“If you kick in a measly $20 a week to your retirement account, you'll end up with an extra $173,000 forty years later, if your investments grow an average 6% a year compounded quarterly.”
A little extra belt-tightening on your part doesn’t necessitate any miracles from the market. Research shows that large-cap stocks averaged a 10.09% gain from 1926 through May 31 of this year, and small-cap stocks averaged better than 12% a year. These gains weathered through catastrophes like the Great Depression, World War II, the Crash of '87, the Tech Bubble and the Great Recession.
But investors.com says, in its recent article, “How To Turn A Glass Of Wine Into A $173,000 Bump In Your IRA,” that the hard part for most of us is taking action and putting the money to work. Some say it’s impossible to save even a modest sum like $20 a week. Here are some practical examples of straightforward ways to cut spending and save $20 or much more per week, which lets you put that savings into your investments, like an IRA, where the earnings grow tax-deferred.
Supermarket membership or discount card. These are free from many grocery chains, the exception being club stores like Costco, which charges approximately $60 each year. The weekly discount can look like about $30 on a $100 weekly bill or a yearly saving of $1,560.
Personal care from a local training school. A local cosmetology school that teaches beauticians always needs customers. This means sizable discounts, or even free haircuts, manicures or massages. For example, a $44 service charge may be cut to $12 on average, saving you $32. If you need that service quarterly, the annual savings would be $128.
DIY dry cleaning. The cost of an alternative product like Dryel is about $2.00 for eight garments, which would save you nearly $30.00 on what would otherwise be a $32 dry cleaning bill. That’s about $330 a year in savings. How does it work? Clothes go with a Dryel cloth into a special bag that comes with it into your clothes dryer. The heat releases a cleaning solution from the cloth.
Uber or Lyft and not a taxi. These cab alternatives can cost 40% less than traditional taxis. See a traditional taxi vs. Uber/Lyft forecast of your fare at whatsthefare.com. If you save 40% of a $50 fare with a traditional taxi once a week, your cost would be only $20. Your yearly savings would be $1,560.
Takeout dinner. We all love our favorite dinner from our favorite restaurant. However, one way to slash that dinner check is to order the entrees to go. If a couple normally has two glasses of wine each at a cost of $10.50 per glass, they can normally buy the same bottle on wine.com for $12.99 and save $29.01 on their Friday night dinner.
Reference: investors.com (June 15, 2017) “How To Turn A Glass Of Wine Into A $173,000 Bump In Your IRA”