If your ability to save for retirement isn’t exactly on track, you’re not alone. Financial planners often say you should set aside 10 to 15 percent of each paycheck for long-term investments, although few of us hit that benchmark.

Consider the fact that Americans in the 56 to 61 age bracket have a mean savings of just $163,577, according to the Economic Policy Institute. For most people that’s not nearly enough to live on throughout retirement, even when you add Social Security to the picture.

It’s tough when you’re constrained by a limited budget. For many of us, funds end up being diverted to short-term needs instead of being set aside for a 401(k) or an IRA. If that’s true for you, then clamping down on your spending would be a great way to free up cash for your retirement. Here are some of the biggest expenses you’ll want to tackle.


If you’re like most people, the roof over your head is by far your biggest monthly expense. in 2016 the average American spent $18,886 on housing, according to the U.S. Bureau of Labor Statistics. It also represents the biggest opportunity for cost savings.

Sure, a comfortable place to live is a necessity. Still, you probably have some flexibility when it comes to the size and location of your home. Consider holding off on a big mortgage payment until you start a family. When your kids are off to college, maybe it’s time to downsize into cozier digs. You can use the extra cash to jumpstart your retirement accounts.


Food is the second-largest outlay for most individuals, so it’s another important target for cost cutting. It starts with a more strategic approach to grocery shopping. For example, try swapping out name-brand cereals and snacks for generics, which generally saves you 15 to 30 percent at checkout. Often, the difference in quality is negligible.

You should also avail yourself of coupons and sale pricing. Is the store brand of pasta going for half price? Buy enough for the next couple of months.

If you eat out a lot, saving money on your food bill should be even easier. The U.S. Bureau of Labor Statistics says that in 2016 Americans typically spent a whopping $3,154 on restaurant fare. Treat yourself to a nice meal out once a week rather than making it your go-to option.


It’s not just that medical bills are one of the largest costs for most families; they’re also outpacing inflation, which makes them an even bigger problem going forward.

Cutting costs can seem like mission impossible, with the high deductibles and co-pays many of us face. Nevertheless, there are some ways to make a dent. For instance, if your doctor suggests a prescription drug that doesn’t have a generic version, ask if there’s a cheaper option that provides similar results.

Another tip: Before scheduling elective surgery, call the hospital to make sure all the doctors involved are considered “in network” by your insurance, including anesthesiologists. It’s a good idea to ask the same thing of your nearest emergency room before a visit, so you can avoid an exorbitant bill later on. And if you’re going to a local “urgent care” for a doctor visit, be sure the facility classifies itself as a doctor’s office, not a free-standing emergency room. It’s often difficult to tell unless you ask and the rates can be massively more expensive for care at the ER version.


In 2016 the typical American shelled out $9,049 for transportation costs. Of course, a big chunk of that goes toward our daily commute to work.

How can you cut back? One alternative is to take public transportation, if that’s cheaper. Even if you prefer driving, there are ways to rein in your costs, such as buying a used car or opting for a more fuel-efficient model.

Keep in mind that in the long run buying a car and holding on to it for at least 10 years is generally cheaper than leasing. Your initial payments might be lower with a lease, but you won’t own the car afterward, as you would with a loan.


Most Americans spent close to $250 a month on entertainment in 2016. Cutting that in half will boost your retirement allocation.

For many of us it should start with fewer trips to the movie theater. A pair of tickets and a visit to the concession stand can easily put you back $40. For a family of four, you’ll likely spend over $50. You can rent a flick on Netflix, Amazon or Vudu for a fraction of that cost.

More people are doing away with their cable bill, too. Alternatives such as Sling give you access to multiple cable channels for as little as $20 a month. You’re limited to live TV, but for all the money you’re saving, that’s a sacrifice that might be worth making.


It’s easy to splurge on things you can’t actually see, such as the unnecessary heat going into your home when you’re not there or the water you waste by running half-full loads in the dishwasher. Take a close look around your home: You’ll likely find several places you could be trimming your utility bills.

Here are some examples: Instead of using an older showerhead, invest $20 in a low-flow model that saves 25 to 60 percent on your water bill, according to the U.S. Department  of Energy.  Think about replacing conventional light bulbs with LED or compact fluorescent models that require about 75 percent less energy, especially in the rooms you use most. It’s money you could be putting toward small—but meaningful—increases to your retirement account.

Compare Popular IRA Providers

Provider Fidelity Investments Merrill Edge
Name Fidelity Roth IRA Merrill Edge IRA E*Trade IRA
Description Get a range of investment choices, tax advantages and 1:1 help with a Fidelity Roth IRA Learn More Get up to $600 when you invest in a new Merrill Edge IRA. Plus one-on-one guidance, actionable insights and easy-to-use tools. Learn More Invest for retirement at E*TRADE. Learn More