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12 Jan 10 Saving For Retirement Early

You’re never too young to save for your retirement.  That’s something that not everyone realizes.  But how you plan for you retirement in your 20s and 30s can help determine the quality of your life after retirement.  The more planning the better, especially if you want to retire early and ensure that you have the money available to lead the life you want, after work.

Saving is the best way to start.  Determine an acceptable percentage of each paycheck that you want to set aside in a savings account.  If you have direct deposit at your job, practically every bank offers you the ability to denote a percentage of each check automatically to your savings.  That way you’re saving money without really even consciously trying.  Remember, start small.  You don’t have to go crazy to save a lot of money.  This is a long term strategy, so a little now will add up over the long run.

When you’ve started building up a decent amount of money in your savings account, think about making that money work for you.  If you’re money is sitting in savings, it isn’t really doing anything.  Consider putting some of that into long term stock or bond investments.  Something practically guaranteed to make your money grow.  There’s always some risk involved, so don’t over invest, but definitely take a few steps to build on what you have.

Finally, try not to frivolously spend your money.  That doesn’t mean being frugal your whole life so you can finally spend in your 50s.  But rather, don’t make purchases you can’t afford, and don’t use credit to live beyond your means.  Both catch up with you faster than you’d think, and will hurt your retirement in the long run.  Be intelligent with your money.  If you have to wait a few weeks for something you want to fit in the budget, be patient.  You’ll be better off in the long run.

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