It's remarkably simple to retire with a comfortable nest egg. All you really have to do is save regularly throughout your working career, invest those savings reasonably well, and let compounding and time work their magic on your behalf.
It may be simple, but that doesn't make it easy. Life gets in the way, and other, more immediate priorities tend to take precedence over what starts out as a very long-term goal with very few near-term benefits. Still, the path to a comfortable retirement is simpler the earlier you get started on it, which makes saving money an important priority. If you want to jump-start your savings, you can follow these six money-saving tricks that actually work.
1. Make it automatic
If your employer offers a 401(k), 403(b), TSP, or similar retirement plan, it can be one of the absolute best ways for you to save money. Key to what makes it so awesome is the fact that you can sign up to have your contribution automatically taken from your paycheck, so you never actually see the cash.
When you never see the money, you get far less tempted to spend it on things you don't actually need. Often, it's not the big things like rent and the electric bill that get in the way of savings, but rather a series of small, unchecked expenses that you don't really think about as long as the money is there. If the money is invested before you ever see it, that temptation gets lessened significantly.
2. Treat savings like a high-priority bill
If you can't get money taken straight out of your paycheck or if you want to go above and beyond what you can save through work, you can treat your savings like it's a high-priority bill. Every payday, manually move money to your savings or investment account or schedule an automatic transfer for it to happen on your behalf.
By making it a priority to save money each payday, you will get that cash "out of sight" of your normal cash flow accounts before you have a chance to spend it. While the temptation may still be there to not make that transfer, every time you go through with it, you boost your nest egg.
3. Bank your tax refund -- twice
The IRS processed over 111 million refunds in 2018, worth an average of $2,899. That's a lot of people getting their own money back, after having lent it out to Uncle Sam interest-free. If you're among those receiving a refund, that check becomes a very easy candidate for your savings. After all, you lived without spending that money throughout the year, so socking it away gives you a boost to your savings with absolutely no additional impact to your day-to-day lifestyle.
That allows you to save the money once. What then allows you to save it the second time is that you can adjust your withholdings to get your next year's refund closer to $0. That adjustment puts more money in your pocket today -- money you can also save easily without feeling the impact to your everyday lifestyle.
4. Save half your raises
If you were covering your costs on your old salary, then it should be even easier to cover your costs on a new, larger salary after a raise. That makes saving a portion of your raises one of the most straightforward things you can do to improve your ability to sock away money.
Still, a higher salary typically brings with it higher total taxes, and inflation really does eat away at your purchasing power over time. As a result, looking to save half your raises gives you both cash with which to pay your increased taxes and some wiggle room to either fight inflation or to improve your lifestyle. That makes it a much more achievable -- and thereby workable -- tip than trying to save your entire raise.
5. Snowball your debts away
Debt is typically one of the biggest barriers keeping most people from saving money for their futures. With very few exceptions (like perhaps a mortgage), you'll want to focus your efforts on eliminating your debts before worrying too much about saving money. Not only is your return on investment often larger and more certain by paying off debts than it is by saving money, but once your debts are gone, more of your cash flow frees up to allow you to save.
To snowball your debts, line them up in order from highest interest rate to lowest interest rate. Pay the bare minimums on all your debts except the one with the highest interest rate. On that one, pay as much as you can above and beyond the minimum until it's completely paid off. Then, repeat the process with the next debt in line, and keep it up until all your expensive debts are paid off. Once you reach that point, you'll have far more cash available to save for your future priorities.
6. Pick up overtime or a side hustle
If you're willing and able to put in the extra effort, working overtime at your job or picking up another one on the side can be a great way to earn some extra cash. This can help you save money in two ways. First, the money you earn above and beyond what you need to cover the costs of working that extra bit can be available for your savings. Second, while you're actively working, you'll be generally less tempted to be spending money at the exact same time.
In addition, if your boss appreciates the extra effort and results associated with your overtime, it may open you up to future advancement opportunities at your day job, thus boosting your everyday salary. On the flip side, your side hustle may very well evolve into a new career for you, particularly if you're able to make money in a field that is closely aligned with your personal interests.
Whatever path you take, the sooner you get started, the better
Regardless of which of these six tips you put to use -- or if you come up with others on your own -- the sooner you get started saving more money, the better your chances of building a decent nest egg. So get started now, and make 2019 the year you turn the corner in your quest to get your money to work for you.