When times are tough, we often look to our monthly budgets to find ways to cut back. Investing for your retirement should not be one of those thing that you cut out of your budget if at all possible you can help it. For example, if you are dollar cost averaging your way to maximizing your Roth IRA, $460 per month would be allocated in your budget to investing with a Roth IRA. This $460 per month should be protected at all cost in good time and in bad. Raiding your Roth IRA contribution during trying times in the economy and with your finances can have devastating repercussions later in life as you approach retirement. But, there are other things in your budget that you should consider getting rid of first before you touch your Roth IRA contribution.

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Three Things To Consider Cutting From Your Budget

Your Morning Coffee

Ever since David Bach made the Latte Factor famous in his book, The Automatic Millionaire, coffee has come under attack because it is a budget killer. I am not talking about the kind that you brew at home. The average cost of a cappuccino in a fancy coffeehouse served by a barista is over $4. If you had one every day on your way to work, your cup of coffee would cost you $1,000 per year. That’s 20% of the Roth IRA contribution limit for someone under the age of 50. You can brew your own at home before your leave for pennies a day. If you worked 40 years, invested that money instead, and earned an 8% annual rate of return, that $1,000 you were spending per year on coffee could have netted you over $259,000 by the time you retired. Now that’s an expensive coffee habit!


With smoking costing between $4 and $5 per pack, a two pack a day habit can be incredibly expensive if you add up over the course of your working life. The numbers are truly staggering. Two packs per day costs $70 per week or $280 per month. That equals $3,360 per year and $134,000 over 40 years. Giving up a two pay per day smoking habit could give you enough money to fund 67% of a Roth IRA. Just think about how much extra money you would have if you even just decided to cut back on your smoking costs, and the health benefits would be an extra bonus too. You will increase your odds of being around to enjoy your retirement.

Energy Drinks

Energy drinks are the cappuccinos of a new generation that haven’t caught on to drinking coffee yet. Young Americans are drinking more and more energy drinks at an alarming rate. The problem is that these drinks are very expensive and cost over $2 per can. Many younger workers are drinking several of these drinks all throughout the day, and their costs can add up to serious money if you stopped to think about the to think about totals. It doesn’t hit you all at once because many of us buy them one at a time, but their cost creeps into our budgets and can play havoc with it.

Why You Shouldn’t Stop Roth IRA Contributions

Stopping your contributions to your Roth IRA can have a devastating impact on your ability to retire in the future. It is so important to try and keep investing for your retirement if at all possible regardless of how trying your finances become. Your retirement contributions should be one of the last items in your budget that you raid for extra income. When there is a recession or troubling times in your own finances it all comes down to the choices we make. Do you want to have creature comforts now and work until the day you die at a ripe old age? Or, do you want to prioritize your spending now to ensure that you have enough money set aside to have a comfortable retirement? There are so many other things that we can cut from our monthly budgets to make ends meet instead of reducing our Roth IRA contributions.

Photo by Tristan Kenney via Flickr

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