Money Management

If you don’t have a lot of money to invest, you need to make your money work for you. Learn how you can do that by taking advantage of compound growth. 

The average 401(k) balance is around $30,000 for people who are under 35. Balances go up from there, with those ages 65 to 75 boasting an average 401(k) balance of $426,000, according to data from Northwestern Mutual.

While that may seem like a good amount of money, the reality is that a retiree with this average balance would only get about $17,040 in annual income from it. This assumes they withdrew 4% from their brokerage account in their first year of retirement and increased withdrawals by inflation each year — which is what many experts recommend in order to avoid running out of money.

The fact is, many Americans simply have too little saved for retirement — and that’s understandable since it can be hard to find extra money in your bank account to invest. The good news, though, is that there is a way to retire with the financial security that you deserve even if you aren’t rich. Here’s what it is.

Compound growth can be the key to a secure retirement

If you want to make sure you have the money you need to enjoy your later years instead of spending your retirement worried about how to pay the bills, you need to take advantage of the magic of compound growth.

Compound growth refers to the way your money grows once you invest it and your investments start producing for you. The returns you earn are money that you don’t have to personally work for that can be reinvested. Since your investment account balance grows bigger effortlessly thanks to compound growth, you can earn larger returns each year even without doing anything extra.

Here’s how compound growth can guarantee you a secure retirement

Compound growth can go a long way toward growing your nest egg — especially if you give it a lot of time to work. In fact, the table below shows just how effective it is in helping you achieve retirement security.

The table assumes you earn 10% average annual returns on your invested funds, which is a reasonable expectation, as the S&P 500 has consistently produced this rate of return over the last 50 years.

As you can see, you aren’t investing particularly large sums here — especially if you’re investing only $1,000 or $2,500 a month. But you can still end up with a substantial amount of money by the time you reach retirement, thanks to the profits that you make and the fact that your money earns more money for you.

And as the table makes clear, the more you invest and the earlier you begin investing, the more time compound growth has to work its magic. If you don’t have tens of thousands of dollars to invest, simply investing small amounts consistently over a long time could still give you the funds you need in your senior years.

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So, starting early and saving consistently are ultimately the best steps you can take if you want retirement security and you won’t have a fortune handed to you.

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Eager to cheer on your favorite team? Read on to learn about some of the benefits of being a season ticket holder. 

Whether you’re a baseball fan, football fan, or proud supporter of grown men tackling each other on ice while playing hockey, there’s nothing like the thrill of being able to cheer on your favorite sports team in person. And if you’re truly a big sports fan, you may be contemplating a season ticket plan.

Now, it’s pretty impossible to put a general cost on season tickets. That’s something that will hinge on factors that include your local team, the type of seats you want, and the number of games you’re trying to attend.

But either way, you should expect to spend a fair amount of money on season tickets. And while that outlay may be a stretch, you might at least get to enjoy these financial perks as part of your plan.

1. Discounted ticket prices

You might spend less money on a per-ticket basis when you buy a season ticket plan. It’s the same way Costco gives you a break on your groceries when you’re buying them in bulk quantities.

Also, season ticket plans are commonly purchased directly through the venue where you’ll be watching games. That could mean avoiding the hefty cost of third-party fees, like the ones you’ll pay if you buy individual game tickets on Ticketmaster.

2. Discounts on merchandise

It’s pretty common for sports fans to show up to games dressed in team attire. As a season ticket holder, you may be eligible for a discount on team merchandise. That might also come in handy if you have sports fans in your life you want to buy holiday gifts for.

3. Discounts on food

Many sports venues do not allow you to bring in outside food or drink. That can be problematic when you’re talking about spending roughly three hours in the same place.

Of course, buying food and drinks at these venues can be shockingly expensive. But as a season ticket holder, you may at least be eligible for a discount on those purchases.

Can you afford to be a season ticket holder?

As you can see, there are financial benefits to having a season ticket plan. But the big question is, can you afford one?

The cost involved can vary tremendously based on the team you’re supporting and the type of package you’re considering. Some teams, for example, offer quarter- or half-season plans, which are apt to be less expensive than full-season plans.

You’ll need to assess the state of your savings account balance and income to see if holding season tickets is feasible for you. But there may be ways to make it more affordable, including:

Splitting your ticket package with friends. If you can’t swing the full cost of your tickets, get one or more friends to buy in and divide the tickets evenly.Compromising on seats. If you’re willing to sit in a section with a slightly less optimal view, your costs might come down.Selling some of your tickets. Sites like StubHub make it easy to sell tickets to sporting events you can’t use — or can’t afford to use. So if you buy a 10-game package but can really only afford five games’ worth of tickets, you could try selling the other five to get your money back.

Being a season ticket holder is something a lot of people dream about. If it’s not in the cards just yet, it’s something you can work on saving for. But if you assess your personal finances and decide you can swing it, you might enjoy a host of benefits.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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Saving $1,000 a year for retirement may not seem like much. Read on to see why it’s a pretty big deal. 

You’ll need personal savings in retirement to cover your expenses, even if you’re eligible for Social Security. Those benefits will only replace about 40% of your pre-retirement earnings if you can bring home a typical wage, so retiring on Social Security alone can mean taking a pretty significant pay cut.

You’ll often hear that it’s a good idea to try to save 15% to 20% of your income for retirement. And that may be doable if you earn $200,000 a year. But if you earn $50,000 a year, not so much.

In fact, you may be in a position where you can really only afford to part with $1,000 a year. And that may not seem like a lot at first. But actually, if you save $1,000 a year for retirement over many years, you could wind up with a pretty sizable nest egg.

When you give your money lots of time to grow

If you earn $50,000 a year, saving $1,000 a year in an individual retirement account (IRA) or 401(k) means parting with 2% of your salary. So it may be doable to contribute that much, even though it means giving up something or other.

Now, you might think that $1,000 a year won’t go very far in the context of building up your retirement nest egg. But if you invest that money in stocks, you might generate a pretty strong return that, over time, allows your money to grow nicely.

Over the past 50 years, the stock market has delivered an average annual return of 10%, as measured by the performance of the S&P 500 index. So, let’s say you’re only able to save $1,000 a year for the future, but you do so every year for 45 years. If your portfolio gives you a 10% average annual return, you’ll end up with a balance of about $716,000 in time for retirement.

By comparison, the average person in their 60s today has $112,500 saved for retirement, according to Northwestern Mutual, while the average American across all age groups has $89,300. So if you were to amass a fortune of $716,000, you’d be well ahead of the game.

Make sure to find that money

As you can see, it doesn’t necessarily take a ton of money each year to build up a giant nest egg. But you do need to save some amount of money consistently. And finding $1,000 every year isn’t a given when you’re on a moderate or lower income and have a lot of bills to cover.

One thing you may want to try to do, though, is automate contributions of about $83 a month to a retirement account if you’re aiming for $1,000 a year. That way, your money will land in that account off the bat, before you’ve gotten a chance to spend it.

If you have a 401(k) plan, that’s actually your only choice, as these employer plans are funded with payroll contributions. But with an IRA, you’ll need to actively set up an automatic transfer. It’s a move worth making, though, because it could keep you on track with your savings goals.

You may need to be willing to minimize some expenses or join the gig economy with a side hustle to find that $1,000 a year. But think about it this way: If you don’t make that effort, you might end up having to live on just 40% of your income as a retiree. On the other hand, parting with $1,000 a year could set you up with your dream retirement, so it really is worth making those sacrifices.

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We pored over the data and user reviews to find the select rare picks that landed a spot on our list of the best stock brokers. Some of these best-in-class picks pack in valuable perks, including $0 stock and ETF commissions. Get started and review our best stock brokers.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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The cost of food is a major concern for many people. Learn the steps to take to save money on your grocery purchases. 

Buying groceries has become a financial nightmare for many people. The cost of food has surged in recent years thanks to inflation and supply-chain disruptions from COVID-19. And with grocery prices up so much, it should come as no surprise that 94% of Americans recently indicated that they are still worried about the cost of food and beverages.

If you are one of the many people who is worried about running up big credit card bills to pay for groceries, there are some possible solutions. These tips could help you keep more money in your bank account while still letting you serve delicious and nutritious meals for yourself and your loved ones.

Figure out which stores are cheaper for you

Shopping at stores with lower prices can help you spend less on food, so spend a few weeks writing down the price of staples at your local grocery stores as you shop. If you find that the items you are buying every week tend to consistently be much cheaper at one store than at another, make that your home store.

Tracking prices may seem like a lot of effort, but the reality is that this doesn’t have to take much work if you just try out different local stores for a few weeks and keep your receipts or write down prices in a notebook or your phone’s notes app.

You may be surprised how big of a difference there is between different stores in your area — and you may be dismayed to find the store you shop at out of habit has been overcharging you. When I did this exercise, for example, I found that Walmart was consistently cheaper than my local Giant store. A gallon of milk was costing me $3.99 at Giant, but it was just $2.62 at Walmart. That’s $1.37 in savings on just this one item!

Buy in bulk when things go on sale

Buying in bulk when items you regularly buy go on sale can also help you save. You’ll want to try to buy enough to last until the next sale. Most stores put items on sale around once every six or eight weeks, but you can find out your store’s schedule while you’re tracking prices.

If you discover an item goes on sale every six weeks and you go through one of them every two weeks, just buy three each time it is on sale so you never have to pay full price.

Make a meal plan around the sales flyers

Planning meals in advance can help you save by avoiding waste and also disincentivizing you to eat out since you already have a meal lined up — and the ingredients on hand for it. If you can use the sales flyers when making your plans, you’ll save even more.

Get your flyers for the store where you’ve discovered staples are the cheapest, then plan your big meals around whatever proteins and veggies are on sale that week.

Use coupons

Store coupons and manufacturer coupons can both save you money. Check the Sunday paper for coupons and your store’s sales flyers to see if you can combine deals to get food very inexpensively. You can clip coupons from the paper or buy them online for affordable prices.

You can also visit manufacturer websites and even write to manufacturers to ask them to send you coupons so you can save even more.

Look into government benefits

Finally, if you are truly worried about being able to put food on the table and you don’t think these options will help you, you should look into government benefits such as the Supplemental Nutrition Assistance Program (SNAP). You can find out on the USDA website if you are eligible for SNAP benefits, as well as how to complete the application process.

Taking some or all of these steps can help you make groceries more affordable. Remember, if you are struggling, you are absolutely not alone — 94% of your fellow Americans are there with you, so don’t be afraid to look into all possible solutions to cover your food costs without giving up your other financial goals.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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