Saving for retirement is hard enough as it is -- let's be honest, nobody wants to sock away money that you know you won't see for decades -- but it's even harder if you don't have much extra cash to begin with.

In this situation, you don't necessarily have to work harder -- you have to save smarter. Of course, if you're forced to decide between putting food on the table or saving for retirement, you don't have much of a choice. But even if you only have a few extra dollars at the end of the week, that money -- saved wisely -- can add up over time.

Man with empty wallet

Image source: Getty Images

Make the most of your 401(k)

When it comes to saving for retirement, you have plenty of options as to where you put your money, between IRAs, 401(k)s, or even under your mattress (though that option is generally not recommended). The best place to start is usually your 401(k) through your employer.

401(k) plans are great for several reasons, namely that they allow you to transfer pre-tax dollars straight from your paycheck into your retirement fund (helping you resist the urge to spend that money first), and you can take advantage of your employer match. However, two-thirds of Americans don't contribute anything at all to their employer 401(k) plans, according to the U.S. Census Bureau.

That can become a costly mistake, because even a few dollars here and there can snowball into a solid nest egg over time.

Say, for example, you're contributing $10 per week to your 401(k) and your employer will match 100% of your contributions up to 3% of your salary. If you're earning, say, $30,000 annually, that means your employer will match up to $900 per year.

If you were to continue contributing $10 per week (or $520 per year), your employer matched that $520 per year (making a total yearly contribution of $1,040), and we assume an annual rate of return of 7%, here's what your savings would look like over 10, 20, and 40 years:

Years Total Amount Saved
0 (Today) $1,040
10 $17,421
20 $49,644
40 $237,727

In other words, what amounts to roughly two lattes or one dinner out per week can ultimately become nearly a quarter of a million dollars over a lifetime, so every dollar really does count.

Beware of hidden fees

Once you do start utilizing your 401(k), your work's not done yet. Hidden fees can take a huge bite out of your retirement fund, and yet most people aren't even aware of how much they're paying in fees -- in fact, 67% of Americans erroneously believe they're not paying any fees at all.

Fees are a given in any retirement account, so there's no way you can eliminate them completely. But by being aware of how much you're paying in fees, you can save thousands.

For example, say you've been contributing $2,000 a year to your 401(k), are earning an annual rate of return of 7%, and are paying 2% per year in fees. After 40 years, you'll have about $253,000 saved. If you had only been paying 1% in fees, though, you'd have roughly $328,000 in your retirement fund, and that 1% different would end up costing you around $75,000.

So how do you go about lowering your fees? The first step is to find out how much you're paying. Talk to your 401(k) plan administrator to learn about the different types of fees you're incurring. These can include administrative fees (which cover basic upkeep costs), service fees (involving extra services you can take advantage of, such as taking a loan from your 401(k)), and investment fees (related to managing your assets).

The average expense ratio (which covers annual operating expenses) among 401(k) plans is 1.31%, according to a 2016 Investment Company Institute study, so if your plan's ratio is significantly higher, it may be beneficial to talk with your plan administrator about shifting your savings to another investment option within your plan.

Boost your savings over time

After you've started contributing regularly to your 401(k) and have your fees under control, it's time to build up your contribution amounts.

The median percentage of income 401(k) participants contributed in 2016 was around 10%, according to a Vanguard study, which includes employee and employer contributions. While it's easy to get complacent or forget to up your contribution percentage as you earn raises or shift to higher-paying jobs, those extra contributions add up quickly.

For example, say you're currently earning $30,000 per year and are contributing 4% of your income. Let's also assume you're earning a 7% annual rate of return and that your employer will match 100% of your contributions up to 3% of your salary. That means you're contributing $1,200 per year, and your employer is contributing an extra $900 per year. After 20 years, assuming you don't increase your contribution percentage, you'll have saved just over $92,000.

Now say that instead of contributing just 4% over those 20 years, you increase your percentage to 6% after 10 years and then 10% five years after that -- still earning that 3% match from your employer. After 20 years, you'll have about $108,000. You don't have to get a massive raise to increase your saving -- simply boosting your contributions by a couple hundred dollars every few years can also have a lasting impact.

Saving is hard no matter how much money you make, but it's especially difficult if you're short on cash. That's no excuse not to save, though. By taking baby steps and contributing what you can, you'll be on your way to building a healthy retirement fund.

The Motley Fool has a disclosure policy.