Five Steps to Growing Your Nest Egg

For those who need more ideas that can help aggressively jump-start your nest egg, the following options should help:

1. Indulgence tax: If you want to begin saving quickly, slap a matching indulgence tax on those things that seem to drain your money each month. That means that if you want that $3 cup of coffee each morning, you're also required to put $3 into your nest-egg savings. This will accomplish two things. First, it will make you think twice before automatically paying for all those treats that you have been giving yourself and will likely help reduce the amount you spend. Second, it will force you to save while still allowing you to splurge when you want to. This combination should help your nest egg quite a bit in the long run.

2. Live a raise behind: One of the easiest ways to build that nest egg is to live a raise behind. The next time a raise comes along, instead of increasing your lifestyle to meet the higher income, pretend the raise never came and continue to live on what you were earning before. Make sure to siphon off whatever the raise amount was into one of your retirement accounts. Continue to live a raise behind, and your nest egg should look quite healthy upon retirement.

3. Re-evaluate housing: Forget the McMansion and buy only what you need for your housing. If you have already own a big house, evaluate whether it is more than you really need and consider downsizing. Not only will the mortgage be less, but taxes, house upkeep and furnishing will also leave you with more money to invest. If you are thinking of a McMansion as a real estate investment, you'll likely get better returns by purchasing a house the size that suits your needs and then specific investment properties rather than a large house for yourself.