Saving for the Future: Where to Start

Are you a recent college graduate? Or a young professional just starting out in your career. Maybe you recently got married and are joining finances with your partner. No matter your situation, it's never too early to start thinking about saving for your future. Start with these tips to begin:

Cut Costs

Take a hard look at your spending over the past few months and see where you can cut costs. For example, do you have a monthly gym membership that goes unused, or a cable subscription that could go away? Perhaps you buy a coffee every morning on your way to work that could be eliminated by simply making coffee at home. Whatever the case, take the time to investigate your finances and see where you can save money every month on unnecessary expenses.

Establish a Budget

You may already have a budget in place for housing and living expenses, but do you have a line item built into your budget for saving? It's a good idea to allocate dollars each month towards your savings account. The goal is to have at least three months of living expenses saved that can serve as an emergency fund.

Begin Saving for Retirement

Most companies offer a 401(k) retirement plan. Take the time to fully understand your company's program. For example, some organizations offer a matching contribution up to a certain percent. It is a smart move to start investing in your 401(k) and to put in at least the percentage your company matches, if applicable. The sooner you start investing in your 401(k), the quicker your retirement dollars will grow.

Strategize Paying Off Debt

If you are like most young adults, you likely have accumulated some student loan and credit card debt. To start, look at all your debt and the interest rates associated with each loan. It's always a good idea to try to tackle loans that have a higher interest rate first. You might also discover that you have a debt you can easily pay off instead of making the minimum payments. Whatever strategy you implement, it's important to have a plan in place for your future.

Earn More for Your Money

Once you feel like you've conquered cutting costs, budgeting for saving, contributing to a 401(k), and paying down debts, you may want to consider putting your money into bank accounts that earn interest. Earning interest on your dollars will help you earn more for your money. You might also consider Certificates of Deposit (CDs). A CD is a special type of deposit account that typically offers a higher rate of interest with varying terms.