SUCCESS

Building wealth doesn’t happen all at once. But making a consistent habit of saving money regularly can help you reach your financial goals such as buying a house, sending a child to college or retirement.

A small habit that can help you save more than $10,000 in two years with minimal impact on your budget is setting aside $100 every week to invest in an index fund. You can make these transfers automatic so you don’t need to think about saving the money once your paycheck hits, and putting it in an index fund means it will grow over the long term — ideally resulting in much more than just the initial $10,000.

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How to get in the habit of saving

Financial advisors tend to say that automating your savings and investing is key to staying consistent. If you’re investing in a 401(k) or similar employer-sponsored retirement plan, you’re likely already automatically investing. But brokerage firms let you conduct automatic money transfers from your bank account into other types of investment accounts, like individual retirement accounts (IRAs) or taxable brokerage accounts. You can even set up automatic investing so that the money isn’t only transferred, it’s also automatically used to buy shares of a stock or fund.

While investors can choose from many stocks and funds, a low-cost S&P 500 index fund or total market fund can be strong, well-diversified options. The Nasdaq 100 is another contender for investors who want to focus on tech stocks and aren’t afraid to take some additional risk for a higher potential return.

Investors only have to set up this automatic transfer once. Then, the financial institutions will take care of the rest, ensuring that your money goes straight into the fund of your choice.

If you’re saving for short-term goals or building an emergency fund, you can also automatically transfer the funds to a high-yield savings account instead of an investment account.

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How much you can save

Investing $100 per week in an index fund results in $5,200 in principal by the end of the year. You can reach $10,000 within two years just with principal — and that doesn’t even include long-term gains: Since 1957, the S&P 500’s average annual return is 10.54%. Though keep in mind that past performance doesn’t guarantee future returns, and returns are likely to vary year to year.

Plus, depending on your income and other goals, you could boost your monthly contributions. Raising the amount to $150 per week results in a $7,800 principal per year. Investing $200 per week ensures you put more than $10,000 in principal into your portfolio by the end of the year.

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Increase your savings over time

This habit works well because it makes saving money somewhat of a passive practice. You don’t have to log into your brokerage account each week and manually move money and over time, you may forget you even had that extra money to spend.

Try to increase your savings amount regularly. Even saving $5 extra every week would result in $260 more of your principal savings by the end of the year. You can also increase your contribution if you get a raise or holiday bonus.

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Financial planning in retirement is essential. You no longer receive a regular paycheck, which means saving money on everyday items like gas and groceries can make a huge difference — and shopping at Costco can help.

The wholesaler offers discounts and deals on a wide variety of products and services you may already be buying. While there is a membership fee, if you shop smartly, you may be able to recover that fee quickly.

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Using Costco as more than just a grocery store

While you can buy everyday groceries at Costco, it can provide far more than food for financially savvy retirees. Taking advantage of all the different discounts at Costco can maximize your savings, helping to preserve your nest egg and allowing you to reach your long-term financial goals.

Here are four ways in which you can make the most out of your Costco membership.

1. Food and fuel

Costco offers ample shelf-stable staples such as spices, canned goods, pasta, rice oats and more. The wholesaler also has affordable meat options — and buying its frozen meat means you’ll get a large quantify without worrying about the food going bad too quickly. In general, Costco is a great place to buy in bulk as it tends to offer lower prices than traditional grocery stores for certain items when you consider how much of the item you’re getting.

Keep in mind that when it comes to saving money at Costco, those savings only come to fruition if you consume bulk items before they spoil. If you are buying too many goods and can’t consume them all before their expiration date, you can consider doing bulk Costco purchases with a friend, family member or neighbor. Splitting up the costs and goods makes it easier to consume the foods before they expire.

You can also save money (and time) with a Costco membership by combining grocery trips with stops at the gas pump. The retailer tends to have lower gas prices than the typical gas station in a bid to increase in-store foot traffic.

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2. Gift cards

You can get immediate savings out of your next Costco trip by looking at their discounted gift cards. For instance, at the time of writing, a Costco member can buy two $50 Uber Eats gift cards for just $79.99, or a $50 gift card for the movie theater chain Regal Cinemas for $39.99. If you buy from a certain business often, or are looking to give a gift card as a gift, you may be able to find what you’re looking for on Costco’s website.

However, you don’t want to end up overspending because of this perk. Only buy a discounted gift card if you actually eat at the restaurant or use the product.

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3. The quarterly inventory

Buying in bulk isn’t only a way to save money on food. You can pick up buy large quantities of paper goods, batteries, light bulbs, cleaning supplies and other items you may need to replenish regularly.

While Costco can get away with a vast inventory thanks to its massive warehouses, you may not have the same flexibility — especially if you’ve downsized in retirement. Each quarter, do an inventory of these items and determine what it makes sense to pick up on your next Costco run based on what you need and what you have room to store.

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4. Insurance check

Insurance premiums can eat into your monthly budget. And while it’s important to have this protection for purchases as large as your home and car, you may be paying more than you need to.

Costco offers both auto and home insurance discounts through partners, as well as a deal on pet insurance. Compare the rates with what you’re currently paying to see if switching to another provider could help you save.

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