Most people hope to have a comfortable retirement with no financial worries. Unfortunately, about 50% of adults have no retirement savings. Here are a few tips to start planning for a more stable retirement.
Give Up Luxury Goods and Services
Some of the first sacrifices to make to save more include giving up luxury goods and services. Spend less on non-essentials, such as monthly massages or trips to a spa. Both activities can cost $100 or more per visit.
Giving up unnecessary expenses helps make your monthly budget more manageable. Start by cutting the most expensive purchases.
Avoid Buying New Cars
Purchase a slightly used car when you next need to replace a vehicle. The value of a new car depreciates quickly, making it a less worthwhile investment.
As soon as the car rolls off the lot, it drops in value. A car can lose 20% of its value in the first year and 40% within five years.
People tend to keep their vehicles for about a decade. Buying a used car instead of a new one could save over $20,000 every 10 years.
Complete Repairs and Renovations Yourself
Sacrificing the convenience of hiring a professional can save on all types of household repairs and renovations. DIY projects take up time and may be intimidating at first but often result in major savings compared to hiring a contractor.
You can save up to 50% on some projects, such as installing a new roof or remodeling the bathroom. While these projects require tools and knowledge, they become easier and more affordable with time.
Downsize Your Home
Living in a more modest home is a sacrifice that may provide a significant boost to your nest egg. The median home sales price in the US was $374,900 in 2021.
If you have more space than necessary, you may want to consider selling your home, moving into a smaller place, and saving the profit for your retirement.
Cut Down on Minor Expenses
Start cutting down on minor expenses, such as streaming services and ordering takeout. These expenses add up quickly. Make a list of all your current expenses to get a better idea of where you can start cutting.
Along with these suggestions, continue to monitor your savings and gradually whittle away your spending to save more for retirement.