Saving more requires plan to reduce waste


A California reader wants to know the nitty-gritty of savings:

I don't plan on retiring. I don't have enough money saved and believe retirement is the path to early death (too much time with nothing to do).

We all know we aren't saving enough even though we deny it. We may feel guilty and may wish we could save, but there simply isn't enough income. OK, there is a way to do it but few of us are prepared for the sacrifices. Your columns need to focus on how to save.

I'm all for keeping active and continuing to work in retirement. But retirement the way most baby boomers want it - a mix of part-time work for pay, volunteer work and travel, along with more time for hobbies and family, according to numerous studies - demands considerable savings. (I know because I live this kind of retirement.)

So the idea of continuing to work full-time past traditional retirement age "is at odds with many boomers' interests, values and priorities," said Sandra Timmermann, director of the MetLife Mature Market Institute.

Surveys by the Employee Benefit Research Institute have consistently found that 40 percent of Americans quit work before they want to, mostly because of health problems or job cuts. Could you be one of them?

I also challenge your assumption that savings entail major "sacrifices." I believe many people could save all they need by cutting out waste in their lives.

Start by tracking down everything you spend for at least three months - and I mean everything. Then determine whether the expenditure was a) necessary, b) not necessary but worth it, c) an extravagance you could ill afford, or d) an outright waste.

To help you find the d's in your life, take a look in your closets, garage and elsewhere in your home for stuff you bought and never or rarely use. Then don't buy any more.

There are countless other ways to save (beyond the advice of funding retirement plans).

Here are a few:

If you have credit-card debt, make it a priority to pay it off, beginning with the card that charges the highest interest rate.

Don't throw gas money away. Combine trips, don't speed, avoid jack-rabbit starts and keep your tires properly inflated.

Cut out the soda, candy bars and other empty calories from vending machines. Most are bad for your health, too.

If you smoke, quit. You'll save on cigarettes, health care costs and life insurance.

Speaking of insurance, don't let a policy renew without shopping around with competitors.

If you can't bear to cut down on eating out, go out to lunch rather than dinner. Don't be shy about asking for doggie bags. (Most restaurant portions are too big anyway. Why throw out good food?)

For enrichment and entertainment, make frequent use of your public library's offerings, including books, DVDs and music CDs to check out, and free or low-cost clubs, classes and activities to join.

Cancel subscriptions to publications you don't read. Ditto for health-club memberships you don't use.

If you're a technophile, review the cost in time and money of acquiring (and keeping running) the electronic gadgets in your life.

Where is the "sacrifice" in any of this? You do have to make choices, as Kay Jones of Arizona and her then-5-year-old granddaughter, Tori, did when Jones took her to the movies for the first time a few years ago.

"I told her we had to pay to get into the movie, and we could buy popcorn and sodas, and all our money would be gone," Jones said. "We could also just see the movie and go out to a restaurant afterwards for pizza. Or we could just see the movie and go to the store, buy a pizza, soda and ice cream and rent another movie to watch at home."

Tori - a natural saver, it seems - chose the third option.

Now if we could just learn from her.

Humberto Cruz writes for Tribune Media Services.

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