2-Minute Money Manager: How Can I Find Money to Save for Retirement?

Woman Senior w Computer
Photo by fizkes / Shutterstock.com

Welcome to the “2-Minute Money Manager,” a short video feature answering money questions submitted by readers and viewers.

Today’s question is about retirement; specifically, how to put aside money for retirement if you’re barely making ends meet.

Watch the following video, and you’ll pick up some valuable info. Or, if you prefer, scroll down to read the full transcript and find out what I said.

You also can learn how to send in a question of your own below.

For more information, check out “5 Things Preventing You From Saving for Retirement — and What to Do About Them” and “Believe It: You Can Save $500,000 in 15 Years.” You can also go to the search at the top of this page, put in the word “retirement” and find plenty of information on just about everything relating to this topic.

And if you need anything from ideas on making extra money to help finding the best financial advice, be sure and visit our Solutions Center.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, and welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this answer is brought to you by Money Talks News, serving up the best in personal finance news and advice since 1991.

Today’s question comes from Aaron:

“You’re always saying we need to put money aside for retirement because Social Security won’t be enough. But how am I supposed to do that when I can barely make ends meet now?”

Over the 40 years I’ve been offering financial advice, I’ve met lots of Aarons: people who ask some version of “How am I supposed to save when I have more month than money?”

OK, let’s talk about that.

Reaching your goals, step by step

If you want to reach a goal, the first step is having one.

What’s a goal? A goal is something specific and clearly defined that you intend to accomplish by a certain date.

Another critical goal component? Desire. You’ve got to really want it.

Let’s use Aaron as an example and retirement savings as his goal.

Assume Aaron is 40 years old. He has a picture in his mind; something he really wants to achieve. Perhaps he’s decided he wants a retirement spent traveling the world. So, he creates a goal: Save $1 million by the time he reaches 67.

Now Aaron has a specific goal with a specific date. Problem is, it seems impossible to achieve. After all, Aaron wrote saying he can’t save anything. Now we’ve got him saving a million bucks.

Which brings us to step two: Breaking goals down into manageable chunks.

Using one of many available online calculators, we find that if Aaron can earn 10% annually on his savings — the stock market’s long-term average — he only needs to put aside $650 a month to end up with $1 million by age 67. That means he needs to save $150 a week, or about $21 a day.

See how this works? While $1 million sounds like a tough goal to reach, breaking it down into smaller chunks — like $20 a day –makes it appear more manageable.

Still, Aaron’s already said he’s having trouble making ends meet now. Where’s he going to find that $20? That will be the next step.

Tracking expenses

Reaching financial goals invariably means finding the money to do so. And that means tracking expenses and developing a spending plan.

Aaron can’t find his $20 a day until he knows exactly where his money is going now. To find out, he needs an expense-tracking tool, like You Need a Budget or Mint, that automatically tracks every dime he spends.

Once he knows where his money is going, he can make changes in an attempt to find his $20 a day. He can plug spending leaks. He can decide what’s important to him and stop spending on things that aren’t necessary. He can read articles like “11 Ways to Save on Entertainment,” “25 Ways to Spend Less on Food” and “13 Ways to Save Big Cash on Clothing” to learn how to spend less without reducing his quality of life.

If Aaron really wants to achieve his goal, he’ll analyze his expenses and find the extra cash to make it happen. Of course, it’s possible that no matter what he does, there’s simply no way to squeeze extra cash from his budget. As they say, you can’t get blood from a stone.

If that’s the case, then it’s time for the next step …

Making more

There are two ways to get richer: spend less or make more. If Aaron can’t find a way to spend less, his next step will be finding a way to make more.

Making more could be as simple as asking for a raise, or as complicated as getting an advanced degree. One advantage he has over the prior generations: Thanks to the internet, the possibilities for side gigs has never been greater. Articles like “107 Easy Ways to Make Extra Money Every Month” might help him find a little gain without a lot of pain.

The hardest step

The final step in achieving any goal is following through.

Whether it’s losing weight or gaining wealth, the path to success is generally clear. The hard part is following that path, day in and day out, for as many days, weeks, months and years as it takes to reach the finish line.

In Aaron’s case, he may have to keep on keeping on for 27 years. Of course, he can, and should, do what he can to make the path less rocky. For example, he could automate his savings plan by having money removed from every paycheck. He could radically reduce the amount he has to contribute by getting matching money on his employer’s 401(k). He may get raises along the way that could swell his savings and get him to his goal sooner.

But no matter what he does, reaching his goals will require perseverance. Without it, he’ll fail. Which is why it’s so important that any goal you choose is one you really want.

Hope that answers your question, Aaron!

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter, just as you would with any email in your inbox. If you’re not subscribed, fix that right now by clicking here. It’s free, only takes a few seconds, and will get you valuable information every day!

The questions I’m likeliest to answer are those that come from our members. You can learn how to become one here. Questions should also be of interest to other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and I’ve also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
20 Great Part-Time Jobs for Retirees
20 Great Part-Time Jobs for Retirees

Maybe you’re not ready to leave the workplace entirely.

8 Award-Winning Products That Impressed 40,000 Shoppers
8 Award-Winning Products That Impressed 40,000 Shoppers

The Product of the Year awards help shoppers find the best pet products, personal care items and everything in between.

12 Tech Gadgets That Make Daily Life Easier
12 Tech Gadgets That Make Daily Life Easier

These products on Amazon will ease worries and simplify your routine.

6 Types of People Who Can’t Count on Social Security
6 Types of People Who Can’t Count on Social Security

If you fall into one of these groups, don’t assume that you will receive benefits.

7 Things That Prove Cheaper Isn’t Always Better
7 Things That Prove Cheaper Isn’t Always Better

These purchases can end up costing you more if you try to go the cheap route.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Whether you resell it for a big profit or add it to your own wardrobe, this type of clothing is a hidden steal.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

Taking a Multivitamin? Here’s Why You Should Reconsider
Taking a Multivitamin? Here’s Why You Should Reconsider

A new study has bad news for the millions of Americans who spend money on multivitamins.

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

This Is America’s New Favorite Grocery Store
This Is America’s New Favorite Grocery Store

Consumers say a familiar name has become their go-to source of grocery items.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

Prepare to Pay More for These 31 Drugs in 2021
Prepare to Pay More for These 31 Drugs in 2021

More than 700 prescription medications have seen price hikes so far this year. Here’s a look at the worst.

5 States Lowering Taxes This Year — and 2 Raising Them
5 States Lowering Taxes This Year — and 2 Raising Them

State personal income tax rates, brackets and deductions just changed in these places.

The 10 Golden Rules of Becoming a Millionaire
The 10 Golden Rules of Becoming a Millionaire

I’m a millionaire several times over. I got here the same way you can — by following these simple steps.

11 Huge Retirement Costs That Are Often Overlooked
11 Huge Retirement Costs That Are Often Overlooked

Does your retirement budget account for all of these costs?

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.