How to Start Saving Money for Retirement

There are some simple steps that you can follow which will give you a head start when it comes to saving. Everyone knows that saving money is an important and very basic thing to do and that if you dont do it you could face severe financial hardships, especially later in life when your earning power is lowered. I am going show you a few simple ways how to start saving money for retirement right now, no matter your age.

If you are under thirty years of age, this is the ideal time to begin saving. You wont have to sock away so much and you will soon learn how to start saving money naturally by adjusting your spending habits. The earlier you begin serious saving, the more money you will have and that is because of the theory of compound interest. Every year your money nest will grow and grow exponentially, even if the interest rate you are receiving is not that great.

If you have a steady job with an employer, you should go to HR and ask how you can participate in their 401(k) program There are several advantages to most 401(k) savings programs. First thing is that it forces you to save because the deductions are automatic. If you have to think about how to start saving money, you proably wont do such a good job. Secondly, most of the time your employer will match funds to a certain degree, depending on the strength of the employers benefits package and the size of the company. The larger the company, the higher the employer contribution.

If you are self-employed or dont want automatic deductions for whatever reason, it will be somewhat harder to learn how to start saving money, but not impossible. First thing you need to do is create a budget and stick to it. Put down all of the necessary things first such as housing, car, gas, utilities, phones, etc. Secondly list groceries, cable TV, vacations, etc. Last on your list should be discretionary items such as eating out and entertainment. Be honest when you write these things down. After studying the resulting list, try and cut anything that is not absolutely necessary. You will see that there are quite a few things you can sacrifice. Take this money and put it away in an interest bearing savings account at your local bank. Make sure when you do this that the bank is not charging any hidden fees. These could result in you losing any interest.

Pretty soon you will find that your savings will grow once you learn how to start saving money wisely. Once you have $10,000 put away then you can start looking seriously at higher risk investments such as stocks and bonds.