How $10 could save your retirement

Let's do more math

For many people and families, I suspect, $40 a month is a savings goal within reach. Many might even be able to increase their savings to $50 a month, or $10 every six days, which would yield more than $70,000 in 30 years.

Bump your savings to $100 a month -- $10 every three days, or about $3.33 per day -- and you're looking at more than $140,000. That is a huge cushion in retirement.

The question then becomes, where do you get your $10 increments?

"You basically have to defer consumption," says Steven Blakely, an editor and communications director at the Employee Benefit Research Institute.

But that, he adds, is only part one.

"The question is, if you do manage to defer consumption, can you then save (the money)?"

To which I would answer: Yes, and here's how. Try any of these savings steps, starting today, and send me flowers when the $10 revival plan starts to work and you realize you won't die broke.

Here are the rules: The key is to pick at least one way you can immediately save $10 this month. If you pick more than one, that's great. But for each $10 you save, you have to:

• Put $10 in an envelope and deposit the money in your bank at the end of the month. (No cheating!)

• Write a check for $10, put that in an envelope, and deposit it.

• Or set up an automatic transfer right now for $10 to be zapped into your savings account each week or month or three days or whatever. (If you don't have a savings account, you can set one up online right now.)

Yes, you can save $10

How easy are these?

• Cut $10 out of your monthly grocery budget. (Give up two nights of chicken and you'll save at least that.)

• Slice $10 out of your vices for the month (cigarettes, alcohol, magazines, music downloads, ice cream, pay-per-view TV).

• Use $10 less in electricity. (If you can raise your arm to turn off the light or adjust the thermostat, you can do this.)

• Drive $10 less. (That's about three gallons or 75 miles, assuming 25 mpg, on my car.)

• Bring lunch to work twice a week. (Leftovers are free.)

• Avoid buying breakfast, coffee, soda and snacks. (Or just be good for one day and you'll save $10.)

• Ditch monthly charges and subscriptions you never use. (Do you need Netflix? OK, but do you need premium cable, too?)

• Cut back on paper products (tissues, wipes, paper towels).

• Never use out-of-network ATMs, usually $3 to $5 per withdrawal. (See "Leave your ATM card at home.")

And if, God forbid, you find yourself resisting the idea of taking just one of these simple, mindless steps that will cost you barely any effort whatsoever, just remind your shortsighted self: This is worth $15,000!

Published April 30, 2008

< previous |  1 | 2 |