Money-Saving Trends for 2014
saving and spending (Photo credit: 401(K) 2013)
Most Americans are not saving enough for the retirement they’d hoped for. In fact, according to USA Today, more than 30 million Americans have no retirement savings at all. If this is your situation, then 2014 is the time to change. But, how should you begin saving?
Educate Yourself
The last few years have seen a huge rise in online courses aimed at adults. Whether you’re brushing up on your high school Spanish, taking a cooking class, experimenting with MOOC offerings, or simply viewing a tutorial on YouTube, odds are good that you’re using the Internet to learn.
So, it stands to reason that in 2014 more adults will choose to learn about personal finance and saving strategies online. Take advantage of all of the courses available to you and educate yourself on investment opportunities and financial planning. Though not everything you learn will be appropriate to your situation, you’ll be empowered with the knowledge that there are many ways you can shore up your finances for retirement, even if you got a late start.
Live Small, Save Big
Though it’s hardly a new strategy, we predict saving trends for 2014 will include the old “cutting corners” advice for workers approaching retirement age. By downsizing your home; putting off upgrading your car, phone or computer; and choosing less expensive options for your vacations and daily expenditures, you’ll be able to make a larger contribution each month to your retirement fund. That much is easy to see, right?
However, in addition to putting in those extra dollars, you’ll also be preparing yourself to live comfortably on less — which will be an important skill once you do retire if you are planning on doing so with a smaller nest egg.
Closely examine your monthly bills. Do you really need all of your cable channels? How often do you make impulse buys? If you can put aside even a few hundred dollars more per year, you’ll notice a large difference over time.
Spend Money to Save Money
However, though spending less is usually a good idea, don’t put yourself in a situation where you’re not spending enough. There are times when you have to spend money to save money, and planning for retirement might be one of those. Things like insurance policies, fees for financial planners and payments for retirement homes are all good uses of the money you have now to safeguard the money you wish to use for your retirement.
If you are in your 30s or 40s and have no retirement plan in place, then it will be worth the money for you to talk to a financial planner or retirement consultant who can inform you about the best ways to save for the future and to make low-risk investments that will help augment those savings. People in their 50s or 60s who are planning on taking Social Security payments in the next few years may also want to pay for expert advice as to the dozens of ways possible to implement those payments so that you get the most benefit for the longest time.
Increase Your Contributions
Though millions of Americans have no retirement savings, more than 40 percent of those who do save for their golden years have upped the contribution to their retirement plans, according to Today. Though it can be hard to justify taking even more money out of your paycheck each month, having a higher contribution level now may mean that you can cut back on your contributions later in your career, when family obligations may mean that you want to have some extra cash on hand.
If you work for a larger company, ask your human resources department if anyone can inform you about your options for contributions. If you work for a smaller company, or if you’re self-employed or own your own business, you may find community organizations that can help you. Contact your local chamber of commerce or the community library to see if they have any upcoming speakers or events where you might find information to clarify your options.
About the Author: Martina Schmidt is a former economics teacher who now runs a consulting business for family financial planning.
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Category: Budget, Saving Money
