For many things in life, the earlier you start doing it, the better for you. The same applies to making and saving money. You should start saving money the instant you start earning them. There are many reasons why you should start saving money at a younger age. Some of the reasons why you should start saving money at a younger age are discussed subsequently.
You will learn to save early
The first reason why you should start saving at a younger age is that you will learn to save. While those who plan to start saving at a later age are still learning how to save, it would already become a habit to you. Based on this, the saving will never be a problem for you. It would just be a normal thing that you have been doing all along. Where your age mates at 30 are still struggling to be saving 10 per cent of their income, you might already be saving 20 per cent of your income without issues if you started saving at age 20.
When you start saving at an early age, you would be under lesser pressure. Imagine that you wished to have saved a million-dollar before the age of 60 when you hope to retire. If you should start saving at the age of 20, you would just need to save 25,000 USD every year, which is less than 2,100 USD per month to achieve your goal of 1 million USD. If on the other hand, you start saving at the age of 40, you would have to be saving double that amount to meet your target. If worse still, you are already aged 55 and 5 years to retirement before you start saving, you would have to save 8 times more. If you couldn’t save 2,100 USD per month, how you save 16,800 per month with a lot of other expenses and bills you might be paying. This could even be more challenging if you still have kids and other relatives that are still dependent on you.
Chance of Saving More
It would be easier to save more money if you start saving earlier than when you start saving earlier. If you plan to save 1 million USD by retirement at the age of 60 and you start saving 2,100 monthly at the age of 20, you would find it easier to increase to 3,000 USD at the age of 30 and 4,000 USD at the age of 40. If, on the other hand, you are just starting at age 40 or after, you might end not being able to suddenly start removing over 4,200 USD every month from your earnings. If you force it, you might end up saving nothing as you would find yourself going back to spend your savings by the middle of the month. You can read freedom finance reviews to see the experience of people who have been saving from the platform and tips on how to save.
Protected against terminal emergencies
When you start to save early, in the event of an unfortunate event that cripples you or makes it impossible for you to work for a short or long term, you would have some money to fall back on till you are okay. If, on the other hand, you were waiting for the perfect time to start saving and such an incidence occurs, you would find yourself completely stranded.
Safety from emergencies and loan
If you have savings, you can always fall back to it whenever you have an emergency. With the discipline you had been using to save the money, you could assume you are borrowing from the money and then you pay back later. As opposed to being forced to take a loan, you won’t have to pay back with interest. Even if you decide to pay back with interest, the interest will still be yours to use in the future as opposed to paying it to a loan company.