Free Up More Money Now

From late-payment interest to excessive phone plans, the small costs add up. By watching your spending, you can find money in the most unexpected places.

Tomorrow. That's when a lot of people say they're going to get serious and really save for retirement. Yet they think they don't have the money to spare in the short term to get started now. It may be that all they really need is motivation - and few motivators are as effective as the power of compounding.

There can be a snowball effect when you put your money in an investment and then automatically reinvest those earnings over time. Compound interest can have a dramatic impact on building your nest egg. Here are some budget-conscious decisions you can put into action now in order to start freeing up and saving more money for your retirement today.


Get out of debt.
Two key components to reining in your credit card debt are reducing your interest rates and paying more than the minimum-payment amount. For example, if you have a $5,000 credit-card balance at an annual percentage rate (APR) of 13% and you make only the minimum payment each month (typically the greater of 2.1% of the balance or $10), it will take you 19 years to pay off that debt, and you'll have paid a total of $3,645 in interest - money that's just thrown away. By paying off your debt more quickly, you'll free up cash to put toward your retirement.


Cut down your phone bill.
Re-evaluate your local, long-distance and international calling plans. Shop around for the plan that gives you the greatest savings for the places you call most often. The same goes for cell-phone plans - make sure you have the least expensive one that fits your needs.


Pay your bills online.
Many credit card and utility companies offer free electronic payment options. Make instant payments online or have the money automatically withdrawn from your bank account each month. You'll avoid incurring penalties on late payments.


Save a little every day.
Food is expensive, especially when you're buying lunch five times a week. How about bringing lunch from home every now and then? Start with once or twice a week and build up to three or four days a week. Or buy one fewer latte each week. Dry cleaning is expensive, too, especially if it costs you more than $25 a week. Try doing some of that laundry at home. If you love movies and music, cut back on your purchases and downloads every month. A few dollars here and there each week add up.