SAVINGS AND INVESTMENTS Now that I’ve scared you back into your mother’s womb, let’s talk about some serious business.
After all of those costs, how do I save?? Great Question. The answer is BARELY. In the beginning at least. But you should really try to start saving for things like retirement, an emergency fund, vacation fund, as well as consider investing opportunities sooner than later.
This approach varies from person to person. I have friends who decided to hold off on starting up a 401K through their job. More money in their pockets now and less in the future. Everyone is entitled to their opinion. My opinion is try to push through this mindset or else it might take you a lot longer than expected to start saving. I have friends, three years out of college whom have still yet to start saving, when they said they only need a few months. They wish they would have started earlier.
Finance guru’s usually recommend you should save about 10% of your paycheck between retirement and savings. I say, that would be nice, but when you just walked into the real world and are overwhelmed with the debt you just landed in, it’s okay not to hit the 10% right away. Even 1% is better than none.
I urge you to start saving because many companies actually match what you contribute, up to a percent of your pay. Let’s say you put away 50 bucks a paycheck to retirement and you company matches 1:1. You’ll have double your contributions in a year! On the other hand, if you contribute $0, well then they give you $0. The 1:1 concept still applies unfortunately.
If you cut back on eating out, brought down utilities, transportation costs, rent costs, etc. and still cant afford to put money away for retirement, then make sure to at least start an emergency fund. Why is this so important? What is your plan if your company goes under, or decides to lay you off? Hm. Didn’t realize that was a thing? Yup, it happens all the time. I know plenty of people who went through this. It’s a scary thought, but its a normal course of business and you just have to be ready for the unexpected.
Now, some things to consider down the road are investments in stocks, bonds, and mutual funds. In more recent years, microinvesting has also been on the rise. This route allows you to enter the stock market with little capital. The options are endless so it’s never too early to start researching how to make your way into the investing game. Even if you don’t invest now, educating yourself in this area will give you the knowledge needed to match up to those who have never understood the struggle. No matter what route you end up taking, investing can be an interesting experience.
All in all, long term investments are usually a fruitful experience. But be wary, losses can occur as well.
Take Risks. If you win, you’ll be happy. If you lose, you’ll be wise.
Ain’t that the truth.