Roth IRA PicDid you make “Contribute to Your IRA” one of your new year’s resolutions? Well, you’re in luck, because here are the steps you need to take to start contributing to your IRA even if you’re on a tight budget.

When it comes to your retirement and mutual funds in your individual retirement accounts (IRAs), it can be overwhelming to figure out where to even begin. For those of you that know me, I’m all about action steps, albeit gently. I’ve put together key questions and action steps. These will guide you on how to start contributing to your IRA.

Do you have old 401ks or more than one IRA, including ROTH?

If YES – pick one mutual fund company such as Fidelity or Vanguard and roll over and consolidate all IRAs and old 401ks to one place and one statement.

Do you have more than 10 mutual funds in all your 401ks and IRAs?

If YES – be ruthless and pick one large cap, small cap, international and bond mutual fund. Start with these 4 and then eventually add other sectors such as real estate or emerging markets, as an example.

Do you have any IRA savings?

If NO – stop immediately and run to T. Rowe Price. You can open a ROTH IRA for either $1,000 or just $100 if you agree to their systematic purchase which means you contribute $100 each month automatically. You also get the benefit of dollar cost averaging.

Do you have any regular savings?

If NO– you want to rejigger your budget and find an extra $100 minimum per month. Put  25% of that amount into a separate savings account until you have the minimum for a ROTH IRA.  Rather than making excuses, you’ve now created two savings accounts!

This post was originally published on Down To Earth Finance.