Like most of us, you may someday want to enjoy a comfortable retirement. Your ability to achieve this goal will depend on how much you save — but it also matters how much you spend.
And saving and spending are certainly related: The more you can reduce your spending, the more money you could have available to save for retirement through your IRA and your 401(k) or other employer-sponsored retirement plan. Over many years, even relatively small amounts diverted from spending to saving and investing could add up substantially.
How can you go about potentially reducing your spending? Here are a few suggestions: Use a budgeting tool. If you’re not already doing so, you might want to consider using a free online budgeting tool. Among other capabilities, these apps can place your spending in categories — groceries, travel, entertainment, and so on — which can reveal redundancies that, once eliminated, could save you money. For example, you might find that you’re spending a not-insignificant amount on streaming services you rarely use. Or you might be surprised at how often you go the grocery store, rather than consolidating your visits and reducing the likelihood of “impulse” purchases.
