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Small Changes Add Up for Big Retirement Savings Impact

MP900404926“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.”

Do the math and you’ll see how quickly it all adds up. Making a small change, like bringing your own bottle or having dessert at home doesn’t require interest rates to jump or the market to take a leap. An additional $20 in your retirement account every week for 40 years gives you a $173,000 bump—and that doesn’t include the savings from brewing your own morning coffee instead of spending $5 a day on fancy lattes and cappuccinos.

But 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 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.

Dining costs can be controlled. Who doesn’t enjoy going out to dinner? But there are a number of ways to cut that bill. One, is to order your entrées to go. Bring your own bottle to spare yourself the wine markup. Even the corkage fee will be less than the price of a bottle. If you do dine at the restaurant, have dessert at home.

Reference: (June 15, 2017) “How To Turn A Glass Of Wine Into A $173,000 Bump In Your IRA”