Despite the changes to theLockheed Martin retirement plan, you can still use it to save money for retirement. However, how comfortable your retirement is, depends on how much money you save throughout your working years.
Statistics show that 56% of Americans have less than $10,000 in retirement savings. That is nothing close to what you need to retire comfortably. And even if you have more than this in your retirement accounts, it could still be much less than you would need. It would not hurt you to increase your savings. Here are simple ways for you to cut down your regular expenses and improve your savings rate:
1. Cut down on your entertainment costs
The average American household spends $3,203 on entertainment costs in a year. That covers video games, music, movies, cable TV, etc. It is quite a significant amount of money for something that is not a basic need. And you need to cut down on your entertainment costs. So, how can you cut down on entertainment costs?
Well, you can start by finding affordable events in your locale to attend. There are many community-based events that you could attend cheaply or even free of charge if you took the time to pay attention to local news. They include local sporting events, church events, and openings of art galleries, etc.
You should also think about asking for discounts if you qualify. These include discount offers to military veterans, seniors, members of certain clubs, etc. Also, think about taking advantage of special entertainment offers when the prices are lower.
You can also eliminate your cable TV subscription. And perhaps opt for streaming services when you need them. If you were to cut your entertainment costs by half, you would save about $1600.
2. Cut down on your food expenses
The average American household spends $7,729 on food a year. That is a significant percentage of the household budget. Yet there are ways you can cut down on food costs.
To reduce your food expenses, think about how often you go out each month and how much you spend. Cut out your eating-out expenses by half and choose to stay home the rest of the time. Also, ensure that you order less takeout. Between the cost of buying the food and tipping the delivery person, you will end up spending more than you should.
You should also buy food in bulk if it doesn’t spoil quickly. These include foods like wheat and corn flour, cereals, etc. Buying in bulk enables you to take advantage of wholesale prices this cutting down on costs. Eat food that is in season when the supply is high, and the costs are lower.
Think about reducing your meat intake. And learn basic cooking and baking skills and use them for cooking large food quantities that you can refrigerate and freeze. Then make use of leftovers to avoid wastage.
If you cut down your food costs by 20%, you would end up saving about $1,545 a year.
3. Cut down your vehicle-related expenses
A typical American household spends $9,576 on vehicle-related expenses. These include the costs of buying a vehicle, gasoline, and other expenses like insurance and maintenance. While a car may be necessary, you don’t have to spend so much to pay for the privilege of owning one.
You can try to request for telecommuting privileges in the workplace to cut down on fuel costs. That may also eliminate the need for more than one car in your home. If you live near your workplace, you should also think about cycling to work instead of using a car. Carpooling is an additional way to cut down on car costs.
Other strategies for cutting down on vehicle-related expenses include buying a car that you can afford. The average car payment is $554 for a new car and $391 for a used car. If you sell your expensive car and buy a used car outright, you may be able to save more. But you can also opt for a used car that is still in good condition to cut down on car buying costs.
If you only do one thing and buy a used car using a loan, you could save $163 a month and 1,956 a year. The other vehicle cost-effective measures can save you even more.
Conclusion
The more you save for your retirement, the better off you will be. A reputable financial advisor can help you set up the best savings plan. But by doing simple things like reducing your entertainment, food, and vehicle-related costs, you could save over $5100 or more. And that would give a big boost to your retirement savings.