People have accomplished some pretty incredible things in their twenties. By age 22, Oprah had already landed her first talk show, Helen Keller had published her first book, and Jack White had just started The White Stripes in his living room. And even if you're not Oprah, you can achieve a lot if you take your twenties seriously—especially when it comes to your money.
In her LinkedIn Influencer article, "If I Were 22," Kathy Murphy, President of Personal Investing at Fidelity Investments®, describes what a critical time your twenties can be in terms of saving—and offers some words of wisdom on using this time to your full advantage.
While it may be tempting to live in the moment, Kathy points out that your twenties are your "prime saving years"—and making just a few small sacrifices now can give you a decent financial head start. Here are some of her tips.
- Skip one dinner out a month.
Let’s say you're 26 and you’re saving $100 in a retirement account, like an IRA or 401(k). What if you skipped just one meal out a month, and reallocated that money—let's say $33—to saving for retirement? By the time you're 67, that $33 a month could have amounted to more than $99,000 over 25 years in retirement.1 That’s a pretty nice chunk of change.
- Plan for the long term.
With people living longer and longer these days, there's a good chance you could live well into your 90s or even your 100s. That's why you might hear people tell you to max out your 401(k) and take full advantage of what your employer offers in terms of a matching contribution. Trust us, your 90-year-old-self will thank you.
- Talk to someone you can trust.
Whether it's your parents or an advisor, it's nice to have someone to turn to for tips about saving and investing. If you have any questions concerning where to start, give us a call—we'll be happy to talk them through.
THE BOTTOM LINE:
As hard as it may be to sock away more of your hard-earned cash, remember this: You'll be so glad you did.
Take the next step
Use our simple Budget Checkup tool to see if your spending and saving is in line with the 50/15/5 guide.
See what else Kathy's been up to by following her on LinkedIn.