In today’s post, I am going to cover the topic of how to start saving money for the future. It doesn’t matter what age you are right now because you are currently reading this blog post. If you find this article useful then consider sending it to a friend that could also benefit from reading this blog post.
1) Know What Your Goals Are
This is the most basic type of saving money for your future, but also an important one. In 30 years where do you plan to be in life? Where do you want to live? How much money do you want in 30 years? These are some simple questions to ask in order to start making a plan (or map) that will help guide you in the right direction.
A cool way to go about doing this is creating a vision board of a life you want in the future. You get to visually see a lifestyle you want to live and then be able to start asking yourself the path needed to make it there.
2) Have A Source Of Income
The second thing that you need to start saving money for the future is making money. This can be getting a job or obtaining an income another way (legally). After you start consistently getting a paycheck, try to minimize the spending on things you want, and focus more on saving a huge chunk of income that you receive.
If you are in the process of looking for a job then I highly suggest that you just go on indeed and start applying. I found it easy when I got my first job when going through indeed.
3) Open Up A High Yield Savings Account (optional)
When you start making money, the best way to go about making more interest then what a regular bank offers is a high yield savings account. With this option, the more money that you have in the account, the more interest you’ll make every month. Over some time, the money you make from interest will be on autopilot.
I like this option as another way to grow savings because the only thing you have to do is keep money in the account. Like I said above, the only way to honestly get the best benefit from this type of savings account is to have a good amount of money in it. (only opinion) I would open up an account if you have 5,000+ ready to put into the high yield savings.
4) Open Up A Roth IRA (optional but recommended)
A Roth IRA is an individual retirement account for any person that pays taxes can open. With this path toward investing, when you retire the money that is received isn’t taxed. Yes, that means if you have 1 million dollars in your Roth IRA, you will get all that money. The reason for that is because the money that you are putting into that account will already be taxed.
You can open up one with fidelity or Acorns (to name a few that I have checked out). The earlier you go about starting your investing journey with a Roth IRA, The more money you’ll have from long term gains. I didn’t know anything about this until I was in college. If you are 19 years old reading this right now then you now know what to do once you’re able to open up a Roth IRA.
5) Start Investing Money In Stocks (Main Step)
Opening up a brokerage account to start investing in the next step you need to do once you start making money. I would start investing with $50-$100 per paycheck into stocks. I suggest starting with ETFs and dividend stocks.
You can also buy some single stocks from fortune 500 companies and then look into REITS. You will be surprised at how fast you can grow a well-diversified portfolio. Yes, the stock market is going to go up and down, but long term it will only go up.
If you want to do the investing yourself then consider downloading Robinhood. If you want an app that invests the money you put in for you then I would suggest Acorns. I use both of these apps for investing in stocks that I want to hand pick and the other is for my Roth IRA.
Sign up for Robinhood here
Sign up for Acorns here
I hope that you have received some helpful steps on how to start saving money for the future. This is something that doesn’t really go through a lot of people’s minds until their late 20’s early 30’s. Get a head start now and begin learning about personal finance to benefit yourself in the future.
Thank you for supporting The Finance Starter! It’s been a while since I last wrote and that’s going to be changing. I’ve just been reading and learning about growing a blog bigger than I think it can be.