While it may seem like retirement is the furthest from you mind, and sure, it could be decades away, but that doesn’t mean that saving should be on hold until down the road. In fact, the earlier you start saving, the more you have for your nest egg to grow over time. Whether you decide that a 401(k) or IRA is in your best interest based on your current and future income, by making a few money moves now, you can free up the most money you can and really maximize retirement savings.
Check Your Credit Report
If you have applied for a home purchase or refinance, a personal loan, or even your credit card, you know that not only is your approval fate decided by your credit score, but so is the interest rate you are given. The higher your score, the more opportunity you have to take advantage of the best rates on the market, so the lower your score the more you are paying in interest every month. By checking your credit report every year you can make sure that all accounts are accurate and up to date so you don’t waste your hard-earned money away on interest.
While certainly the goal is that you have more money coming in instead of going out each month, but that doesn’t mean you can’t hone in on every dollar that you spend each month. Reducing unnecessary purchases is important, but even the “necessary” purchases could be tweaked. From cancelling your cable bill and opting for a streaming service for a fraction of the price or reducing going out to eat for going grocery shopping instead, could easily save you hundreds of dollars every month that you can put to better use in saving for retirement.
You may think you have an idea of what you’re spending on monthly bills, food, gas, and entertainment, but until you take a look at last month’s debit or credit card statement is when you can come to a rude awakening of where your money is actually going. By going line by line, you can see which purchases would be more impulse and probably could have been avoided, compared to the must-have’s. Taking a step further, you can put into a budget so you can further make sure you stay within your monthly spending guidelines.
Don’t Miss Out on Free Money
By using a rewards credit card, you can earn points to use for hotels or gift cards, not to mention cashback (which is basically like making money on the side), just by making the purchases that you were going to make anyways and have been missing out on free money that could add up to hundreds of dollars per year. Also, if your work offers company-matching retirement contributions, anything less than contributing the most to earn the full company match could be leaving thousands of dollars a year on the table, and that is not even thinking about how much that could add up to over the next decades of building up until retirement.