The words 'retirement savings' can immediately bring about images of sacrifice - giving up the small pleasures in life now for something that might seem a long way down the line. But it doesn't have to be that way.
By making a few smart changes now you could save a lot more without putting the brakes on your current lifestyle. It could make all the difference in enjoying a better lifestyle later.
To help get you started on saving more for your retirement, here are a few useful savings tips. It's easier than you think:
1. Purchases – do you really need a TV screen as large as a small country? Can you live with a mobile that isn't the latest iPhone 6? By not upgrading when you don't really need to, you can save hundreds at a time. Remember to buy what you can afford – don't pay it with your credit card if you can't pay it off.
2. Household bills – look for easy savings – given the use of mobile phones now and free wifi, do you even need a landline anymore? Ask your electricity provider for a discount or shop around. When getting your groceries only buy what you need – make a dinner list. Another good idea is to set up a separate bills account that you can automatically direct the right amount of your pay into as soon as you've been paid.
3. Daily expenses – try making your lunch. Just $10 a day spent on lunch can add up to over$2,500 a year. Even if a homemade lunch costs half of what you spend you've saved over $1,000 in a year. Given we work for about 40 years that can add up.
4. Transport – a lot of households have two cars, but how much are you really using the second car? If you're parking in town for work, is it cheaper to take the bus or bike? If you can swing it and don't need a second car you can save thousands.
5. Insurance – why not combine your various insurance policies to get a discount? Many insurance providers such as AMP provide a discount if you combine two or three of your car, house and contents policies.
The key to all this sounds really simple. And it is. Save your savings.
One of the most common mistakes people make is that they don't keep what they save. They'll cut back in certain areas but the money saved is never put to one side and is often left in the daily account where it will get used up, and usually on something not that important.
You don't have to do all of the above to make a big difference. If you've gone to the trouble of saving money then make sure that what you would've spent gets put away into a retirement or long-term savings fund.
You can then make those savings work for you and grow to a much larger number over time. Taking what you save and investing it in the right way can provide a great addition to your existing retirement savings, such as KiwiSaver.
If you're not sure how to go about investing your savings, then try talking to a qualified professional such as a financial adviser. They’ll be able to ask you the right questions and help you reach your financial goals.
Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice before making an investment decision.