Looking for a simple New Year’s resolution that can make you wealthy? How about contributing an extra $10 per month to your retirement account? It doesn’t sound like much, but even a few extra dollars per month can mean thousands more in spending money in retirement. Below, I’ll show you what I mean with a few examples to help you find some extra cash if you’re struggling to save.

## $120 saved per year could mean almost $25,000 extra in retirement

One thing you always have to keep in mind when saving for retirement is that the money you’re contributing now is only part of what you’ll end up with. You’re investing those funds and, if you’ve invested wisely, your savings will grow over time. The longer the money remains in your retirement account, the more time there is to accrue investment earnings. That’s why your early contributions matter more than your later ones, and why even small contributions can make a big difference to your final balance.

If you were contributing $100 per month to your retirement account every month for 40 years and you earned a 7% average annual rate of return, you’d end up with a little over $247,000 in the end. But if you’d contributed just $10 more per month — an extra $4,800 over 40 years — you’d end up with close to $272,000. That’s about $25,000 more. Coupled with Social Security benefits and a frugal budget, that could be enough to see some people through one more year of retirement.

Most people aren’t going to be able to retire comfortably saving either $100 or $110 per month, but this example illustrates how big of a difference a small amount of money can make. A single $5 or $10 bill in your wallet may not seem worth investing, but you’re usually better off investing that small amount now rather than waiting to contribute larger amounts later on, when you think you’ll have more money.

We know from the above example that $10 per month for 40 years is worth about $25,000 with a 7% average annual rate of return. If you’d decided it wasn’t worth saving $10 per month and you put off retirement savings for 10 years, you’d have to save a little over $21 per month for the following 30 years to end up with the same $25,000 final balance, assuming you earned the same rate of return as our previous scenario. That would require you to contribute $7,560 of your own money — $2,760 of which you could’ve kept in your pocket if you’d just started saving $10 per month 10 years before.

## How to find more money to put toward retirement savings

Sometimes, increasing your retirement savings is as simple as just transferring your extra cash from your savings account to an IRA or increasing the deferral percentage on your 401(k). But if you don’t have extra money just lying around, you probably have to make some changes to your budget.

With the new year fast approaching, now is a great time to make a new budget for 2021 and build your retirement savings into it. Review your bank and credit card statements from the past year and decide how much to allocate for your essential expenses and discretionary purchases. Try to keep nonessential costs to a minimum and put whatever’s left over toward retirement.

You can also seek out ways to increase your income, like trying for a promotion, switching employers, or starting a side hustle. Save some of this extra cash to spend today, if you’d like, or stash it all in your retirement account to help you reach your goal even faster.

## Don’t stop at $10 per month

Contributing an extra $10 per month to your retirement account is a good starting point, but don’t feel like you have to stop there. If you haven’t already, do the math to figure out how much you need to cover all of your retirement expenses and how much you must save per month to reach that goal. A retirement calculator can help. Then, do your best to set aside at least that much per month or redo your retirement plan until you come up with a monthly savings goal that’s achievable for you.