3/19/2012 5:45 PM ET|
Why you should start saving now
Putting it off means having to save -- and sacrifice -- more for retirement later. Look into almost-painless and automatic ways to get your savings growing.
When you're a kid, being an adult seems a long way off. As we get older, we realize that time moves much faster than we once thought. When it comes to retirement, we need to have this perspective. If you're just getting started on saving for retirement, great! If you haven't started, then right now, meaning today, is the right time for you to start. It may seem like an impossible task no matter where you are in the process, but if you make a plan and keep to you can start building your retirement right now.
Just a couple of fast-food trips
The global economy is still not doing well, but many of us still buy things, go out to eat and splurge on small purchases. There's nothing wrong with this, unless you're just spending money and thinking you don't have enough of it to save.
Building up your savings account can start with deposits as small as two trips to your local fast-food restaurant. If you eat out every day for lunch, you can pack your lunch a few days a week and put that money into your savings. Don't think that will make a difference? If you cut out $8 a week from lunches each week for five years, you would have more than $2,000 in your savings account. That's not a lot of money for savings, but it's a lot of money when you consider that you're not giving up much to keep it.
Banking tools make it easy
Banks are all about savings right now; at least they talk that way. Many bank commercials tell you how to automatically save money with your debit card or through automatic savings plans.
Online tools and automatic savings plans have made it easy -- and almost painless -- to put money away. Does your bank have a plan where you can round up your purchases to the nearest dollar and put the additional money into your savings plan automatically? If they do, and you find it hard to save, this may be the best way for you to save.
If you'd rather control how much money is going into your savings account, you can set up a simple automatic deposit each month from your checking account to your savings account. This simple step will add up if you stick with it year after year.
Compound interest is your friend
If you're putting money in a low-interest savings account, that's fine for getting started. But after a while you should consider moving your money into an investment account where it can earn more money. Investment and retirement accounts will allow your money to grow through compound interest.
The more money you have in an investment account, the more it can be invested to make more money. When your initial investment earns capital, those earnings can be automatically reinvested to make even more money, thanks to compound interest.
One investment alternative is a 401k retirement plan. Instead of having your money sitting in a bank account earning less than 1% a year, you can put it in a 401k where it will earn much more. There's much more to 401k's than we can discuss here, but keep in mind that the best way to boost your savings is to let your money build on itself through compound interest.
Anything is better than nothing
Whether it's an automatic draft schedule, debit purchase round-ups or whatever savings path you choose, remember that anything is better than nothing. You won't have a dollar in your savings account later if you don't start putting in some change now.
Saving money is not just for rich people. In fact, the wealthy can be just as bad with money as anyone else. Saving money is something we all should try to do, and something we should all make a priority.
The bottom line
Think of an amount you know you can handle each month, and commit to saving that amount for six months. Use your online banking tools or other resources to do it automatically, so you don't have to think about it. At the end of the six months, increase the amount if you know you can save a little more.
If you're consistent, you'll start seeing your savings account grow. With a little discipline, you'll be on your way to saving real dollars for retirement.
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So, everyone complains about how horrible saving is, well, what is your plan then, wait for the government to take care of you?
Be accountable and responsible for your own future!
I quit smoking 5 years ago. yay! I was spending about 35 dollars a week. i started putting 20 dollars away into an ING savings account that transfered automatically from my Chase account. I upped the amount every other month and before long i was saving three hundred and forty a month. I paid for my daughters wedding the day she was married, I bought my son a car and paid it off and I just put a down payment on a house. It was easy and painless, I went without some things, I did without fast food for the most part, I think before I spend, and I still manage to have the things I need, ie: water, electricity, phone and cable. It is a game anymore to try and find ways to save. It is remarkabley easy once you see your money start to build up. Oh, and i quit smoking!
I don't know about any of you guys but all my cash is going in to my car's gas tank right now and my refrigerator at home. You want to know my retirement plan, its called work till I die. Not bad if you enjoy what you doing. What the hell happened to this country. My grandmother was a cashier at a breadstore. Worked there majority of her life. She retired with a pension in 1990. From a fn breadstore. Now its all 401k match, what a fn scam.
@Mick - "Saving should be a standard part of your thinking as living beneath your means is the key to wealth." Totally agree. I am so tempted to expand my perception of what is necessary each time a financial windfall comes my way (not often). In a society where so much of the economy is based upon consumption, I seldom hear the term "durable goods" any more. Merchants hawk "extended warranties" at the checkout stand. I usually pass. I know that the item is going to breakdown, well before it should. I believe the saying is true, "They don't make it like they used to..."
Trying to instill the idea of savings (retirement) with a college child. Uphill battle at best.
The use of the word 'will' instead of 'could' is irresponsible at best, especially with the knowledge of widespread fraud and abuse within the stock market. I just don't understand how anyone can see it as anything other than gambling after the Goldman Sachs debacle last week.
Better diversify. The old logic that 401ks robotically provide positive returns over time is unsound. All investment involves risk, and risk means risk of LOSS.
My ex spent all of our retirement money on his pregnant girlfriend so, at the age of 61, I have nothing but a pile of bills, threats from collection agencies and a terribly depressing job with no benefits. Please, tell me how to save for retirement. I'm tired of being tired all the time and never having enough to eat.
I understand, it's no secret tough times have affected many of us. What seems funny to me is...I wonder just how many of you ripping this article apart are sitting at home, on your computer, on the internet?
You complain about not being able to afford basic necessities: gas, healthy food, etc, and a lack of funds to put away toward savings, yet you pay out the @ss for the availability of the WWW.
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