire. How much will it cost to survive with basic necessities, including food, shelter, health insurance, and transportation? Next, examine your retirement goals, wants, and needs. Do you want to start your own business? Do you want to travel? Is there a hobby you want to take up? Examine the costs of those activities.

Even if you are between the ages of twenty and thirty, your retirement goals are still important. Of course, you will want to sit down and determine how much money you need to retire, but this can wait a few years. If you are on a tight budget, it may first be a good idea to examine ways that you can save money for retirement and cut expenses. As an important reminder, you will come to a point in time where you must examine your retirement years and set some goals for those golden years.

For now, you can start saving money for retirement when living day-to-day, you will want to track your spending, meticulously. Because most individuals and couples blow their budgets on the small things. The little things are where it's easy to justify the spending. You always stop and think twice about the bigger purchases. So you should budget for at least a month to go through a full month of actual spending. You will want to record every single purchase that you make, including a small bag of chips or a cup of coffee. At the end of your month, look at your spending list. Circle all of the items that you can live without or make other arrangements for. Don't forget to review your monthly bank statements. How about stopping the many monthly subscriptions you probably have. You probably are not aware of half of them. Check your bank statement and you may be surprised.

Once you have a list of items that you can live without, it is time to make some changes. These changes involve cutting expenses and eliminating unnecessary purchases. The good news is that you do not have to totally do without. You can still save money by taking a few simple steps. For example, instead of buying a cup of coffee on the way to work each morning, make your own at home. If you are known for buying new clothes and shoes often, consider shopping at a department store or a thrift store, as opposed to a high-end clothing store. There are so many different ways for you to save money. And how much is that cable bill?

Now, saving money is great, but only if you put that money where it needs to go. Do you have a 401(k) plan? If so, start applying your new extra money to that plan. If you do not, open up an Individual Retirement Account (IRA). There are other options that you have as well, such as your savings account at your local bank, mutual funds, stocks, and bonds. Some of these methods are riskier therefore, you will want to spread your money out or diversify where you keep your money.

As you can see, there are a number of ways that you can save for retirement, even on a limited budget. Whatever approach you take, be sure to stick with it.

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