At one end of the expenditure spectrum is the collection of here-and-there miscellaneous purchases that barely seem to count.
But it's a case of the sum being larger than its parts. For instance, if you give up that $2 cup of coffee you grab every day on your way to work and your twice-weekly $10 lunch-out habit, you'd save about $120 a monthly. A year of doing that translates into around $1,500.
If you put that extra $1,500 every year into a stock fund through your 401(k) plan, after 10 years (assuming a 7 percent rate of return) you'd have an extra $21,000, thanks to the magic of compounding interest. If you left it there for another 10 years without adding another dime, it would grow to more than $43,000.
Another area in the budget where there's potential savings is typically people's biggest budget item: housing. Sullivan said that because many 50-somethings have grown children who are on their own, downsizing to a smaller home now instead of waiting until after retirement can be a great way to reduce your housing costs.