Thursday, June 24, 2010

Am I Saving Too Early?

I was out for lunch today with some work colleagues who are the same age as I am.

As usually happens, we got to talking about our social lives which turned to a discussion {somewhat} about personal finance.  The general consencus was this: we’re too young to have savings.

Huh?  Really??  I own my own place, work the same hours and make relatively the same wage.  I don’t really deny myself many pleasures in life, but live on a budget, and save for big expenditures.  How can someone my age not be thinking about the future?  Not only am I putting money away for a lump sum mortgage payment, but also for taxes, discretionary spending and even retirement.

The only hole I see there is retirement.  I am in my mid-twenties, and hope to have many high-wage earning years ahead of me.  I hope to be married in the next 5-10 years, maintain home ownership, and travel a bit. Should I be focusing less $$ on retirement, and more on discretionary spending {which, btw, would be for weddings, gifts, travel, spending $$ etc…}??  Is this too early to start saving for my future?  Or is it never too early to do so?

I get that the mortgage and taxes all come with the territory of home-ownership.  However, should I look at it as a $100k nest egg, so to speak – and be happy I’m not paying rent, like they are, to live in a home that I couldn’t afford with a lack of savings?

HELP!  I don’t know what to do with my $100/ month that I’m saving for retirement.


Hugs,

*Canadian Girl

4 comments:

  1. It's never too early to start saving for retirement. I started at age 23, and wished I had started sooner.

    Most of my friends don't save for retirement either - not even the ones with good jobs. They say that we're too young... but the way I see it is - the sooner you start, the sooner you can stop!

    I would keep saving the $100/month into retirement, and then when your income increases in the future, you'll be able to save more than that, and never feel the pressure to save as much as you can into your retirement accounts because you started too late.

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  2. I agree with Krystal. Most financial planners will tell you the sooner you start the more your money will matter (compound interest). I started mine at 18, and honestly wish I started sooner!

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  3. This is a great post! I agree with the comments above for sure. While your friends may not be saving or think you should be "living more in the moment" I think you will have the last laugh when you have a comfortable savings built up and have the freedom to do what you want and when you want in the future. It is financially responsible of you that your saving now!

    You inspired me to write about this- check it out: http://storiesfromacountrygirl.blogspot.com/2010/06/to-save-or-not-to-save-that-is-question.html

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