You've probably thought, 'yeah, I should probably save more.' But eking out an existence is tough on a starting salary and sometimes comfort takes precedence over cutting corners. Besides, if you can only save $50 or $100 a month, is it really worth it? The answer: absolutely.
By starting to save now, you're giving your money -- however little it is -- time to grow on its own. The magic of compound interest means that you can contribute less money for fewer years if you start when you're young and still end up with more cash than someone who waits.
For example, if Natasha starts saving or investing when she's 25 and saves $100 a month for ten years then lets the money sit, her stash will grow to $174,928 by the time she turns 65 (assuming an 8% annual return). If Anna waits to until age 35 to start saving, and socks away the same $100 a month for the next 30 years, she'll have only $135,940 by 65. Anna will have contributed three times as much as Natasha, but will end up with nearly $39,000 less. (See why you should start saving now.)
Think you don't have enough money to save? We've compiled a list of our best tips to find extra money in your budget to sock away. These strategies won't require you to take a vow of poverty -- we know money's tight already. Rather, they're small and simple cost-cutters that'll help you get started saving as soon as possible.
1. Give yourself a raise and bank it. Boost your take-home pay by adjusting your tax-withholding and have the difference in pay automatically transferred to an online savings account. Kiplinger's tax-withholding calculator can help you revise your W-4.
2. Enroll in a 401(k). If your employer offers a 50-cent match for every dollar you contribute, even adding $60 a month will net you over a grand a year. Plus, you defer paying taxes on your contributions, so they take a smaller bite out of your paycheck. See how even small amounts can add up.
3. Raise your car insurance deductible. Upping your out-of-pocket outlay from $250 to $1,000 can save you 15% or more off your premium. Learn more about how to save money on your car insurance.
4. Pay off your credit card. Carrying a $1,000 balance at 18% blows $180 every year on interest that you could put to better use elsewhere.
5. Go green. Control energy costs with a programmable thermostat. Prices start around $50, but you'll cut your heating-and-cooling bill by 10-20%. For more energy-saving tips, see 12 Ways to Save Money by Going Green.
6. Bundle up. You may be able to save by getting a package of phone, Internet and cable from one provider.
7. Use your employer's FSA. Flexible spending accounts let you pay healthcare costs with pre-tax dollars. If your company offers them, take advantage and save 33% or more. See Take Advantage of Tax-Deferred Accounts for help.
8. Get a credit card with rewards. Spending $80 a week on gas and groceries? Putting it on a card with 5% cash rebates will earn you nearly $200 a year. Learn how to get the right card for you.