You didn’t believe it when you were a kid, but you totally get it as an adult: Time really does fly. What does that mean for your financial situation? Two things:

  1. The future and all its expenses are getting closer, faster with each passing day.saving for the future, saving for retirement, savings, nest egg, emergency fund
  2. If you’re not planning and saving for the future already, now is the time to start.

“Saving for the future” means, above all, “saving for retirement.” And the very best way to build your retirement nest egg is to make a lifetime commitment to saving. You CAN do it—here are some ideas for saving money at any age.

Saving rule #1: Pay yourself first.

At the heart of financial planning is your commitment to putting aside a portion of every paycheck. Nancy Mann Jackson of Forbes.com suggests these guidelines for meeting your financial goals:

Getting off to a strong start in your 20s.

  • Retirement is decades away, but now is the time to start putting money aside in a tax-advantaged IRA or employer-sponsored 401(k) plan. If your company offers matching funds, that’s free money for you—so be sure to maximize your contributions.
  • Pay off your student loans as soon as possible. Every dollar of debt is a dollar you can’t save.
  • Avoid credit card debt. When you make a purchase with a credit card, you’re essentially taking out an ultra-high-interest loan—as high as 25% or more. That’s not a problem if you pay off your balance each month, but too many people don’t, and it can take years to dig out.

Settling into life and career in your 30s.

  • Take stock of your retirement plan annually. Make sure your contributions and investment allocations (stocks, bonds, cash, high/medium/low risk) are appropriate for your goals. And if you change jobs, be sure to roll over your old 401(k) plan.
  • Make and follow a college savings plan. Time flies faster than ever when you become a parent—and when your kids reach college age, tuition will be even higher than it is today. Ask about the tax advantages of 529 plans.
  • Weigh the advantages of owning a home. Yes, buying your first home is the biggest investment of your life, but the returns can be rewarding. Talk to a mortgage provider about first-time homeowner programs. Your savings may pleasantly surprise you.

Focusing on the future in your 40s and beyond.

  • Stay smart about spending. Hopefully, your career is established and your compensation is on the rise. It’s natural to want to “spend up” (and it’s perfectly okay to treat yourself within your means), but when you make more, you can also save more for all of your goals.
  • Dial down your investment risk as you approach your 50s. Retirement and those big tuition checks are getting closer and closer—overexposure to higher-risk investments could jeopardize the money you’ve saved.
  • Talk with your parents about their financial outlook. Learn how well they’re set up to meet expenses for everyday living, long-term health care, etc., because those costs may fall to you.

A final word about saving money at every age: Financial advisors can be priceless in helping you make savings plans, but their assistance comes at a price. You should always feel you’re getting good value for the fees you pay. Talk to Pen Air today about how our team of financial experts can help guide your savings journey through all stages of your life.