5 Good Money Habits to Boost Your Retirement Savings

Saving for retirement poses some unique challenges: How are you supposed to prioritize retirement savings against the long list of more immediate goals? How are you supposed to find the motivation to prepare for something that’s decades away? How can you quantify the amount you will need to save when you have no idea what your future will look like?

The good news is that you can boost your retirement savings by practicing the same good money habits that apply to smaller savings goals.

1. Eliminate debt. No matter what your financial goals, this is the top priority. Think of it as creating the right environment for your savings to grow. Savings thrive when they have long stretches of uninterrupted time in which to accumulate and compound. It’s in your best interest to eliminate any obstacles that threaten those ideal saving conditions. Focus on paying off high-interest debt — the kind that sucks up money that could otherwise be going toward your goals. Credit card debt is an example. Revisit the terms of any loans and consider consolidation or refinancing. You might find a way to pay down your debt more efficiently and free up some extra funds for your savings goals at the same time. Eliminating debt also means having a healthy emergency fund in place, so that your savings doesn’t get wiped out by an unexpected job loss. A good starting point is three months’ worth of expenses.


2. Automate savings. So your emergency fund is set up and your debt management plan is in place. Now is a great time to see if there are ways to automate your savings. Can your employer automatically deduct your retirement contributions from your paycheck? Can you set up your online banking system to regularly transfer a certain amount to your savings account? Look for ways to make the act of saving easier, more consistent and less time-consuming.

3. Picture your goals. One of the reasons it’s hard to get motivated about saving for retirement is that it’s an abstract concept, especially when pitted against more attractive goals like “new car” or “tropical getaway.” Take 10 minutes today to design your ideal retirement: do you see yourself relaxing at the beach, or enjoying a beautiful home and watching your family grow? Do you want to pursue a passion or hobby after your working years? Does your ideal retirement mean indulging yourself, or would you prefer to downsize and keep things simple? Would you want to work part-time or in a different capacity after you retire? Do you imagine moving into a new space? A new city? A new country? Fleshing out the details of an otherwise ambiguous savings goal allows you to ground the goal in reality and remind you where you’re headed. It’s easier to contribute to a savings goal that holds real purpose.

4. Practice living with less. Increasing contributions to your savings goals often means decreasing your monthly spending. This doesn’t necessarily mean adopting a super-frugal lifestyle; however, if you want to get to your goal sooner, go for it! Create some monthly challenges, like a month of packed lunches, or a month of free weekend activities. Notice the impact of spending a little less, and see how much you can contribute toward your savings goals. If you live with a partner, challenge yourselves to live off of one income, and put the other toward savings. Spending a little less here and there does not require a complete lifestyle overhaul. Canceling a cable package “just because” is not an enticing idea – but what if you knew that canceling that investing that money would allow you to retire four years sooner? Having the right motivation can make it easier to save.

5. Increase savings along with income.  Try to maintain your current lifestyle and expenses even as your salary rises over time. As your income increases, increase the amount you contribute to your savings goals. It’s very easy to slip into a slightly larger lifestyle after a raise. It’s equally easy to treat unexpected income as “extra money,” whether it’s a bonus at work or $20 in a birthday card from Grandma. There’s nothing wrong with rewarding yourself from time to time, but saving more means having more in the future. More importantly, you’ll be better prepared should your income levels take a hit. Allow your savings to scale up with your income, instead of your expenses!

Developing these five habits can motivate you to find a few more dollars to put toward retirement. Even little changes can make a huge impact on a long-term savings goal. Choose a couple of tips to put into practice this month, and notice the impact they have on your budget, and on your financial peace of mind.


The good money habits outlined above will create a routine that motivates you to find a few more dollars to put toward retirement. Even little changes can make a huge impact on a long-term savings goal that has decades to compound and grow. Because time is on your side, there is a lot of value in prioritizing contributions (even small ones) to your savings goals now. Choose a couple of tips to put into practice this month, and notice the impact they have on your budget—and on your financial peace of mind.

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