When Should You Start Worrying About Retirement?

First of all, worrying about retirement (or anything else) isn’t healthy. We’re big advocates of thinking and planning, and the sooner you start doing both, the more secure you’ll be when you hit your golden years. We get it, though. A lot of us are living paycheck-to-paycheck, wondering if we’ll ever be able to retire.

Living On a Tight Budget? Here’s How to Prioritize Retirement Goals.

Are You Budgeting?

There’s no way to plan for retirement if you don’t understand your current budget — for two reasons. The first is that without a budget you can’t plan how much you may need to live on in the future. The second is you can’t really tell how far beyond your means you’re currently living.

Creating and following a budget is critical for those with retirement goals. After a couple of months of tracking your expenses and making line-item adjustments, you should be able to clearly see where you can cut back so that you can direct a little more to your IRAs, investment accounts and other savings ventures.

Debt Reduction and Retirement Savings

Those in debt tend to think they shouldn’t save for retirement at all, because they feel stretched thin already due to all the payments they’re covering. It’s important to prioritize your debt, but you still need to put at least a little bit into savings. Budget a small amount towards your savings and then direct the rest towards your debt. This strategy will save you on interest costs in the long run. As soon as you have reduced or eliminated your debt, increase your retirement contributions to the maximum allowable amount.

Finding More Money

The time to start looking for more opportunities to save is right now. We’re not saying you need to live like a pauper, either. The fact you’re on a tight budget doesn’t mean you don’t deserve a cup of coffee or a night out at the movies once in a while. You simply need to be mindful of how and when you are spending.

There are dozens of things you can do to cut back, all of which will add up. Consider trying some of the following to get you started:

• Do you budget for two movies a month? Cut it back to one. You deserve a night out, but cutting back is important to your financial future.
• Do you eat out once a week? Cut back to every other week.
• Really want to dine out or celebrate a special occasion? Go out to lunch instead of dinner. The menus tend to be cheaper.
• Don’t drink alcohol in restaurants. The mark-ups are outrageous, ranging up to 40 percent!
• Look for ways to reduce your costs. Switch internet/cable providers or cut out some of your services. You may even be able to call and negotiate your package rates.
• Getting a raise? Contribute the entire amount to your 401(k) and pretend it never existed.
• Save on energy costs by winterizing your home, unplugging electronics so they don’t leach power, saving on water and using a programmable thermostat. Even small changes to your utility usage can translate into big savings.
• Buy groceries, toiletries and other household items in bulk. The cost of a warehouse membership may result in significant savings.
• Plan your meals and commit to grocery shopping only once per week. This will help you cut back on impulse buys, significantly reducing your grocery budget.
• Run errands together instead of on separate days. Planning a route that allows you to hit all of your stops can reduce your mileage and help you save on gas.
• Use apps like GasBuddy to help you find the most affordable gas for your car.

Anything you can do to cut back and reduce your day-to-day spending will give you an opportunity to add more to your retirement savings. Make sure you regularly track your spending so you can make adjustments as you identify new trends. This method of saving may be slower than throwing huge amounts into your 401(k) or IRA, but it will ensure you have more to fall back on than Social Security alone.