Getting Started With Savings

Financial Boot Camp for 20-Somethings: Day 5 of 5

It’s time to get your money in order.

When you’re in your 20s, retirement seems so abstract, it might as well be thousands of years away.

Maybe it feels something like that to you right now. Why save for something so many decades in the future, when every last dollar is accounted for in the here and now? Saving for anything at all, in fact, may feel impossible.

But what if you just laid the groundwork so that it became easier to save a little something? That’s what we’re going to work on today.

Getting started early for retirement is smart for the same reasons you may want to put it off: Time is on your side. If you set aside what you can now, the magic of compounding numbers — when you begin to earn interest on interest — can do more of the heavy lifting over time.

In other words, saving early may result in having to save less over the long haul, which will take some pressure off as you’re juggling other demands that inevitably arise. Maybe those demands will be children and all the money they manage to siphon up, or perhaps you’ll need some time off to care for an aging parent.

And (mostly) nobody wants to work forever — the earlier you start saving, the sooner you can stop working and dedicate more time to what’s meaningful to you.

The easiest way to save — for everything, really — is automating. When you have money automatically and regularly shuttled to its destination, you don’t have to remember to do anything. That goes for purely pleasurable financial goals as well, like saving for a big trip.