Strategies for catching up on retirement savings when you’re in your 40’s. Creating a budget is key to maxing out your contributions. 

I recently returned to work after being laid off in 2008 and am enjoying the steady paycheck and return to full-time benefits – especially a retirement savings plan. When you’re living paycheck to paycheck on what your husband brings home (on a reduced salary), plus a few freelance writing gigs, thoughts of stashing away anything for your golden years obviously disappear.

Since my husband and I are both in our early 40s, we’re now realizing we need to get back on the retirement savings track quickly. We have saved some retirement money but it’s definitely not enough to live comfortably. We also have two young children so balancing our monthly expenses with what we can reasonably save is the biggest challenge.

Financial advisor, Derrick Kinney, a Principal of Derrick Kinney and Associates, says his personal finance advice to his clients is that a budget should be your best friend.

“You need a set monthly plan that accounts for all your basic expenses, saving for retirement, saving for college,” says Kinney. “It’s important to separate your needs from your wants.”

So putting the kibosh on buying my lunch every day and my husband’s frequent electronics purchases should definitely be the first step in trying to cut down on our wasteful spending. Next would be tracking where the rest of our money goes. Kinney says to take advantage of online budgeting websites and smartphone apps that connect to your accounts and track your spending.

Online calculators are also available to figure out how much money you will need for retirement savings. You should factor in your retirement age, rate of inflation, the longevity of your retirement and your expected expenses, including increased medical costs.

It definitely sounds complicated, but Kinney says a good rule of thumb is to plan to live on 80 percent of your pre-retirement income. When you’ve figured out the amount you’ll need to save, use that number to create realistic yearly goals.

In my case, since we’re going from one income to back to two, he says to just save as much as we can, meaning we should both contribute enough to our company’s plans to take full advantage of any matching benefits. One of his frequent tips is to put any raises right into your retirement savings because you can’t miss money you never see.

Once you have some money saved, investment is necessary to keep it growing. Kinney says don’t be afraid to take risks if you’re over 40.

“The market does fluctuate but overall it has a pretty good track record and still remains a good bet against fighting inflation,” he says.

After maxing out your contributions to 401(k)s, 403(b)s or IRAs, investing in mutual funds or exchange traded funds should be your next move.

When you have your retirement savings plan in order, Kinney says saving for your kids’ education should be the next priority. Consider setting up a 529(b) or an educational IRA so that your money will grow tax deferred.

To keep budgeting and saving from turning into a drag, hold a family financial meeting each month to track your progress and reward yourselves for making progress. Maybe a family outing is in order – with a coupon of course.

“If you try to make it fun,” says Kinney, “you’re more likely to keep going and eventually reach your financial goals.”