You don't need to invest thousands of dollars monthly to retire comfortably, and you don't need to make six figures to have a cushy savings account balance. Small money moves can make a big difference in your finances. So big, in fact, they may change your life by allowing you to retire early or allowing you to switch to a career you really love.
"There are legitimately some people who literally have no money to start saving," says Chris Costello, co-founder and CEO of 401(k) management firm Blooom.com. "For other people, if they're being honest with themselves, it comes down to desire. If you want to save for retirement, you'll find a way to save for it."
Shanna Tingom, owner of Heritage Financial Strategies agrees. "It's almost always possible," she says.
Here are seven suggestions for easy ways to improve your financial future, regardless of how much money you make.
1. Automate your savings
The easiest way to save is to pay yourself first. Paying yourself first is easiest if you automate your savings.
For the millions of people who work for an employer that offers a 401(k) or 403(b) plan, nothing could be more simple than signing up to have a portion of your paycheck sent directly to your retirement account. You'll never miss it.
If you don't have an employer-sponsored retirement fund, Costello says it may still be possible to use a workplace's direct deposit option to send money to a retirement fund. "Set up some type of auto-draft where money is automatically coming out of [your] paycheck and going into a Roth IRA."
Check with your employer's human resources office to find out your direct deposit options, and then look for an investment firm that can take direct deposit payments.
2. Claim your employer's 401(k) match
While not required, many employers match a certain percentage of their workers' contributions to 401(k) accounts. This could be an exact dollar match or a percentage match, such as 50 cents for every dollar.
Either way, it's guaranteed money that has potential to double your retirement savings.
"Please, please, please do not leave money on the table in respect to the match," Costello says.
Even for those who are in debt, Costello recommends maxing out your employer's matching amount. However, he cautions against contributing above that amount until you're debt-free.
3. Actively manage your investments
Once you have money going into your retirement account, you can make the most of it by actively managing your investments. In other words, don't leave money in the default fund which is typically designed to neither make money nor lose it.
Managing your money may not seem like an easy or a small money move, but it doesn't have to be hard. Many financial firms offer target date funds that include a mix of investments that are based upon your desired retirement year. Increasing the returns from your retirement account may be as simple as calling the company managing your 401(k) and moving money from a stable value fund to a targeted fund.
Of course, you may be able to get even better returns on your money if you forgo the targeted funds and pick and choose from other available options. However, that's a money move that may not be particularly easy if you don't know much about financial markets. In that case, you could hire a wealth manager to help make the decisions for you. If you can't afford a wealth manager, you could use a service like Blooom to manage your money for as a little as $1 a month.
4. Shop for better savings account rates
While 401(k)s and IRAs are great for retirement savings, they aren't the place for an emergency fund. Unfortunately, too many people leave their emergency cash in a traditional savings account where it may only be earning 0.01 percent interest.
It's a small money move, but switching to a bank with a better interest rate is another way to help your bottom line. The best savings account rates are typically offered by online banks. Currently, Money-Rates.com reports rates as high as 2.02 percent for some savings accounts and money market accounts.
5. Up your savings by one percent each year
Make it a habit to increase your savings each year, even by as little as one percent. If you bring home a $2,000 bi-weekly paycheck that means putting an extra $10 per week into your 401(k) or savings account.
"Often times, there are things that can be cut or eliminated, such as Starbucks or cable," Tingom says. "Cut a little and you won't even really notice."
By using direct deposit or a payroll deduction, the money will never hit your checking account, and you'll never be tempted to spend it.
"Part of savings isn't the dollar amount," Costello says. "It's the habit."
6. Set up automatic bill payments
Tingom notes it's not enough to simply save money; you also need to be smart about how you spend money.
She recommends automating all your monthly payments and recurring expenses. Not only does automating payments help with budgeting, it can also help avoid costly late fees and other penalties. For example, Tingom says credit card companies may cancel introductory or promotional interest rates if even one payment is late.
"In addition to the $30 or $40 late charge, you no longer have a zero percent interest rate," she says. "You may have a 19 percent interest rate."
7. Opt for a 15 year mortgage
Of all the small money moves you could make, Costello says reconsidering a 30-year mortgage may be the most impactful.
"It can literally change your financial fortunes more than any other decision," he says of selecting a 15-year mortgage.
He likens it to a form of forced savings since most people make a point to pay their mortgage first. "As a result, they are quickly building up equity in their home, not to mention that they will be able to ditch their monthly payment twice as fast as those with a 30-year mortgage."
The trade-off for a shorter mortgage period is that you may have to settle for less house, but it could be worth it.
Imagine what it would be like to have the freedom to do what you want because you have plenty of money in the bank and no mortgage payment tying you down to a job you hate. That's the power of small money moves.