Saving for retirement can be quite costly, and it’s only getting more expensive by the generation. While the saying has long been “a million to retire on,” new estimations suggest that the millennial generation will likely need $1.8 million in retirement savings, and the generation below them may need as much as $2.5 million or more. That’s why it’s more important than ever that you start planning ahead for your future as soon as possible. Although it may seem far, off, here are some things you can do to help you start saving for your retirement and cutting down on costs once you’re retired.
- Stay on top of debt.
- If you have credit cards and other expenses that are taken out on credit and accruing interest, make sure you keep in mind how much interest can actually cost. On average, most households shell out $2,630 in the interest from credit cards alone each year. If you’re retired and living on a fixed income, that’s an expense that you could certainly do without. By paying off your credit card bills each month and avoiding buying things on credit, you can save yourself a lot of money that would be wasted on interest.
- Reduce food waste.
- The little scraps of food that you throw away at the end of your meal don’t seem like much on their own. However, an average of 25% of the food that we buy goes directly into the trash, wasted. Be more mindful of the food that you buy, the food that you prepare, and the food that you eat, and cut down on waste by eating leftovers, making smaller meals, and not buying food that you won’t eat.
- Rethink your living situation.
- Are you living alone in the same house where you raised your family? Do you have more space than you know what to do with? When you’re nearing retirement, a huge cost that you can greatly reduce is the cost of housing. Consider the space that you’ll actually need, and downsize accordingly. You’ll save a lot of money and have less property to take care of.
Bonus: If you work hard, cut unnecessary expenses, and save your money, you actually retire early. The key here is that you should start cutting your expenses now, as soon as possible. Unnecessary costs, especially on a recurring basis, can end up costing you lots and lots of money in the long run. For example, if you pay the $8.99 each month for a Netflix subscription, over 50 years it will cost you over $5,000, all of which could have been contributed to your savings and earning you interest.