How Starting to Save Early in Life Can Help You to Form Good Financial Habits
How Starting to Save Early in Life Can Help You to Form Good Financial Habits
The IFA Company’s Lucy McKinley discusses how starting to save early in life can help you to form good financial habits.
The amounts that you save don’t have to be huge now in order to make a big difference in 30 years’ time. My favourite example of this is a client who opened a personal pension in 1988 when he was 23 years old. He’s paid a monthly contribution of £60 for the past 35 years and now has a pension worth over £160,000. £60 per month now represents just a fraction of his income, but a pension fund of this size means he can enjoy a comfortable retirement.
Your priorities will change throughout life, but you’ll always need savings to fall back on. Your financial needs are different depending on what stage of life you’re at, but one thing stays the same – achieving your goals is easier when you have money in the bank.
The time value growth of investment growth. It doesn’t sound very exciting, but it’s the reason why investments grow at a faster rate the longer they stay invested. It’s down to the growth on investment gains. So, if an investment of £10,000 is worth £21,590 after 10 years and it continues to grow at the same rate, it will be worth £100,265 after 30 years.
Saving becomes easier the longer you do it. I tell younger clients that monthly savings should be viewed in the same way as a phone bill – it’s money that’s going towards something that you both want and need.
If you’d like some advice on where to get started with savings and investments, give us a call on 01946 821150, email [email protected], visit www.ifaco.co.uk or find us on social media.
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