Save, Save, Save

When I first started university, I wanted to major in both finance and history. I had recently changed my mind and switched from software engineering to business school. I’m still not sure if it was a wise decision. Maybe if I had heard from more software engineers who had later turned to sales or business development, it would have been different. But at the time, I thought if you majored in software engineering, you had to be a software engineer for the rest of your life. It may seem illogical to you, but our education system teaches us to see in a straight line. Why did I switch to finance? I wanted to see how to make money. Coming from a low income family, money had always been a predominant issue in my childhood. Money was stressful. It caused arguments and distress. I wanted to avoid this in my life.

I switched to finance to learn more about how to invest and save money. Looking back, I’ve learned much more about personal finance reading on my own than I did from those college classes. Personal finance reading is free compared to the huge college investment.

Andy Clarke, a Vanguard blog contributor, shared his one piece of investment advice in a recent blog entry. Saving is more important than fancy investing. If you start saving at 25, your money will have more time to compound. You will end up with more money in your retirement account than the person who started saving at 35. 10 years is a huge difference in terms of letting your money grow.

So with this I leave you with save, save, and save. I know it’s hard. I myself struggle with our savings all the time. Living costs money. We don’t live a very luxurious life, yet sometimes I wonder where is all our money going? So, try to save as much money as possible. Put it in another savings account or transfer it directly to Vanguard; out of sight, out of mind.

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  • I couldn’t agree more! Thanks to compound interest, saving a little bit starting in your 20s will have a much bigger impact long term than doubling your savings in your 30s or later. My favorite way to save is by “paying myself first”. I pay my savings account like it’s a bill as soon as I get paid, then the rest of my bills, and then have what’s left for fun. If I didn’t force myself to do that, I’d probably never be able to save a dime.
    Shannon recently posted…It’s Time to Get Realistic About Marriage and MoneyMy Profile

  • I wish I had the internet back when I was trying to save. My insurance agent made a killing off of me when he convinced me to invest in high fee mutual funds that also performed poorly. After that debacle I decided to try to invest in the dot com bubble. Another horrifying setback. I decided to put all my money into a savings account at the bank. Finally begin to see positive results and dodged the housing bubble bust. Unfortunately, I missed the huge rally after that. So ya, finally saved some money but compound interest didn’t work out for me.

  • I love the feeling of transferring money into my savings account. There is nothing better than to hit those savings goals, and feeling peace of mind!
    Daisy @ Add Vodka recently posted…2014 Goals: May ProgressMy Profile

  • Well said! It’s not rocket science to save but that doesn’t make it any easier.
    ND Chic recently posted…Savings FirstMy Profile

  • Great advice, even if you screw up almost everything as long as you save money chances are you will be doing just fine. Save don’t pay someone else money.

  • Well put. The key to everything is saving. Form there you can build an investment portfolio, buy real estate let the money simply sit and earn interest and have the power of time work its compounding magic. You hear stories all the time of people with very little means or income retire or eventually die with millions never having a high paying job etc. It’s all about save, save save :)
    DivHut recently posted…Dividends From The GraveMy Profile

  • Very simple concept to grasp and yet so complicated for millions who can’t bother to save anything. For me I love to see the investments grow and pay me dividends for watching them grow. I hope to retire in 10 years.

  • Totally! That’s why I started saving aggressively at about 24 because I knew the early you start, the better it will be.
    Jessica Moorhouse recently posted…Moving to Toronto: The First YearMy Profile

  • The best way to save is forced savings. Have it automatically taken out of your paycheck. If you are lucky enough to work for a company that provides a matching 401k, take advantage of it as much as you can afford, up to the maximum match. Automatic withdrawals from your checking account to an investment can also help.

    Savings helped got to the point of having a down payment for a rental property. Savings helped me pay for a nice vacation. And savings helped me create a solid emergency cushion.
    Fred @ Stockerblog recently posted…Upcoming IPOs Through JulyMy Profile

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