10 Ways to Tighten Your Belt to Feed Your Retirement Plan

Money is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Brian Spero is a contributor for Money Crashers Personal Finance, where he writes about topics including smart shopping, retirement, budgeting, and getting out of debt.

When it comes to saving for retirement, sometimes you can do everything right and still end up short of your goals. You work hard, start saving early, and invest diligently in your retirement fund. But whether your portfolio has taken a hit or your finances have, setting aside enough money can be extremely daunting.

Fortunately, a little really does go a long way when you have years until retirement. While one of these tips could save you between $50 and $100 per month, if you manage to implement them all, you can save as much as $5,724 a year. Invest that amount annually in a tax deferred account earning 7%, and it will grow to a healthy $540,693 in 30 years.

1. Shop Specials
As more people look for ways to reduce their spending, much attention has been paid to using coupons for groceries and household supplies. While some take it to the extreme, devoting enormous amounts of time to tracking sales and doubling up on coupons, everyone can benefit from this tried and true method of saving.

For many families, joining a membership warehouse store such as Costco (NYSE: COST) is another way to find blockbuster deals on a diverse range of products for buying in bulk. A testament to its effectiveness as part of a savings strategy, Costco has been a hit with the public since launching in the 1980s, and has proven its staying power by performing at +27.53% over the last 12 months.

2. Skip Eating Out
Did you know that the amount of elderly people who go hungry on a regular basis is rising at an alarming rate? By deciding to eat out (or buy expensive take-out) just one less time per month, you will have more money to draw from when you are no longer working - and might even be a little healthier.

A conservative estimate for dinner for two is about $40 at popular family chain restaurants like Olive Garden, Red Lobster, or LongHorn Steakhouse, part of Darden Restaurants (NYSE: DRI), compared to about $15 at home. DRI rang up nearly $8 billion in sales in 2012. Get your piece of the pie by eating at home and investing the difference.

3. Drive Less
With the median price of gas recently reported at $3.70 a gallon, it costs somewhere north of $50 to fill up the typical automobile. Strive to save by opting for a walk in the woods over a ride in the country, by biking instead of driving, or by carpooling. Filling up one less time per month could mean an extra $600 a year for your IRA or 401k, or the difference between being able to afford a car and having to take the bus as a senior citizen.

4. Reduce Home Entertainment
Are a couple of extra movies a month or a few more cable channels worth having to work after retirement? Consider dropping premium channels or your entire cable package, and see if you can get by with a subscription to Amazon Prime, Netflix, or Hulu Plus.

The middle-of-the-road digital package from DirectTV costs $39.99 a month (NASDAQ: DTV) (on special for new subscribers), while instant download from Netflix (NASDAQ: NFLX) with unlimited movies and TV shows is just $7.99. Plus, if you are already paying for an Internet connection, you can find most TV shows and tons of other entertaining content for free online,  making it easy to adjust while saving $284 annually to invest long-term.

5. Pare Down
The modern trend is that as you get older you reduce the size of your home, which means less room for all the things you own. But by also selling possessions of value, be it a second set of golf clubs or a vintage automobile, you can start to get lean earlier, and not only bring in money to build the nest egg, but also save on storage and moving costs.

How much could you generate from selling a few quality items online or at a garage sale? Think about it: $150 from selling items each year could turn into almost $18,000 if you did it for 30 years and annually earned 7%. A variation on this same theme is to regularly donate items to charity and deduct them on your taxes - the higher tax bracket you're in, the more effective this strategy is.

6. Extra Income
While taking on a second job might not be the most attractive option, one foolproof method to increased savings is to earn a bit more per month. Take advantage of the things you are good at and love to do. Whether it's tinkering with electronics, tutoring math, or caring for children, use your talents to garner extra income to put away for your future.

According to recent reports, babysitters make on average $10 an hour (very reasonable in most areas), so if you are able to secure just five hours a week at this rate, you can add $2,600 of income annually to devote to your retirement plan.

7. Indulge Responsibly
In this country, we are too often overwhelmed by pervasive advertising that sells you a bill of goods that rarely delivers. Whether you are a wine connoisseur or just a sucker for a nice pair of shoes, it's time to hone your ability to sniff out equally satisfying products for a fraction of the price of the over-marketed, "high-end" stuff.

Look for retailers or distributors through which you can get the same high-end products without the high price tag. T.J. Maxx (NYSE: TJX), which includes Marshall's and HomeGoods, has made a multi-billion dollar industry by providing deeply discounted apparel and home fashions to deal-hungry shoppers over the  past few decades.

8. Use Your Home
Why do many of us pour nearly all of our resources into securing and perfecting a beautiful place to live, only to leave it empty so often? If you can move your office into the home, entertain around the house instead of going out, or even just put your kitchen to better use, you can save anywhere from a few extra bucks to thousands more per year to funnel away for retirement.

Instead of taking a weekend car trip to a nearby city, plan a "staycation," where you stay local while living it up by visiting nearby sites, cooking delicious food at home, or having friends over for a movie night. Saving on the price of a tank of gas and two nights in a reasonable motel room once a year will net you at least $200 to add to your fund.

9. Go Green
Being environmentally conscious is thankfully catching on, which not only makes for a more sustainable future, but can lead to a reduction in spending. Try filtering or distilling water at home instead of buying bottles. Unplug electronics when not in use, buy higher-efficiency kitchen appliances, and consider switching to a hybrid automobile.

Driving a Toyota Prius that gets around 50 miles per gallon as opposed to a similarly priced model that registers a respectable 30 miles per gallon saves $700 a year, based on driving the national 2011 average of 15,000 miles at $3.50 per gallon gas. Cut that amount in half to be conservative, throw in $200 for being more energy-efficient at home, and you are still looking at an estimated annual savings of $550.

10. Stick to a Budget
The process of creating a personal budget to live by can be one of the most eye-opening financial lessons you'll ever receive. It forces you to account for all of your expenses, calculate your true expendable income, and make any hard decisions necessary to ensure you have more money coming in than going out. Not only does it expose areas that you are devoting inordinate or unrealistic resources to, but it gives you a plan to live by.

With a budget in-hand built on indisputable facts, you'll never again utter the question, "Can we afford this?" Purchasing decisions become based on sober realities. Review your budget line-by-line to reduce spending by as little as $20 a month, which translates to an annual contribution of $240. Continued at 7% over 30 years equals an extra $22,670 to live on later.

Final Thoughts
Planning for retirement is something that every American needs to take seriously and become proactive about. By taking a comprehensive look at your spending from top to bottom, you can find a myriad of small ways to tighten your belt that collectively add up to big savings. And you can implement most or all of them without feeling too constrained by your budget.

What other ways can you suggest to spend less and save more?


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