It’s not always easy to save for retirement. After all, 60% of Americans live paycheck to paycheck per LendingClub, which means little extra is available for building a nest egg. But any extra you can set aside will pay off in retirement — and possibly change your life before you retire.
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Surprisingly, an extra $1,000 a month in savings may be right in front of you. Here are five ways you might be able to save more money:
It all starts with a budget
The first step in determining how you might be able to save an extra $1,000 a month is to examine your spending and then make a budget. By itemizing all your expenses, you can get a better idea of where you might be able to comfortably cut back. Setting up a sustainable budget can keep you on track and help reduce unnecessary and impulse purchases.
Take a bite out of your food expenses
Food is the third-largest expense for U.S. households (after housing and transportation), according to the latest consumer expenditure data from the Bureau of Labor Statistics. It’s also an area where you may be able to reap some big savings.
The average amount American households spend on “food away from home" is more than $3,500 a year. Most of us know the cost of that morning coffee we grab on the way to work adds up, but it’s also likely a small luxury we’d like to keep. One way to save is to grab a coffee, but skip the pastry you’re grabbing with it ― and try to pack a lunch for work.
Plan and prep your meals for the week if you can. Make it a habit to go grocery shopping ahead of time so you’re less tempted to grab takeout on the way home. Don’t neglect to check flyers for your local grocery store to take advantage of what’s on sale, and consider adhering to the old-fashioned — but effective — practice of using coupons whenever you can.
Put the brakes on your transportation expenses
While food is a major cost, transportation takes second place as the largest expense for American households. Some people might be paying too much for a vehicle — or paying for a fancier vehicle than they really need.