According to a new report, 66% of younger Americans have nothing saved for retirement. But the good news is that there’s something you can do right now, today, to change it. Today, you can start taking charge of your financial future.
The first thing to do is to change your way of thinking. When you think about retirement, it may seem like a far-off day that will never come. That’s fair. Retirement is a long way off for most of us. And maybe you don’t think you’d ever want to retire. What would you do with the rest of your life, anyway?
But that’s exactly the reason to start saving now: so that decision can be yours and yours alone. Stop thinking about saving as “saving for retirement” and start thinking about it as “saving for the future you want.” If you want to work at your job as long as you possibly can, that’s great. But it should be your choice—not something you have to do because you don’t have savings. Maybe you’d rather travel, or do volunteer work. If you lay a solid foundation of savings now, you can build a better future for yourself—one where you can be free to choose how you spend your time.
Make these years work for you with the time value of money. The time value of money means that money gains value over time when you put it in an interest-earning account. If you put $1,000 in an account today, you’ll earn interest. In 10 years, your $1,000 will be worth quite a bit more.
But if you wait until 10 years from now to save that $1,000, you lose out on all the interest you could have been gaining in that time. Multiply that 10 years by 2 or 3, and you get the idea of how important that can be. When it comes to interest, time is money.
If you want the freedom to choose how your future will look, you have to start saving now. The first step is to know where your money is and where it goes. Create a budget (either with an app like Money Management or good old-fashioned pen and paper.)
Write down how much you make each month. Then write down exactly how much you need to spend each month. Include your rent, your utility bills, your phone and Internet charges, and any car loan or student loan payments you have. Then write down what you spend on groceries, eating out, and entertainment each month. If you’re not sure, keep track for a week of every penny you spend.
If you’re spending more than you make, figure out where you can cut back. Every dollar you can put into savings is one step closer to a future of financial freedom. If you can get a few friends to start saving at the same time, you can keep each other accountable and figure out some lower-cost ways of having fun.
Ready to take control of your money and build the best future you can? Why not bank with someone who shares your values and your passion for changing the world? If your employer doesn’t offer retirement plans, our IRAscan be a good option for saving no matter where you work. And we partner with GreenPath, a financial wellness firm that offers free financial counseling to our members.
So don’t miss out on the interest you could be earning right now! Check out our benefits of membership and find out how you can join our Credit Union family today.
This article should not be considered legal, tax, or financial advice. You may wish to consult a tax or financial advisor about your individual financial situation.