Let’s talk about saving. I know we are only in our early 20’s who even has enough to save? What am I supposed to do? Save $20 a paycheck in a savings accounts each paycheck? So that’s what, $480 a year I would save? No thanks I’ll just spend it!
Does this sound familiar? If so, it is probably because every time you hear the word “save your money” you think of how unrealistic that is for someone without a full-time job. Think about it, between transportation, food, clothing, rent, and entertainment each month it is almost surprising we get by each month without over drawing out bank accounts!
If you took $20-30 a paycheck, saving $500 a year is not bad. What if you could save $40 a paycheck? If you put that extra $80 a month (assuming you get paid twice a month) you would have $960 a year in your savings account. Do that for three years during your college years and you have $2,880 to your name! Nice right?
Instead of letting this money collect pennies in a bank account, let’s take this money and invest it into an S&P index fund and see what return we could get. The average return for the S&P 500 since it began has been 10%. A 10% return on $2880 would increase your money to approximately $3,168. Not bad for just saving and putting your money in a fund, right?
While a 10% return is not guaranteed by any means, the point of this post has been to show you how saving money is important and not that hard to do. Your investments may yield 20% some years, and negative 5% others, yet the important thing is to have money in the markets. Even if your savings are still growing in a bank account, continue to add to the account in hopes that one day you will be able to invest in the stock market! The end goal is to make money, so please, take some time and save your money.