Between paying off credit card debt, student loans, mortgages and other bills, saving for retirement might be on the back burner – but it shouldn’t be! Below, financial adviser and LearnVest CEO Alexa Von Tobel shares her tips to help you save for retirement at any age.
How to Save in Your 20s on a Tight Budget
Most people in their 20s don’t have a huge salary, so socking away money for retirement might seem impossible – but it’s not! Just follow the $5 rule: for every $5 bill in your possession, don’t spend it! Put it away (you won’t miss it) and at the end of the year you’ll have saved a few hundred dollars toward retirement. Alexa also recommends following this simple formula to find out how much extra cash you have to spend each week: Fixed – Goals = Extra $ / 4 = Cash Allowance Per Week. She explains more about it in the video.
Did you know the average family has $9,000 in credit card debt? If you have credit card debt, Alexa says it’s nothing to be ashamed of. To combat it, she recommends going on a cash diet and freezing your cards – literally! Freeze them in a brick of ice and start paying for everything with cash. “When you physically have to part with cash you are more emotional, you spend less,” explains Alexa. Another tip is to make a second payment on your credit card in the middle of the month when you get your next paycheck. Watch the video to hear more tips about paying off student loans and splitting finances in a marriage.
Should You Contribute to Retirement or Your Child’s College Fund in Your 40s?
Many parents in their 40s are faced with the difficult decision of either contributing to their retirement or their child’s college fund. Alexa’s answer may surprise you – watch the video to hear what she has to say. Her final tip: you should have about 20x your salary in retirement – every little bit adds up!