Saving for Investment When There’s Little to Spare
The way to financial security, some experts tell us, is to invest in top-performing stock mutual funds. “That’s great,” you might say, “but where will my investment funds come from? We can barely pay the bills.”
Don’t give up on saving just because money is tight. There are dozens of ways to save up to $200 a month, by simply giving up a few luxury items. Here are a few suggestions to get you started thinking about saving.
If both spouses work, child care may be eating up one of those incomes. After taxes, transportation, a work wardrobe and day care are paid, is there enough of that second paycheck left for it to be worth it?
A two-pack-a-day smoker can save $240 a month by kicking the habit, assuming cigarettes cost $4 a pack.
For a special evening, check out videos from the library and cook a favorite meal. A couple who foregoes going out to dinner and a movie once a week can easily save up to $200 per month.
Instead of spending $50 to $100 a month on a health club membership, exercise outdoors.
Doing without a few luxuries is not painless, but it gives you that extra money needed to save for your future. Once you’ve freed up some funds for savings, put it on auto pilot. Increase your contributions to your 401(k) plan or save another way using direct deposit.
Investing small amounts of money at an early age can produce a much larger nest egg than saving large amounts, even at relatively high rates of return, later in life.