Start Saving Now, Even If You Don’t Have Long-Term Financial Goals
How do you see yourself in five years?
Some of us may give a clear answer, but many of us do not know whether we will work in the same company (or even in the same industry ), whether we will live in the same city or city. if we are single or partners, and so on.
This makes financial planning difficult. Is it worth saving up for a down payment if you currently live in a city where house prices are much higher than what you could ever hope for? Is foolhardy to save money on wedding or education of future children, if you are even with no one to meet – and are not even sure whether or not you want marriage and children?
For those of us struggling with debt and student loans, and / or those of us who may have faced multiple layoffs, low wages, wage stagnation or underemployment, the very concept of saving for long-term financial goals may seem like risky. – or funny. It is difficult to plan for the future when you are trying to figure out how to pay for today.
If any of this sounds like you, you are not alone. As CNBC reports :
According to TD Ameritrade’s 2018 Millennial and Money Survey, conducted by TD Ameritrade, twenty-five percent of millennials are not planning to get married, and 30 percent are not planning to have a child.
In addition to cultural changes, the economic climate has swept away important milestones for many young people. As wages fall , so does the cost of childcare , medicine and education .
According to a TD study, about 30 percent of millennials do not expect to retire, and a quarter say they will never buy a home. “Most millennials no longer believe there is any long-term security,” Brobek said.
However, CNBC advises millennials to start saving anyway. Even if you can only save a little each month. Even if you don’t know what you will spend your money on. Even if you never imagine buying a house or paying for a wedding. Even if you don’t think this economy will ever allow you to retire.
Why? Because saving money now, especially at a young age, will pay off in compound interest, especially if you invest some of that money instead of hiding it all in a savings account. In a world where many of us rarely get a raise that exceeds the cost of inflation, investing is often one of the best ways to increase our net worth over the long term. (My Vanguard’s investment, which currently stands at $ 83,878.64, is up $ 1,896.37 in the past month .)
Saving money now will also give you the freedom to make future choices. Maybe you still want to buy a house. You might want to take maternity leave (time you won’t get otherwise with our current parental leave policies), or take a leave to travel the world. You may someday even take advantage of some of these savings when you retire.
If you need something else to convince of the savings benefits early on, CNBC does the math:
If you invested $ 5,500 a year to retire between the ages of 25 and 35, almost $ 620,000 would be expected at 65 . $ 556,000).
Of course, retirement money may not be available until age 59 1/2, but there are many investment options beyond retirement accounts – and the mathematics of complex income works the same whether you open a brokerage account, work with a robot advisor, or use one. from countless personal investment tools.
Therefore, I will ask you again: how do you see yourself in five years?
Or, more importantly: where do you see your money?