5 New Money Moves to Make Now • budget FASHIONISTA

The Congressional Budget Office recently projected that Social Security could face a cash-flow crunch in 10 years. If no changes are made to the program’s funding structure, benefits would have to shrink by 23% in 2035. This is problematic for many U.S. households that rely on Social Security as a primary income source or are still working but have limited retirement savings.

Many of you fall into the latter category. Like me, you’re still working, but retirement is closer than we’d like to admit. And no matter how much you have saved, it’s scary to give up your paycheck — while retaining your taste for stylish clothes, amazing food, and memorable adventures.

So, let’s talk about five new strategies to help lock in the comfortable retirement we deserve.

Gamify your wealth

The problem with traditional retirement advice is that it’s boring. Adding up what you spend, making a budget, tracking performance against your budget, prioritizing paying off debt…it’s all about as interesting as Charlie Brown’s teacher.

If you can’t stand to budget or track your spending, there is another way. Try making it a personal game to spend less on everything. While this strategy isn’t as precise as setting spending limits, it is vastly more motivating.

The way you implement this will vary based on your shopping habits, but here are some examples:

1. Challenge yourself to spend less on groceries this week versus last week. Repeat the challenge every week until you’re a master of getting more from your food budget. Try shopping from the sale flyer and buying generic products. Experiment with vegetarian meals by swapping tofu into your favorite recipes. Embrace cheap ingredients like rice and dried beans, both of which you can cook up easily in an Instant Pot.
2. Swear off impulse buys. Don’t buy anything without price-shopping and looking for coupon codes. Browser extensions like Rakuten and PayPal Honey make this easy, at least when you’re shopping online.
3. Use cashback apps and loyalty programs to your full advantage. I have earned thousands from loyalty programs, cashback credit cards, receipt apps and, yes, even the apps that pay you to play games.
4. Do your own nails and get a low-maintenance haircut. You can save thousands annually by limiting your salon visits.
5. Never assume you have the lowest price on recurring purchases. I recently realized that the “subscribe-and-save” price I was paying to Amazon for a certain product was higher than the going rate at a store near my house. My mistake? Blindly assuming Amazon had the best deal. Don’t do that. Always price-shop your recurring purchases, whether it’s a bottle of SPF moisturizer or your car insurance.  

Invest more and here’s how

Investing more today could be your most impactful wealth-building strategy. This is a simple, mathematical truth. Say you are 50 and you hope to retire at 65. The money you invest now has 15 years to grow. The money you invest in 10 years has less potential because it only has five years to grow.

And yes, the normal ups and downs of the stock market ensure that your investment growth will not be linear. But you can lessen the uncertainty by investing every month. In investing-speak, this is called dollar-cost averaging. A small regular investment can benefit your bottom line more than larger, periodic investments.

Try these strategies to invest more:

1. Raise your 401(k) contribution rate. Because traditional 401(k) contributions are pretax, they reduce income taxes withheld from your pay. For this reason, when you raise your contribution, you see a smaller reduction in your net pay. It’s kind of like free money. Take advantage.
2. Start investing $15 monthly in a taxable brokerage account. Open a no-fee brokerage account and set up automated investments. Pick an amount you won’t miss. If you are gamifying your wealth as recommended above, those habits should unlock at least $15 monthly. Start there or go higher if you can afford it. If you don’t know what to invest in, pick an S&P 500 fund with a low expense ratio.

Tackle the debt

High-rate debt is a nasty wealth problem. It consumes your hard-earned cash with interest charges that add no value to your life.

Here is the process for paying down debt:

1. Reduce your regular spending so your debt balances aren’t rising monthly. You can’t stop using the credit cards until your budget balances.
2. Chop up the credit cards. Don’t close them as this can lower your credit score.
3. Pick one debt account to pay down at a time. It makes sense to start with the highest interest rate, but you could also start with the lowest balance for a quick win. Pay the first account off and move to the next one. Repeat until you are debt-free.
4. Only consolidate debt into a longer-term loan as a last resort. Whether you use home equity or a debt consolidation loan, these facilities tend to introduce more problems than they solve.
5. Consider balance transfers only if you commit to repaying the full balance before the promotional rate expires.

Know that if you can’t get past the first step above, you will need to go the traditional route: Make a budget and enforce spending limits on yourself. Also consider recruiting some close friends to be your debt support group.

Love your job

Loving your job is an overlooked wealth strategy. When you know what aspects of your job you enjoy the most, it’s easier to identify:

1. Related career paths that can raise your income
2. Side hustle ideas that could grow into a business
3. Part-time roles that could replace your full-time gig in case you want to slow-roll into retirement

Feeling fulfilled at the end of your workday also keeps you sharp and healthy. You may be willing and able to work longer — say into your 70s — and spend less on medical bills as a result. Both efforts contribute to greater wealth later in life.

Know yourself  

Have you ever bought something you ended up hardly using? You’re not alone. In 2023, GoBankingRates quoted these shocking statistics about non-essential purchases:

1. Americans spend $3,768 on impulse buys, according to Ramsey Solutions.
2. Americans throw away 11.3 million tons of clothes annually according to Earth.org.
3. Americans spend an average of $18,000 annually on nonessential purchases as reported by Vox.

The trick to stemming unnecessary purchases is knowing yourself well enough to make disciplined shopping decisions. Often, the strongest urges to buy don’t come from need. You might instead be frustrated, bored, excited, or stressed out. Understanding those feelings and how they impact your spending is an important aspect of good financial management.

Even if you can’t quite identify the motivations behind your spending, you can implement some practical strategies to slow the impulse buys. One effective strategy is a waiting period. Before you buy anything other than food or gas, make yourself wait 24 hours before you complete the transaction. In that time, consider why you want the item and how it will add value to your life.

Wealth strategies for the retirement you want

The reality is that Social Security won’t fund a stylish and interesting retirement, in its current state or any future state. That’s why it’s critical to take charge of your finances now.

Small efforts to curb spending, invest more, pay down debt, and find enjoyment in work will pay off over time. Your future self will thank you for the wealth and confidence you built in the process.