For all too many of us we know that we should be saving for our future but we don’t. Every month we say we will start a savings account or put money away for retirement but it just never happens. We have become a materialistic society and the implications of that will be financially disastrous as we get older.
One of the easiest ways to save is to always remember one simple golden rule, “Pay yourself first”. Before you spend money on eating out, going to the movies or buying new clothes, set aside money for your future. It doesn’t have to be much, even a few dollars can add up over time. The most important thing is that you need to start saving now. Your greatest return on that savings, whether it is a savings account or a 401k plan, is going to come from the fact that returns on the money will compound over time. As you earn interest on an account or get dividends through stocks that money will add to the principle and continue to earn more returns over time.
Start out small. Make it a goal to set aside 1% of your weekly pay towards a savings instrument. To help encourage you to “pay yourself first” check with your employer to see if they offer the ability to direct deposit part of your paycheck into a savings account. Better yet, investigate your employer’s 401k plan where you will earn even greater returns on your investment. Often times employers will match contributions meaning that for every dollar you put into the account they will match it fully or a percentage of that dollar.
If you think that you don’t need to worry about starting a savings account or a retirement plan then think about this. What would happen if you were to become unemployed? What if Social Security isn’t going to be around? Are you counting on that pension plan your employer offers – what happens if they don’t offer it 10 years from now? All of these questions may seem “distant” to you now, but they can creep up on you without you realizing it. Being prepared now is better than worrying about it when (not if) they happen.
Many people will take $50 or more to a casino to gamble, yet they complain they don’t have enough money to start a savings or investment account. Maybe your dream is to hit the jackpot, but the reality is that you aren’t going to hit it. That $50 you spend at the casino every month can be worth thousands or tens of thousands down the road if you make regular, scheduled investments with that money.
The next time you are preparing the family budget take some time to find ways to start your savings plan today. Don’t worry about how little it is at first. You are taking a step, and that first step will lead to rewards that you may never have thought possible. You will be prepared for your future, no matter what life throws at you.