Millennials need to start saving for their future now
As students, we face many obstacles in finances including minimum wage pay, student loans and building credit. Despite the lack of knowledge the majority of young adults have regarding savings, investments and how to manage money. It’s actually vital that we start learning now in order to have a more comfortable future.
“Getting an early start is the best thing you can do for yourself, even if you’re not able to contribute much”, said Mark Miller, writer for RetiredRevised.com. “When you’re in your 20s and 30s, you’ve got plenty of time to benefit from the magic of compound interest and allow the market to bounce through periods of volatility.”
A report published by the Boston College Center for Retirement Research analyzes how much people should save, addressing factors such as age and salary percentage.
They found that the earlier you start saving, the less percentage of your salary you will have to invest in, and essentially, the sooner you are going to be able to retire.
If you are a student that doesn’t have an employer that provides benefits and a retirement plan, the best way to start saving is opening a savings account and contributing a little bit of your paycheck to the account every month.
Young, lower-paid workers are most likely to contribute below matching contribution rates. A recent study found that 40 percent of workers in their 20s contribute below the matching rate, versus only 20 percent of those in their 50s.
Even though retirement seems far off for young adults, not saving money at a young age could drastically affect a person’s life later on.
According to US News, “Compound interest has plenty of time to accumulate when you’re young, so you should take advantage of it while you can.”
Tracking what you spend and limiting yourself to a budget each month also helps you not carelessly spend your income and ensures you have money set aside for all your bills and expenses.
It’s good to get into the habit now, instead of waiting and having to learn everything all at once later on when you have more responsibilities, not only financially but in every aspect of life.
The first is to start researching, reading and planning. We already do that in school, so it’s nothing out of the ordinary to research something that is beneficial to your life outside of class.
An article in USA Today analyzed a survey done by the non-profit Employee Benefit Research Institute, and found that almost a third of workers — 28 percent — say they have less than $1,000 in savings and investments that could be used for retirement.
Often people want to continue working until later in life, but the survey found that 50 percent of retirees left the workforce earlier than planned, and of those, 60 percent left because of health or disability problems and 27 percent because changes in their company such as downsizing or closure.
Sometimes, we cannot control what life throws at us. Events happen unexpectedly that could affect your career, your health, and the well-being of yourself or the ones you love.
Don’t wait until it’s too late to prepare for your future. Start learning and saving now to be prepared for everything that is to come in your life.
Opinion columnist Rebekah Barquero is a print journalism sophomore and may be reached at [email protected]