The key to a financially-stable future is having a significant amount of savings. No matter how large your income is, a person with more savings will always be more financially secure. Due to the intense volatility of the current economy (as proven by the Covid-19 pandemic), income is never guaranteed. Therefore, the importance of having savings and/or an emergency fund has never been more important
But when is the best age to start saving? It seems that from the moment you start earning your own money, your expenses make it almost impossible to set aside some cash to put into your savings. However, if you start saving from an early age, the interest that you earn from your savings will accumulate and grow into a sizable amount.
Different ages you can start saving from
Saving in your Teens
It’s never too early to start saving. If you’re in your teens, and you have your own money either from an allowance given by parents or perhaps even through certain business ventures of your own, you might be sorely tempted to spend it on items your parents aren’t willing to buy for you. However, saving some of it is extremely wise, especially in a way where you can earn some interest on it, thereby greatly increasing your chances of growing the money as the years pass. When you are in your teens, it’s generally accepted that you have less responsibilities and therefore more of a capacity to save the money that you earn. Further, teenagers have something that even the most seasoned investor and high-earner doesn’t have - plenty of time. Inculcating good saving habits in your early age itself will go a long way in preparing you to face the harsh realities of adulthood.
Saving in your Twenties
Your twenties will be one of the most crucial stages in your entire life, as what you do in your twenties will set the pace for the rest of your life. In your twenties, you will most probably be fresh out of your higher education and into your first forays into employment. Navigating your first years of serious adulthood means setting in place habits and processes that will pave the way towards a stable future. That includes cultivating a strong savings-oriented lifestyle. If you aim to live lavishly in your twenties by spending your entire paycheck each month, you may find that when life gets serious (e.g. marriage, housing, children), you might not be able to dial your expenses back. In your twenties, try to save as much money as possible as your commitments are still generally lower than it would be in the future. Life in your twenties are also the best times for learning things (sometimes in the hard way) - be prepared for any eventuality by stockpiling your savings as much as you can.
Saving in your Thirties
Your thirties are when things get serious, however without the self-doubt and peer pressure that your twenties might have had. Your thirties are meant to be a time when you start solidifying your life. The habits of your twenties would have set the tone for how to tackle life in your thirties - and your attitude to savings will be the same. If you cultivated a savings habit in your twenties, your thirties should be no different with the additional benefit of a greater income level. Your thirties are also a good time to try your hand at investments, as by now you would have learned a good thing or two about how money works and lived through just enough to know the applicable risks of certain ventures, either through experience or seeing others go through it. (Read here : Money Milestones You Need to Hit Before 30)
Saving in your Forties
Your forties are the home stretch - just a few years to go before retirement. This is the age where you are most mature and have the most relevant knowledge about what you should be doing with your money. That doesn’t mean you should invest all your money - a well-stocked savings account is a must as you near retirement age. Ideally by this time, you should also have a few more streams of income coming in; however, if you don’t, your forties are the best time period to look at diversifying your income streams and try to generate passive income, not just to supplement your current salary but also to continue generating revenue well into your fifties
Saving in your Fifties and after
While it’s never too early to start saving at an early age, it’s also never too late to start saving either. Your fifties would be a time period where you will be freed from almost all commitments and have a lot of free time post-retirement. You could either put your free time towards investment ventures or else simply reap the benefits of the financial structure you diligently built over the last few decades of your life. Enjoy your life during this time to the utmost, all the while keeping a fund for yourself to allow you to be completely independent and not have to rely on the love and kindness of your family and friends as you near old age.
Saving money when your income is barely sufficient for your daily needs is quite difficult. However, if you are not in any kind of serious debt, the correct time to start saving is now, regardless of what your age is. While saving 20-30% of your income is ideal, secreting away a few thousand each month (or even less) will go a long way in being there for you when you are in dire need of cash. If you’ve managed to store your savings in a high yield savings account, you can even watch your money make more money for you and be well on your way towards achieving your life goals - and isn’t that everyone’s dream?