Don’t let this happen to you. During a discussion of the retirement savings options available to the employees of T. Rowe Price, a woman at the back started knocking on the table in front of her, asking to be heard by her fellow employees. She shared to her mostly newly graduate colleagues that after she graduated from college she thought that saving for retirement would be easier once she paid off her student debt. Then she fell in love, so she saved for a wedding. Then of course they needed a house so her savings went into building a home for them, and then came the kids and the money went to them till the kids were in college. Easier never came and 30-years after college graduation she doesn’t have any money saved for retirement.
You might be thinking how are we going to save when there are school loans to repay, rent checks to write and professional wardrobes to purchase—all on a ramen-noodle budget. Add to that any credit card debt accumulated while searching for employment and it’s easy to see why long-term savings often take a backseat to more immediate financial needs in young adulthood. But all these should not stop you from making that first step towards financial freedom and towards financial security.
You just need to learn how to manage your money, which on hindsight might be easier said than done. But it is doable, that is the key phrase, saving while you’re young might be hard but it is doable. You just need to know where to cutback and where to spend and where to limit.
For example you should limit credit card debts; it’s easy to build up credit card debt after you graduate from college. After all it’s very easy to make excuses why you need that Frappuccino from Starbucks because you’re stressed that your boss chewed you out during the meeting, or you buying that new smartphone because everyone has it. But what a lot of people fail to take note is that your plastics should only be used for true emergencies, other than that best keep it inside the wallet or inside the freezer.
Looking at houses for sale on Mcgrath.com is a good start to enter the real estate business by either renting out or reselling properties to earn money on the side. Real estate might be a risky business for some but it is a business which will never go away. People will always have a need for a home, a roof over their head and a place to stay.
Remember to have a long term and short term goals in saving. Those who have the savings habit down know how to set goals and follow them. They set targets, like paying for a trip or buying a home five years from now, and break those into smaller steps. Savers know how much they have to save each month to achieve long- and short-term savings goals, from this year all the way to retirement, and they use those goals as motivation to stay on track and avoid unnecessary expenses.
No matter how you look into it; know that the sooner you start saving and investing the easier it is on your budget.