What are the Benefits of Saving Early?
For many Americans, the art of saving is something that they have yet to master. This is especially true for those who have just entered the workforce or have gotten their first job. In this post, we have brought together some of our favorite benefits of saving early, and how it can set you up for success.
Get In The Right Mindset
As a new employee, you will probably be limited in your spending and saving habits. You will most likely have a salary, though it may be small, and you will probably have student loans, rent, and other bills or debts to tackle. This is why establishing a 15% saving baseline is a great way to get into the right mindset for your future self. No matter how high you get in the company, that 15% baseline will allow you to already mentally put that money away for the future, and your future self will thank you!
Create a Nest Egg For a Future Home
For many, one of the primary goals of their professional life is to purchase their first home. A starter home or a condo does not come cheap these days and saving towards this goal is a great thing to start early in your money-making career. If you are planning to own eventually or want an income property while you focus on your career, starting to save young is a great way to ensure that it can happen in just a few years.
Grow Your Emergency Fund
Whether it is a global pandemic that leads to layoffs or a parent or loved one gets sick; having an emergency fund is one of the best ways to save and protect yourself in the future. Most financial experts suggest saving up to three months of your salary, but naturally you can adjust as you see fit. An emergency fund is to be used as you need it, but make sure that you replenish the fund, or else it will be useless the next time you need some extra cash quickly. Starting small is a great way to get in the habit of saving for emergencies. Event $10 per pay period will start to add up.
Learn How to Budget
Finally, but most importantly, one of the best benefits of saving early is it forces you to budget. Budgets are a little intimidating, but at the end of the day, the key to financial success is making and keeping to a budget. There are plenty of tools on how to create and draft your budget but chat with a financial planner if you still want to fine-tune it to your needs.
One thing is for sure, someone who starts to save at a young age will never question their decisions down the line. Whether it is growing yourself a nest egg for a down payment or wanting to establish financial stability early on in your career, saving early and sitting down with a financial expert to guide your savings is a great way to set you and your finances up for success down the line.