Longterm saving will require some sacrifice, says retirement expert and author Josh Jalinksi.
“Cut out the Netflix; cut out the Uber; cut out the Lyft,” Jalinksi said. “People are spending way too much money on stupid stuff. They have to save for retirement first and then enjoy.”
Frequent Uber and Lyft users spend a median of $95 a month, which can add up to more than $1,000 a year, according to an 2016 analysis from Vice.
Saving for retirement doesn’t mean sacrificing all today’s luxuries, however. Jalinksi just advises that you have a spending plan.
“Give yourself a carrot on a stick,” Jalinski said in a recent interview with Yahoo Finance. “Yes, save 15% of your income, but reward yourself every year with a trip. Take a little honeymoon once a year with your spouse or significant other, but max out your retirement plan.”
For instance, when Jalinski and his wife were digging themselves out of $60,000 in debt, they avoided restaurants and instead ate grilled chicken and broccoli after putting aside $30,000 in savings each year. Eventually, their goal grew to stashing away $50,000 every year.
Jalinski, who also authored the book, “Retirement Reality Check: How to Spend Your Money and Still Leave an Amazing Legacy,” is a big fan of tax-favored accounts like Roth IRAs, which are funded with after-tax dollars.
“I like to get my latte. I like to get my coffee. I like to enjoy my money,” Jalinski said. “But I want to save my income, too, in tax-advantaged accounts, so that when I’m in retirement, I don’t have to worry about taxes.”
Dhara is a writer for Yahoo Finance. Follow her on Twitter @dsinghx.