$100 a month: Save to give yourself a raise

Younger man learning how to budget and save more money.

Small spending adjustments can add up to a big boost in your monthly savings.

In fact, putting aside just $100 a month can make a big difference, especially if you invest it for your retirement. Really: Invested for 20 years or more at a 7% rate of return, that $100 a month could ultimately grow to more than $52,000.*

Consider using these simple, practical strategies to put your savings on the right track.

Shift your habits to start saving

1. Track your spending.

Pretty Mbanga-Nembaware, mother of 5 and a service coordinator at an automobile dealership in Plano, TX, used a monthly budget worksheet and was able to save more than $600 a month. Once she began carefully tracking her family's spending, it was clear they were going overboard on lunches and movie outings.

Now, instead of spending $80 on movie tickets and concessions, the family rents movies and watches them at home. Says Mbanga-Nembaware, "With that worksheet, I ask myself, 'Do I really need this?' and I compare how much I'm saving each month."

2. Rethink mealtime.

The average American spends thousands of dollars on dining out every year.  Mbanga-Nembaware's family has cut back on restaurant meals and now enjoys eating at home more often.

They also pay more attention to portion sizes, wasting less food. "We started getting more canned foods, because the portions are just enough for the meal," she says.

3. Automate your savings.

If your paycheck burns a hole in your pocket, consider creating a savings account that's funded with automatic withdrawals, says Joe Swanson, a Minneapolis-based financial professional with Principal®.

That could be as simple as setting up a monthly automated transfer from your checking account to your savings account. Some organizations also let you automatically deposit money directly from your paycheck into an investment account.

And remember to take advantage of salary-deferral contributions to your organization's retirement plan, such as a 401(k) or 403(b).

4. Be accountable.

Writing down your financial goals and sharing them with others makes those goals more concrete.

Ask your spouse, a friend, or your financial professional to check in with you at determined intervals (a few times a year, annually, or every few years) to ask if you're on track.

What about retirement?

Saving an extra $100 a month is terrific. But how much of your income should you be saving for retirement?

First, it's important to consider your goals and what your expenses may be in retirement. Consider building up to 15% of your salary for retirement, then dedicating additional savings to creating an emergency fund of 6 to 12 months’ worth of pay.

It’s not always easy, but you’ll spend the rest of your life enjoying the benefits of good savings habits today—not worrying about playing catch-up.

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*The assumed rate of return in this example is hypothetical and does not guarantee any future returns nor represent the returns of any particular investment. Amounts shown do not reflect the impact of taxes on pre-tax distributions. Individual taxpayer circumstances may vary. This is for illustrative purposes only.