Save early and often
In your 20s, you have a small window of opportunity to wield the power of compounded interest. Consider this: If you save $3,000 a year when you're between 20 and 30 years old, put the money into an IRA with a 7% average annualized rate of return and never save again, you'll have $442,000 by the time you're 65, calculates Nicole Rutledge, a certified financial planner with Resource Consulting Group.
However, if you wait to begin saving until you're 30 years old and put in $3,000 each year until you're 65, you'll end up with only $283,000 at the same rate of return. That's 35% less than if you had just saved the money in your 20s, even though you'd have put in more than three times the amount of money.
So save regularly now. Skip a pizza or a couple of pitchers of beer a week and save for emergencies and retirement. Just save.
Save early and oftenIn your 20s, you have a small window of opportunity to wield the power of compounded interest. Consider this: If you save $3,000 a year when you're between 20 and 30 years old, put the money into an IRA with a 7% average annualized rate of return and never save again, you'll have $442,000 by the time you're 65, calculates Nicole Rutledge, a certified financial planner with Resource Consulting Group. However, if you wait to begin saving until you're 30 years old and put in $3,000 each year until you're 65, you'll end up with only $283,000 at the same rate of return. That's 35% less than if you had just saved the money in your 20s, even though you'd have put in more than three times the amount of money.So save regularly now. Skip a pizza or a couple of pitchers of beer a week and save for emergencies and retirement. Just save.
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