Time to Start Saving for the Future NOW

By: Dustin Parr

Start Saving Today
The sooner you start saving for a goal the sooner you will reach it.  If you started contributing $3,000 each year for retirement at 35, by 65 you will have earned $400,000. If you waited until 45 to contribute $3,000 a year, you would have saved $163,463, which is less than half of the amount than if you started at 35. This does not mean that you missed the boat if you are over 35; It just means the right time is NOW to start saving.

Save To Eliminate Future Debts
Most Americans do not have enough saved in an emergency fund to cover a $1,000 expense. This has increased the use of credit cards to cover health care expenses or auto/home repair bills. With average credit card interest rates of 17.2 percent, late fees can make accumulated charges even higher.

This means that a $1,000 expense can end up affecting your savings even more if not paid off promptly. If you do not currently have an emergency fund, start one and begin contributing to it today.

Set a Financial Goal   
As with most things, It is important to have a goal in mind to help you succeed in saving. Your savings goal can be anything:  a car, vacation, retirement or building an emergency fund. To help make this attainable, set milestones and then celebrate when you achieve them.  For example, to save $1,000 in an emergency fund, you might choose to decrease your eating out to once per week instead of three times. When you hit this goal, reward yourself by going to your favorite restaurant.

Automate your Savings
Anything you can do to make savings an automatic function will help you save more. If you have a retirement account at work, contribute to it. Usually, these funds can be taken out of each paycheck.  Many companies offer free matching to your contributions.  This is free money!  Taking advantage of it is basically giving yourself a raise. If you do not have enough room in your budget to take advantage of the entire match, no problem. Start today with what you can, knowing next year you will contribute more.

Resources
Kleingeld, A., van Mierlo, H., & Arends, L. (2011). The effect of goal setting on group performance: A meta-analysis. Journal of Applied Psychology, 96(6), 1289-1304.