Like HowStuffWorks on Facebook!

10 Ways to Build a Nest Egg


5
Cut Spending

Raise your hand if you know what the average person spends on eating out. According to the U.S. Department of Labor, the average person spent $2,619 dining outside the house in 2009. How much did we spend on transportation? Would $7,658 shock you [source: Bureau of Labor Statistics]? Cutting spending is one way to feather your retirement nest. There's an entire industry built around saving money on groceries, clothing and fuel. You can do simple things like stop smoking, stop drinking or take public transportation instead of firing up the SUV.

Some experts recommend keeping your committed expenses, such as food, clothing and insurance premiums, to 60 percent of your income. It is then wise to allocate 30 percent to retirement savings accounts, long-term savings accounts, or a short-term savings for such things new appliances, vacations, gifts, car repairs and other less predictable expenses. That leaves you 10 percent to spend any way you please [source: Jenkins].