When it comes to setting a retirement budget, the earlier you start, the more you will be thanking yourself later down the road. This is because the earlier you start, the easier it is for compounding interest to take hold and have your money make more money.
But not everyone can follow the advice of those that are making millions every month. Setting up a retirement budget when you're low on money can be difficult.
Here is our guide to saving money for retirement even if you are low on money.
1. Look Into Your Job's 401(k)
Many companies offer a 401(k), which is a retirement account that you can contribute money to pre-taxed. The benefit of going through your job is that often they will match your contributions up to a certain amount.
This means if you choose to contribute 3% of your paycheck towards your retirement savings, then the company will match that 3% contributed. It is essentially like receiving money for thinking about your future self.
2. Consider Moving Locations
Another big money pit is the cost of living. Even when we secure good jobs, this does not mean that rent or housing in that area is going to be affordable.
Look into moving away from big metro areas that have high costs of living. Even if this means putting a little bit more time into your commute, the savings may be worth it.
Also, look into taking advantage of public transport where it is available. This often takes a lot of the stress out of what the traffic is going to be like throughout the day and is often cheaper in the long run.
3. Buy and Sell With Second Hand Items
People often look at thrift stores or consignment shops with ill feelings, but the truth is that often these places will provide a lot of name brand clothes for extremely cheap. There are even instances where you can find items with the original tag still on them.
Don't just look to donate old items either. If people will buy items from these places, be sure to list your items for sale. You can use websites like Craigslist or apps like Depop. Saving for retirement can start with the money you make from these sales.
4. Live Within Your Means
While this goes without saying, living within your means is just as important as anything else. A watch still tells time whether you won it at an arcade or bought it fresh off the shelf.
Consider places where you are overspending unnecessarily. This means cutting out having food delivered in favor of going to pick it up.
Setting a Retirement Budget Doesn't Have to Be Hard
Creating a retirement budget starts with understanding what money you are working with already. Be on the lookout for extra cash when possible and take advantage of the retirement options that many companies provide.
If you want to learn more about staying frugal with finances or business, be sure to check out the rest of our blog. If you know someone that could use some help saving for retirement, be sure to share this retirement budget planning article with them.
