If You’re Just Starting Out Putting off the basics when you’re just starting out like reducing debt, starting a savings program and planning for retirement only makes things more difficult down the road. The sooner you start, the better off you are.
You’ll want to create an emergency fund equal to three to six months worth of basic living expenses. When you consider all the demands on your monthly budget, the thought of setting aside money for long-term savings probably seems daunting. Fortunately, time is on your side. Through the power of compounding interest, just $25 a week set aside over 15 years builds a nest egg of more than $31,000, assuming a 6% annual return.
If you haven’t already, enroll in your company’s 401(k) retirement savings plan. As this will likely be the primary source of your retirement savings, the earlier you start, the better. Many companies even match employee 401(k) contributions, so by not enrolling you’re essentially turning down free money.
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