As a recent MSN Money article noted, “One in every four Americans is not saving for retirement at all, either because they are not thinking about it, do not really know how or, worse, do not feel they can afford to, according to a report by Country Financial.”
Sometimes the numbers that get thrown around as necessary for a secure retirement – hundreds of thousands or even millions of dollars – may act to defeat some people from planning for retirement before they even begin. Achieving such numbers can seem so insurmountable that people don’t even try. However, regular savings amounts don’t always have to be in the thousands or tens of thousands of dollars or involve big stock plays to make or break a retirement. Sometimes it’s the little actions that can make a big difference in retirement planning over time.
Thinking small to act big
Sometimes when we think about retirement, it could be in huge numbers. The reason for this is that we’re thinking of the numbers we need to live comfortably in retirement, and these numbers may range into the hundreds of thousands or even millions of dollars. Such huge figures may immediately be defeating since we may only be stashing away a few bucks here and there. However, sometimes it takes thinking small to have big results over time.
Right now, my own family is only saving about $50 a week to put toward retirement. With kids, a home, and my being self-employed, it’s often hard to squeeze out much more. It seems like such a small amount; however, over 52 weeks, it’s $2,600. While this is not a huge amount, invested each year over the next 30 years at 5 percent interest compounded annually, it could grow to almost $184,000.
Avoiding immediate gratification
Maybe one of the greatest dangers to putting money away for retirement regularly is the need for immediate gratification. Having to have that new flat-screen television, latest smart phone, brand spanking new vehicle, or whatever, can continually eat into the money that was meant to go or should be going toward retirement savings.
Over the years, our family has gotten very adept at avoiding – or at least delaying – the need for consumer gratification. We do this in several ways. First off, we’ve realized that spending time with family and friends is more valuable to us than spending money on stuff. Secondly though, when we do feel the need to buy, we ask ourselves the following questions:
- · Do we really need this or can we get by on what we already have?
- · Can we substitute something more affordable in its place and still be just as satisfied?
- · If we wait, will this item be more affordable next month, in several months or a year?
- · If we are buying now, do we have a coupon or is the item on sale at a particular store?
Such questions often give us pause to consider our purchase, and in so doing, often have us not making the purchase at all or making it much more affordably down the road.
Buying (and selling) resale
Since we’re not wealthy and don’t have a lot of extra money to put toward our retirement savings, yet we still want to put money toward our future, we’ve found that resale accommodates us in this area.
We can save on things like clothing, furniture, home goods, books, movies, video games, toys for the kids, and more by shopping at second-hand stores, thrift shops, consignment stores, and garage sales. This helps us keep costs in these areas to a minimum, but sometimes it even helps us make a little extra money to contribute to retirement savings.
I’ve been able to resell vintage books online for a profit, fix and refinish furniture and resell it at garage sales, and use consignment shops and resale stores to unload things like mirrors, light fixtures, baby clothing, toys, books, movies, and the likes. And while the profits might not be huge, they could be just enough to cover our retirement savings contributions for the week or month.
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The author is not a licensed financial professional. Calculations have not been verified by a professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.