Saving money is a great goal in itself, but it’s also the first step for most financial goals. Setting financial goals is important, and building savings toward those goals is the best way to achieve them.
A few good reasons to start saving today.
- If you’re in debt and don’t have a penny to your name, you should start by building a modest emergency fund. Only 1 in 2 adult Americans have enough savings to coveran emergency expense of just $400. Which is a modest amount as far as unexpected expenses go. The average unexpected medical expense is around $2,800 (source).
- Interested in buying a house? Having the cash for a 20% down payment can save a small fortune in interest payments and avoid paying for private mortgage insurance altogether. To illustrate, a 20% down payment on a $200k home could save you around $12,700 within the first five years of your mortgage (source).
- Start saving for retirement early to fully harness the power of compound interest. For example, just saving $5k a year for 10 years from ages 25 to 35 (a total investment of $50k) and you will have $602,070 by the time you hit 65 assuming an annual return of 7%. Start when you 35 and contribute $5k every year until you retire at 65 (a total investment of $150k) and you will have nearly $60k less ($540,741).
Sometimes the hardest thing about saving money is getting started. SuperMoney shows you simple ways to save money and use your savings to fulfill your financial goals.