"Don't wait until you have money to seek counsel," financial planner Michelle Perry Higgins tells PEOPLE
Saving money
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Most Americans say they need to catch up on their retirement savings, according to a 2019 survey published by TD Ameritrade. Millennials feel a pinch mainly due to the high cost of housing, while Gen Xers and Baby Boomers blame inadequate income, according to the survey.

If you feel behind – not only on retirement savings, but also for an emergency fund, a down payment on a house or your children’s college tuition – here are some suggestions from financial advisors across the country to help you get caught up quickly.

1. Get Real About Your Spending

“Most people are not going to save enough because they really don’t understand where their money’s being spent,” says Wendy Terrill, a retirement planning consultant and the founder and CEO of financial planning firm Assurance & Guarantee in Graham, North Carolina. “They’re shocked or surprised to see how much of their spending is frivolous or wasteful spending.”

To get a handle on this, says Terrill, track all your regular monthly income and expenses for at least a month, but ideally a few.

Use a free online tool such as Mint, which seamlessly tracks and categorizes all credit card and banking purchases, suggests Wendy Barlin, a Los Angeles-based CPA. (Similar services include You Need a Budget and Clarity Money.)

Barlin was shocked to discover she spent $3,000 on clothes in a year, since she rarely went to a mall but mindlessly shopped online.

“When I printed this report, what an eye-opener for me,” Barlin says. “I would never in a million years would have realized that if I did not print that out. And every single client that I work with has a black hole like that.”

2. Live Beneath Your Means

“Saving more than you spend will give you the opportunity to max out your retirement plan, build that emergency reserve, pay down your mortgage, and save for your children’s college,” says Michelle Perry Higgins, a financial planner and principal of California Financial Advisors in San Ramon, California.

If your paycheck is already stretched tight to cover the essentials, even after cutting out the aforementioned “black holes” in your spending, be sure you at least fund your employer’s 401(k) plan — and maximize the company match “so you don’t miss out on this free money,” says Higgins.

3. Make Saving Automatic

Force yourself to fund the 401(k) up to the maximum match, or if you are self-employed, be sure to contribute the most you can to traditional IRAs or Roth IRAs. “It is easy to put savings on the back burner when you have other near-future purchases,” says Higgins.

The easiest way to do this? Before you even see your paycheck, have a portion sent directly to your account. “No one ever really builds wealth through saving money manually (meaning, budgeting and writing checks,)” says David Bach, a bestselling author and financial advisor who came up with the simple concept of the “latte factor” — that automatically saving the money you spend on a fancy coffee and muffin each day (or a monetary equivalent you can live without) and investing it wisely can add up to $1 million in several decades.

4. Start Investing – Even a Small Amount! – as Soon as Possible

If you’re willing to invest money in a stock market account, Bach says, compound interest (which is when your interest earns interest, allowing you to save less up front) will pay off big-time in the long run.

While no one can predict the stock market, Bach says a 25-year-old who starts putting away $10 a day in an investment earning 10 percent a year could have almost $2 million by age 65. (It might sound high, but it’s actually based in fact: From 1975 to 2018, a diversified portfolio of 60-percent stocks and 40-percent bonds has had an annualized return of 9.9 percent, says Bach.)

“It’s so much easier to become wealthy when you start when you’re young,” he says.

Beware of investment funds with fees, and if investing in mutual funds, try to find low-cost, no-load funds, says Higgins. “It is important to be aware of the fees and commissions you are paying on your investment funds as these directly cut into your returns,” she says.

5. Don’t Fear Getting Help from an Expert

“My greatest joy is when I get a call from one of my clients’ children and they say, ‘I really don’t have a ton of money right now, but I want to be financially set. Can you help me do this?’” says Higgins.

While many financial planners won’t meet with you until you have a minimum account size, other firms, like Higgins’s, offer financial planning for all.

Midsection Of Woman Putting Paper Currencies In Purse
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“Don’t wait until you have money to seek counsel,” she says. “Find a good financial planner to help you build a financial plan and set your goals. Once you have goals it makes the process a lot easier.”

6. Increase Your Income

“In order to save money, there must be a source of funds,” says Higgins. “You have to have money to save money.”

If your regular job isn’t allowing you to save, think about a side hustle, such as tutoring or driving for Uber or Lyft. The podcasts Side Hustle School and Side Hustle Show have hundreds of suggestions on how to make more money from a side hustle.

“I tell people, stop watching so much TV and get that second job or do that at-home business,” says Terrill. “You know, people don’t become millionaires by sitting on their butt.”

7. Buy a Home — Within Your Budget

“You can’t get rich renting,” Bach says. “The latest stats are that homeowners are 46 times wealthier now than renters.” Purchasing a home when you are in your 20s, 30s or 40s and paying it down, Bach adds, “leaves you with a whole lot of money in the home in terms of equity.”

Mortgage rates are currently at historic lows, which makes this a great time to buy property if you’re considering it. Higgins recommends putting at least 20 percent of the cost of the house as a down payment – but more importantly, making sure you can afford the total monthly costs of the mortgage, insurance and property tax. “As we all know, owning a home is a large financial commitment that takes planning,” says Higgins, who notes that the investment in her home in the Bay Area has paid off.

8. Avoid Credit Card Debt

Credit card debt is easy to accrue yet “a dangerous game to start playing,” says Higgins. If you can’t pay off the entire balance each month, it can lead to “a difficult cycle of debt to get out of since interest payments on these credit cards can be extremely high.”

For example, if someone has a $10,000 credit card balance with a 25% rate, they would be paying $2,500 a year on interest alone – meaning an extra $2,500 that isn’t even going towards paying off what you initially owed.

To avoid loading up on too much debt, limit yourself to one credit card, and only spend what you can pay off in that current month. “If you see yourself starting to accrue a balance, get that paid off quickly, lock that card up and switch to a bank card,” Higgins says. “This is much more difficult to overspend on.”