Are You Saving Money by Choice or Just by Chance?

Are You Saving Money by Choice or Just by Chance?

/12 Comments/in , , /by Mary Hunt

Saving money isn’t about how much you earn. It’s about the choices you make. Even with student loans, car payments, and rising living costs, you can find a way to start saving. It’s not magic; it’s strategy, planning, and sometimes a little tough love. Whether you’re juggling debt or thinking about retirement, the key is starting today and letting your money work for your future.

Are You Saving Money by Choice or Just by Chance?

A question I answered in a previous post sparked a small avalanche of reader mail. Many were surprised, some even shocked, that I would suggest saving a significant portion of their paychecks for retirement. For people who haven’t saved much (or anything) yet, the idea of setting aside thousands of dollars each year can feel impossible.

Here’s one of those messages:

Dear Mary: I am a 34-year old college grad. My school debt is approximately $46,000. My car loan is $8,500. I have a chronic medical condition that costs me thousands each year.

I was reading an article that you wrote where you told a reader that she needed to save the maximum allowed in her 401(k), which I believe was something like $23,500 a year, plus save an additional 10% of her net income in her emergency fund.

I am barely making it right now, though I work full-time as a teacher and make approximately $76,000 a year. I would love to know what you would suggest I do to start being able to save that much.
–Heather

Dear Heather: I remember that article. Reader B.H., as she introduced herself, was a recently single mother with two college-aged kids. She was in a tough spot, prioritizing her adult children’s financial needs over her own and barely keeping afloat.

How to Start Saving Even with Debt

For someone in her position, the first step is shifting focus back to her own financial future. Her children are capable of managing their finances now, so it’s time for her to start building her retirement savings.

I advised her, “You need to make sure that you are contributing the maximum each year to your employer’s 401(k) or 403(b) retirement plan. Once you reach age 50, you can increase that amount with the allowed catch-up contribution, and you should.”

Of course, she doesn’t have to hit the maximum if it feels unrealistic, but the key is starting now. Every dollar she invests today has time to grow, compounding quietly in the background while she maintains her independence and security.

Why Saving Money Is About Choices, Not Income

It’s easy to think you can’t save because your debts are high, or that your paycheck just isn’t enough to put anything aside. That’s a myth. Saving isn’t about how much you earn; it’s about the choices you make with the money you have.

Even with student loans, car payments, and other bills, someone earning $74,000 a year usually has some discretionary income. The question is: what will you choose to do with it? Spend it all today, or start building tomorrow? Even if you can only set aside 5% right now, start there.

Cutting Expenses Without Feeling Deprived

From there, get curious about your spending. Track it. Know where every dollar goes. Then look for small, practical ways to free up extra cash, like swapping an expensive subscription for a cheaper alternative, cooking at home more often, or using technology to shop smarter and cut costs. Every little choice adds up, giving you control over your money and peace of mind for the future.

The fastest way to boost your savings is to trim expenses. Prices feel like they’re rising every day, but there are always ways to spend smarter without feeling deprived.

Take a hard look at every expense. Eliminate what you can—like cable TV, extra restaurant meals, that daily drive-thru coffee. Then dig a little deeper: ask, “How can I reduce this, even by a small amount?” The results compound quickly. And when you finally pay off a car loan or student debt, redirect those monthly payments to yourself. That’s when your financial independence really starts to shine.

Using Your Free Time to Boost Savings

As a school teacher, you likely have at least a couple of months off in the summer, plus extended breaks at Christmas and spring. Instead of seeing that time as purely for rest, think of it as a chance to give your savings a boost.

Side hustles, like tutoring, freelance work, seasonal gigs, or even selling handmade goods online, can help you reach your financial goals faster. The key is consistency: if you dedicate that extra income directly to savings, it can move the needle significantly, helping you hit targets like 10% of your net income each year.

And once you have that extra income in hand, the next step is making sure it’s going to work as hard as you do.

Retirement Savings Basics in 2025

Here’s a quick guide to the basics of retirement savings in 2025 so you know exactly where to put that money.

401(k) and 403(b) Plans

  • Standard Limit: You can contribute up to $23,500 per year.
  • Catch-up Contributions (Age 50+): Add an extra $7,500 if you’re 50 or older.
  • Special Catch-up (Ages 60–63): For those 60–63, you can contribute up to $11,250 more.
  • Combined Maximum (Age 60–63): That adds up to $34,750 total if your plan allows the special catch-up.

Traditional and Roth IRAs

  • Standard Limit: You can contribute up to $7,000 per year.
  • Catch-up Contribution (Age 50+): Add $1,000 if you’re 50 or older.
  • Combined Maximum (Age 50+): That brings the total to $8,000.

Bottom line: the earlier you start, the more time your money has to grow. Even if you can’t max out your contributions right away, contributing consistently, even a little, makes a real difference over time.

The Power of Starting Now for Your Future

If you’re wishing you’d started saving at 34, or even earlier, remember: the past is unchangeable, but the future is wide open. The most important step is simply starting today.

Make intentional choices. Embrace frugality without feeling deprived. Simplify where you can, and be willing to make small sacrifices for the sake of long-term freedom. Even modest savings now grow over time, thanks to compounding, giving you options and peace of mind you can’t buy later.

Think of it this way: every day you delay is a missed opportunity for your money to work for you. But each day you begin, no matter how small, is a step toward financial independence. It’s not about perfection. It’s about progress, control, and reclaiming your future.

It’s only too late if you don’t begin now.

 

Question: What’s one small money choice you’ve made this month that’s made a big difference? Inspire others in the comments below.

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12 replies
  2. Jean says:

    I started saving $5.00 bills when I received them in change. As of January 1st 2025 I was able to save $700.00 to use for my vacation this September. I’m going with contentment knowing I will not have to incur credit card debt this year for vacation. It was fun and challenging to do this. I plan to continue Mary’s advice to do this.

    Reply
  3. Arthur Mantzouris says:

    I agree with all the comments. I wish I had the smarts to save when I worked all my JOBS but I didn’t. But I’m trying to do a catch up now. I’m 52 this year and I’m trying to save every money I get from my SSDI Check and I doesn’t go far but I’m at least saving what I can. I don’t plan on dying anytime soon but we all know that you can kick the bucket anytime. So what I suggest to all of you is to live your life now and yes it is a good idea to save but don’t beat yr self up if u don’t have alot of MONEY socked away.

    You only live once in this System anyway so try to enjoy what you have now and don’t beat yr self up bc your not meeting with a CEO of some big firm. Try to enjoy the simple things in life save a little and watch the sun set…Bc u never know when your going to die so try to keep your life simple without trying to beat your self up bc you didn’t save a whole lot.

    Reply
  4. peggy says:

    Dear Mary, I read w/interest your column on parents saving for retirement. it is unfortunate that folks who cannot afford to pay for college, sign loans for education. i wonder if these folks who enable their offspring think they will b repaid when it comes time for them to retire. this is a scary trend. people need to let their children grow up and b responsible for themselves. i cannot guess what they r thinking. my nephew has a straight A report, and is going to enter a community college, because HE does not want to put himself in debt. my brother and sister in law have given him the gift of responsibility for himself.

    Reply
  5. MoreFreedom says:

    I also urge people to save for their retirement. I participated in my employer’s 401k match (matching up to 6% of my salary), and also stock purchase program (I got a 15% discount for up to 5% of salary applied to such purchases). Thus, I saved 21% of my income. I worked for almost 40 years, and that savings has grown to about as much as the company paid me, in total, over those years. And FWIW, my employer’s stock underperformed. So I’ve got enough savings for decades of retirement. That 401k match is a no-brainer IMHO, it’s essentially a 6% raise if you save the money.

    Mary’s advice was also helpful in avoiding unnecessary expense. Work, and being a cheapskate, are all about creating value for ourselves, our family and customers (at least to me – thanks Mary) which I see as very positive.

    Reply
  6. Suzanne Patterson says:

    My parents spent every cent they ever earned and saved nothing for retirement. My father passed away 6 years ago, and the last bit of money my mother had was spent on his funeral. It wasn’t enough so my siblings and I paid what she couldn’t. And then each of us paid $2000 the day after the funeral to replace the HVAC system in her house. The only money she has coming in is a small social security benefit and reverse mortgage payment. It’s not enough to pay her living expenses, and she relies on her children to pay what she can’t.
    My husband and I are retired and our children will never have to support us because we DID save and invest for our retirement. It wasn’t easy. We went without things that other families enjoyed, but we’re glad that we did. We are financially comfortable, largely debt-free, and can enjoy our free time doing things we enjoy. Our children can save and invest for their futures because they don’t have to support us. So to those who think it’s impossible to save for the future, ask yourself how you’ll feel if you’re unable to meet your living expenses when you’re too old to work, or if you must rely on your children to support you. Ask yourself if it’s worth making sacrifices in the present to give yourself and your children a secure financial future.

    Reply
  7. Nancy says:

    I told my children when they started their first career jobs – contribute at least the amount the company matches in the 401k for a 100% gain. If you start with your first paycheck, you will adjust your spending to what you have remaining and will never miss it. As you watch it grow, you will be encouraged to contribute more with each pay increase.

    Reply
  8. cheryl says:

    This is for the Teacher that thinks they can not save. Most employers have some sort of company match for a 401k, ours is 6%, start with 1% and they match 1%, let that go for about 3 months, see how you fare, then sneak it up on yourself and in 6 months do another 1% until you get to the Company match maximum, Utilize your Library in town to borrow books, movies, music, and now EVEN WIFI Hotspots, (in our city), Starbucks is ubiquitous, so are some wifi cafes, use them for all non private, non financial transactions, the schools usually have their own enclosed internet, you can do your lesson plans on that one. You do not mention if you are married or with children, but if single, check out local food pantry, ours has a program whereby you volunteer hours to help sort and bag, and you can earn free groceries, (if your health permits). You can also reach out to the manufacturers of your medications to see if they may have a program that you can get your medicine costs reduced. It is not easy, but look it as a fierce competition that you can conquer and pretend that you are encouraging a student to go forth and succeed!!! YOU CAN DO THIS!!! After all those exams to become a teacher are no joke. IF YOU CAN PASS THOSE, YOU CAN DO THIS!! Most of the time, it comes down to getting out of your own way!!! Sending you GOOD ENERGY and BIG HUGS!!!

    Reply
  9. Dot says:

    I wish my parents would have taught and explained retirement or even savings – I would be sitting pretty . I can’t change the past but I can my present and future .
    Keep teaching ! I have learned a lot !!!

    Reply
  10. Susan Sharp says:

    I started participating in my employer offered retirement account the moment I became eligible. Initially I contributed a small amount but with every raise I got I put that additional money in my retirement account. It’s healthy now and I am planning on retiring in a few months. I’ll be fine. It doesn’t have to be a huge amount but I always encourage the younger co workers to save everything they can for retirement. I will have to give up nothing to enjoy my retirement.

    Reply
    • Maria says:

      I also encourage all young people to save for their retirement. Once they get to be a certain age, most companies will not want them anymore.

      Reply

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