How Do I Start Saving Money for The Future

Question of the Day: How do I start saving money for a house if I am 20 years old today. I will become worried if I didn’t saved money for my future. What is the best thing to start saving my hard-earned money. I received this question via email message from Winston T of Brooklyn, New York, United States. In personal finance section of this blog, we teach people how to save money for their future (yes, their retirement years). We have the guide about life before and after retirement. Today, let us talk about saving money for the future. We all want to prepare ourselves for the future, our career, house, properties and of course our retirement funds. We can’t predict the future, that’s true. But we can still see our future using the things we are doing today. If Winston (the sender) wants to really save money for his future, he must first analyze his money habit. What I mean is, if he is really serious in saving money, he should not waste his money. Since he is just 20 years-old, his mind and lifestyle is focus in enjoying life.

4 Ways to Start Saving Money for the Future

Here are the ways on how to save money for the future. If you believe this list is not enough or incomplete, then add some saving money tips in the comment box,

Save Money for the Future using 401K

This is a great idea if you are an employee. Particularly in the United States, 401k is very popular way of saving money for retirement. Ask your employer on how can you contribute to 401k.

The good thing about 401k is that you can save money automatically. Before you received your paycheck, your contribution to 401k was automatically deducted. 401k is an effortless saving money for the future.

See Also: Popular & Tried Retirement Investment Options & Savings Account

Save Money in the Bank

You can save money in the bank but the interest earn is not higher. You can’t even beat inflation even if you’re investing in time deposits. Choose which bank can give a high interest rate for your savings. Compare the banks in your local area and save money in your chosen bank.

Invest Money for the Future Instead

Instead on saving money, try to invest for good return. Since you are saving long enough years (for your future), investing can really maximize the growth of your money. Because of compound interest and reasonable investment return per year, you can build enough funds for your retirement.

Try to invest in stocks, real estate and mutual funds. But do not forget to allocate your money accordingly, example if you are young then take high risks if your old , then take low risks such as bonds and CDs.

Related: How Much Money Do I Need to Retire at 55

Buy Assets for Your Future

The best way to save money for the future is to buy an asset. It is hard for a 20 year old man or woman to buy an asset. Like what I have said before, their attention focus in enjoying their today’s lives. They don’t even think about the future.

If you are wise, save money then buy an assets like commercial lots, stocks and mutual fund shares. So that when your future comes, you have assets that are making money for you.