How to Sock Away $50 a Month Into an IRA
Saving for retirement may feel challenging when your budget is tight, but by putting away as little as $50 a month in an Individual Retirement Arrangement, you'll make great strides toward planning a comfortable future for yourself. At first glance you may think, $50 a month? How can I possibly save that much? And then, how can I put it into an IRA account? But with proper planning and a little bit of organizational savvy, you can tuck away a chunk of change each month and maybe not even realize how quickly it's adding up.
The best way to save money is to do so on a day-to-day basis and monitor your progress. In order to save $50 a month, you have to save roughly $1.66 per day. When you break down the goal into a realistic amount, it becomes so much easier to reach. You may be tempted to spend your extra cash, though, so start by completing six simple steps to set up a savings strategy, then read on for some ways to save and earn extra money.
You have a bank account already, so why set up a new one? Research shows that consumers who set aside separate accounts for either savings or direct deposits save more money. Providers such as Capital One offer free savings accounts with no minimum balance and free transfers. You can easily fund the account with as little as $1.
PayPal is going to become your new BFF. The service allows you to connect directly with merchant services such as eBay (which we'll get into next). Some people may prefer to pay you via PayPal. Why make it harder to earn those crisp George Washingtons? The PayPal account can be linked to your new bank account, for transferring those extra dollars you'll be making.
There are almost certainly items in your house that you no longer use that you can easily sell on eBay or elsewhere online, which will help you start earning extra money for your IRA. That ugly Christmas sweater you've never worn? Someone wants to buy it. Take some old stuff, snap photos, and post them on eBay. The site provides helpful phone support and will let you know which items are likely to sell and how to price them correctly.
Providers such as Fidelity Investments allow you to set up an IRA account with no money down. When you do accumulate that first $50, you can deposit the funds into a money market account within the IRA. This is essentially the same as putting your money into a low-interest-bearing savings account, but with the tax advantages of an IRA. The average rate is between 1.5 and 1.67 percent. Accumulating more money opens up additional investment options.
Connecting the accounts makes it easy to transfer funds. This will take a few minutes online with your new banks, and your email account. It entails transferring a test amount, typically under a dollar, to ensure that the accounts are set up correctly. Again, this is essential for easily transferring money into your new savings account during the month and then into your new IRA. It may take up to 24 hours, but each bank is a little different.
Once the accounts are linked, you can set up automatic transfers. If you are up for taking just a tiny bit of money out of your regular bank account each week, you won't even know it's gone. You can transfer as little or as much as you like. Try starting with $5 a week, which will give you $20 a month in a no-fee savings account. Now that you have a place to accumulate funds, you're ready to start earning the money you need for your IRA.
Each week, set aside some household items or clothing that you no longer need. Then pick a weekend to host a yard sale, posting the information on signs around the neighborhood or online with Craigslist, local Facebook groups or using a yard sale app. Remember, you only need to sell one item for $1.50 and you're on your well on your way to reaching your monthly goal.
If you don't have a ton of stuff to sell or are looking to combine forces, gather friends together to have a group garage sale. You can enlist neighbors or even offer to help organize one for neighbors who might be moving. Ask customers to pay you via PayPal so that you are less tempted to spend those few dollars at your local coffee shop.
We all have them — those dusty old cassettes, CDs, and maybe even old vinyl records, which have become more and more popular in the past decade or so. Sites like Discogs and Popsike.com can tell you how much your old albums are worth. If you're a really savvy shopper, hit up someone else's yard sale, buy their vinyl, and resell it for even more cash.
Sure, lemons, sugar, cups, and signs all cost money and you're trying to make extra money. But if you have kids, or even neighbors and friends with kids, a classic lemonade stand can still be a fun way to turn a little profit. Plus, you get to spend some quality time with your family or offer your friends a break from their own children. Better yet, time it with your yard sale and you're likely to attract more customers to both.
In states that have container deposit laws, taking empty bottles and cans directly to the recycling center or supermarket will earn you cash in exchange. If your state offers a refund, start saving recyclables for a weekly drop-off. If you're getting 5 cents a can, you only need to redeem a few 12-packs of soda to surpass your daily goal of $1.66. Of course, you can always save more, because it's good for the environment and you'll reach your goal even faster.
Popular Mechanics breaks down the steps to recycling scrap metal, from choosing the right vehicle to the proper alloys. And Allan Company has a handy guide to help you determine the many and varied types of metals. Scrap metal recycling is not for everyone, but if you have penchant for metal, copper recycles at $1.14 a pound and yellow brass at 83 cents a pound. A couple of pounds of scrap metal will get you the money you need for a day's savings.
Signing up to be a mystery shopper through a site like iSecretShop is a fun and inventive way to shop and also earn extra money. You get paid to shop in stores you like and write up reviews on customer service, overall experience, and products. Because it is based on your opinion, there is no qualifying process, and you don't even need a smartphone. It's free to sign up and nationwide, so you can start shopping and earning right away.
It may involve caring for pets or just keeping the place clean, but house-sitting pays between $25 and $50 depending on the neighborhood and whether you're staying overnight. Consider asking to be paid through PayPal — cash that doesn't actually touch your hands has a better chance of getting into your IRA.
Dog walking has become a lucrative business, fetching $25 to $35 per walk. That's more than half the monthly IRA target right there. The trick, though, is getting those canine clients. Start by going for leisurely strolls in your neighborhood. When you see a person with a pooch, introduce yourself and let them know you're in the business. Design a flyer to put up at your local pet store and around your neighborhood. And, of course, if you have friends with pets, let them know you're available. Consider offering a discounted rate of $10 per walk for friends to get started.
That's right. Depending on your locks, you can earn anywhere between $100 and $4,000 (okay, if you earn $4,000 for your hair, you are probably Rapunzel). Redheads and blondes fetch higher prices for their hair, since these colors are less common. BuyAndSellHair is one of the most prominent sites for selling hair; however, there's a $14.50 fee to place an online ad. Still, keep in mind, once the hair sells, you would be ahead of your savings goal. If you want to avoid the ad fee, HairSellon offers free accounts.
Lyft drivers can choose their own hours and earn over $800 driving on weekends or just Friday alone, according to the company. While the earning potential can vary depending on where you live and how often you drive, driving for a ride-share company could be a good option — especially if you enjoy driving and talking to people. Keep in mind: Your car must have four doors, five seat belts, and in-state license plates, and you must own either an iPhone or an Android phone. Lyft boasts having safety protocols in place, DMV records, and a national and county background check. This could finance your target goal and then some, although it may take a month or two to get set up.
Food delivery service DoorDash pays weekly, per delivery, and its employees, called "Dashers," get to keep all tips. If you live in one of the 600 cities in their market, this can be a way to earn a bit of extra cash. DoorDash requires an iPhone or Android phone, a valid driver's license, and a clean driving record. Remember, you need to make only a few deliveries to hit your goal. But you may end up enjoying it and making a nice amount of extra cash.
Consumer research is big business, and advertisers and retailers who want your opinion will pay for it. American Consumer Opinion, for example, awards members points equivalent to pennies for taking surveys. When you have 1,000 points, you can redeem them for $10 cash. If you start early in the month, you will be a few weeks ahead of your IRA goal.
Many banks have started offering programs designed to encourage customers to save. Bank of America, for instance, offers a program called Keep the Change. Any purchases made with a debit card are rounded up to the nearest dollar, and the difference is added to a checking or savings account. After a few weeks of regular purchases, you'll definitely have a few bucks to add to your IRA.
So, now the month is over, and if you've been applying these principles for saving or earning a few dollars here and there, you should have $50 to put into your IRA. Whether you've opted to collect smaller daily amounts or jumped at one of the bigger-ticket items, any funds you've saved will help you reach your desired goal. The key here: Don't hesitate. You've connected your accounts. It's time to transfer those funds. A couple of clicks and you will be on your way to tax-advantaged savings.
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