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Best catch-up strategies
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May 17, 2000: 6:04 a.m. ET
Ideas for 30-somethings who are just getting serious about cash conservation
By Staff Writer Jeanne Sahadi
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NEW YORK (CNNfn) - OK, you're no spendthrift but you're not exactly winning saver-of-the-year awards either. Life's expensive, and you're living it at full throttle.
But if you're in your mid- to late-30s, and have begun to feel a little underfunded for the long run, experts say there are some creative and fairly painless things you can do to make up for lost savings.
You've gotten in a groove, so stay there
You already know the easiest, most tax-efficient way to save is to max out your 401(k). But you're pretty sure you're going to feel the pinch if you sock away a full 15 percent of your pretax salary. With a little help, though, you still may be able to max out without missing much.
Remember that bonus or raise you've got coming? Put two-thirds of it into your savings, said certified financial planner (CFP) Judi Martindale of San Luis Obispo, Calif.
New York-based CFP Karen Altfest agrees. "Continue to live on your old salary," she said. "You lived fine last year. You don't have to spend everything you have."
If you take such advice, keep in mind that you don't have to pinch pennies. You'll have a third of that extra pay to indulge yourself.
If you're still not thrilled, consider this: There are no second chances with a 401(k). If you fail to max out one year, you can't make up for it the next or receive more in matches from your employer if you do double your contributions.
Don't let the tax man think you're easy
Remember, too, Altfest said, "There's life after 401(k)."
To build a smart savings portfolio outside of the office means setting priorities about how you save and making sure your investments are tax-efficient.
 If you want to save 20 percent of your salary, it can't all go into your savings plan at work. After maxing out the 401(k), set up a tax-deductible IRA or, if you qualify, a Roth IRA.
Your contributions to the Roth aren't deductible, but you won't pay taxes on your withdrawals. "The effect of the tax-free (withdrawal) is just overwhelming," said Memphis, Tenn.-based CFP Ray Brandon.
Beyond that, put your money into tax-efficient mutual funds, in which transaction costs and capital gains distributions are low, experts said.
If you're really anxious to breathe quick life into your savings, you may be tempted to make a big bet on some hot startup run by a 23-year-old with no track record. You're not alone. A lot of people think that in order to catch up they need to go out on a limb in their investments, Brandon said. But, he cautioned, "Don't catch up by just taking risk. Risk has a price."
And the perennial truth is that one of the best ways to save money is actually to save money.
It's the 'little' things ...
That's why eating out all the time and running to clubs and bars can be highlighted in your memoir, but they shouldn't necessarily be part of your daily life. No one suggests you live like a monk; just live like a person who knows how to limit indulgences that don't give back in delight what they soak up in dollars.
Saving just $20 a week for retirement adds up to $1,040 per year, or $50,000 over 25 years, assuming a modest 5 percent annual return, according to the American Savings Education Council.
So rather than forego dinners out or nights at the theater altogether, limiting them for six months can do wonders for your bank account, Altfest said.
She also suggests that you don't forget to take time off, either.  "Treat yourself to a nice vacation every year. You're working and you deserve it. But do you have to do it every weekend?" she said.
If you want to take that idea one step further, you might take a less expensive vacation every third year and put what you save into a retirement fund, Martindale suggested.
Received a gift? Let it keep on giving
The occasional windfall should also be treated judiciously. "Gifts from relatives can give you a good start in reaching your goals," Altfest said.
So if you get $10,000 from Grandma, Altfest recommends you take $1,000 and go skiing, and invest the other $9,000 for your future.
Speaking of family, if you're raising kids, the time is now to manage their expectations about getting money from their parents, Martindale said. She's seen too many parents whose retirement savings get hit because they feel obligated to throw a huge wedding for their daughter or who allow their kids to move back in after college.
And now, for some good news
Whatever remedies you choose, you can take comfort knowing that you're ahead of the game just for taking your savings seriously now.
A lot of Brandon's clients come to him when they're in their 50s. Ashen-faced, they tell him they haven't saved much for retirement. But what they have done is paid off the mortgage and gotten their kids through college -- no small feat in either case.
Nevertheless, they no longer have as much time for their investments to compound, and as a result they have to make some draconian spending cuts in order to catch up.
You may not be 25 anymore, but you've got a lot of years ahead of you. That's why, Brandon said, "People who are saving in their 30s are not behind at all." 
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