Experts in the financial planning industry will tell you that the best time to start saving money and planning for retirement is when you are in your 20s. If you are currently in this age group and are wondering how you should handle this important aspect of your finances, you may want to meet with a financial planner at a firm like Domestique Capital LLC. The planner you meet with can offer tips and strategies for you, and here are some tips he or she may offer.
Live small and within your means
The first tip the planner might offer involves living small and within your means, and this is a tip people of any age should follow. If you start off following this while you are in your 20s, you will not only develop better spending and saving habits, but you will also be able to avoid racking up too much debt and getting into financial trouble.
Living small and within your means is a very simple philosophy; spend less money than you earn. This may mean living in a smaller, older home for a longer amount of time than you planned, or it might mean keeping your older car a few years longer than you had expected. Learning to live this way will help you in the long run with your finances.
Save a certain percentage of your income
A second tip financial planners offer is saving a percentage of your income. This means that you will take a set percentage of each of your paychecks and put it away in some type of saving's account. This could be a regular saving's account, mutual funds, or another type of financial tool.
Saving 20% of your income is a good target to have, according to many experts, but even saving 10% of your income is a good idea. The goal is to choose a percentage to save and stick with that every payday.
Take advantage of employer retirement plans
Finally, you should take advantage of a retirement plan offered by your employer if there is one. These plans are great for many reasons, and many employers actually promote them by adding money to them if the employees do. This is a great way to grow your savings on a tax-deferred basis.
If you are in your 20s and want to manage your finances wisely, talk to a financial planning firm. They can help you get started on the right track, and this will help you grow a retirement savings that will be sufficient for your needs.