Start Saving

Not all of us are born from a wealthy family. For majority of the world’s population, saving money at a young age is the only way to get a decent retirement. This may mean just enough money to pay for hospital expenses or for other medical bills in case of health emergencies.

So what age is the right age to start saving? The ideal answer is as soon as the day you were born. However, not all of us have parents who can afford to start a savings account for their new born. If this is the case, the ideal time is when you start earning for yourself.

Whether this means saving a dollar for every chore you accomplished at the age of 5 or setting aside some money after you graduate from the university, saving is a wise financial move that will benefit you in the long run. This brings us back to the question. How can you save as early as possible?

For parents, it is a good practice to teach your children how to save as early as possible. For individuals who wish to save for retirement or for future emergencies, it is best to follow these simple tips.

For example, if you know you have the tendency to splurge on shopping and other miscellaneous expenses, it is best to address the root cause of the problem. Reflect on the reasons why you feel the need to overspend on items so you can put a more sustainable solution to it.

Do you plan on making a long term savings? Do you wish to use the money for a future plan to travel? Knowing the reason why you want to save can help you design a better savings plan for your purpose. Banks offer various ways to save money so knowing how long you wish to keep the funds will help determine the kind of savings that you need.

This is in connection to the previous points. Deciding whether it’s for long-term or short-term savings will help determine the future of your finances. For example, long-term savings may mean you will need a steady source of income in the next five years or so to sustain the savings.

On the other hand, short-term savings may mean you wish to accomplish a goal in the next six months or so. Generally, setting a short term goal does not require the same amount of investment as that of a long-term one. However, anticipating the length of time helps put things in perspective as far as your finances are concerned.

If you are serious about your savings plan, your discretionary income is the first thing that you have to factor in. Also known as your disposable income, this money is what you have left after all the loans, mortgages, taxes, bills, and living expenses have been paid for.

Experts suggest that people with lesser discretionary income should start saving as soon as possible to reach their long-term or short-term plans. On the other hand, people with more discretionary income to spare should resist the temptation of using it to upgrade their lifestyle. Instead of doing so, this is the right time to save more for the future.