It can be difficult to make the decision to set money aside, especially if you don’t feel as though you have enough to be saving. However, no matter how much (or how little) you make, it’s a good idea to start saving money NOW.
Make Yourself a Priority
When I first married, my then-husband and I were sure that we couldn’t save any money at all. We figured we had cut all of our expenses to the bone, and that there was nothing left for us to do. We decided that we would start saving money later — when we had “enough” money to set some aside.
What we realized later was that we weren’t making ourselves and our future a priority. Even if you don’t have a lot of money, the truth is that you can see your priorities in where that money goes. You might only think you can spare $5 per week, and that it’s not enough to save. However, if you go ahead and save that $5 per week, you’ll start to see a subtle shift in your mindset. Make that savings a priority, and recognize it as putting yourself and your future first, and it will get easier. Chances are that you’ll start to see that can set aside more than that, and you’ll look for more ways to bolster your future.
The Longer You Save, the More Effective Your Efforts Will Be
The earlier you start saving, the more effective your efforts will be in the long run. Compound interest works best when you save consistently over time. The longer you save, the smaller the amount of money you need each month to build wealth. While you won’t build an adequate nest egg by putting $100 per month in a savings account, you can still get a good start. The more you save now, the less you’ll need to catch up with later. This is especially true if you incorporate investment accounts (like those through work) into your savings strategy. Any saving you do now, no matter how small, will benefit you later.
Get in the Habit
Developing good money habits is essential to your future. You can’t attack the symptoms of your financial problems and expect the underlying problem to be fixed. The same is true of savings. Get in the good habit of setting aside money for savings — and doing it before you do anything else — translates into a lifetime of good savings.
You don’t need a lot of money to start developing a savings habit. Start small and make it manageable. Don’t forget to start with the idea that you will increase how much you set aside as you move forward. Make it a point to put a portion of every windfall into savings. When you see a pay increase, take a percentage of that and save it.
It’s possible to make the habit even easier by automating your savings. This allows you to get in the habit of saving, without thinking about it. I like to have a set amount of money transferred from my checking account to my savings vehicles every month. This includes my Roth IRA, my quarterly tax payments account, and my long-term emergency fund (held in a taxable account), as well as the 529 for my son. If you work for someone who offers a retirement plan, automatically have money deducted from your paycheck to grow that account.
The only downside to automating is that you need to make it a point to review your automatic transfers a couple times a year to see if you can increase what you’re setting aside.
Don’t tell yourself you don’t have enough to set money aside right now. Start saving today, and develop a good habit that will benefit you for a lifetime.