Reasons Why You Should Start Saving Early in Life
When in your 20s you may not earn a lot of money, but there is one thing that you have that makes your prospect of becoming rich higher than the older folks, and that is ‘TIME’. With timing as your strength, savings becomes a rather pleasurable task.
In fact, anyone nearing their retirement age will confirm to this, that as the years slip by building a nest egg that would suffice to your future needs, becomes more and more difficult. You may think that you have a lot of time in your hand, but why to put off the plan for tomorrow, when you can start off today. Moreover, for most of us the saying stands true that ‘tomorrow never comes’, hence start early, and reap the benefits of your savings in the later part of your life.
How to Start Saving Early
Understand the Magic of Compound Interest
Albert Einstein has said, “Compound interest is the eighth wonder of the world”, and this is probably the one mantra that will help you raise your saving standards.
The concept of compound interest is not as complicated as the name might sound. What it simply means is that you get interest on your original investments, and in addition to that you will also receive interest on all the interest, dividends, and capital gains that you start accumulating as the years go by, and you keep rolling the money.
Avoid Loans and Debts
Yes, credit card has become one of the necessities of living, but a little bit of caution and effort to avoid consumer debts is going to take you far in terms of savings.
It is difficult to build wealth if there a leak in your savings, and that is what auto loans and credit card debts do. However, if you manage to repay the credit card amounts within the due date then you would never have to lose money on interest, on the contrary, will enjoy the benefits of reward points.
Invest in Self
Investing in stocks, depending on the price of bitcoin and more are promising in terms of revenue growth, but these options also come with a lot of risks.
Rather, if you invest a considerable amount of money in your personal, professional and financial growth, it would prove to be an intelligent decision. Investing in yourself means you will never lose. You can do a certification, go for higher studies, or even change your career midway, it is always considered a logical way to grow in life.
Though the future might sound as too distant, but can be full of surprises. Hence, it is wise to prepare yourself, no matter how the future turns out to be. Savings early is like taking singles, and before you know it, you will realize that you have managed to hit a home run.