Sometimes, the thought of saving for the future can be daunting. And while there are many ways to plan ahead, sometimes a few simple things can change the way you look at saving money.
Here are a few good ideas when you start thinking about what you’d like to accomplish with your savings.
The best time to start saving for retirement is yesterday. The main benefit of starting early is to take advantage of compounding interest. Compounding interest allows you to earn interest on both the principal you invest and the interest you earn – potentially enabling you to turn a small sum into a substantial one over time.
When saving for retirement, or another future goal, consider using dollar-cost averaging as a strategy – the process of making regular investments on an ongoing basis, regardless of price; for example, buy 100 shares of an investment each month, quarter or year.
Dollar cost averaging does not assure a profit and does not protect against loss. It involves continuous investment regardless of fluctuating price levels of such securities. Investors should consider their financial ability to continue purchases through periods of low price levels.
No matter your plans, you should be sure to set aside enough money to cover your basic living expenses for three to six months. Keep this money in an easily accessible savings or money market account, not in a long-term investment asset. Don’t touch it until you absolutely need it!
At Steel Valley Investment Group, our goal is to create a financial plan designed to meet the needs of you and your family today while building a bridge to ensure that future generations benefit from the legacy you have worked hard to create.
These are just a few ideas to get your started on your path to saving for the future. Be sure to contact us if you have any questions.
These are the opinions of the author and not necessary those of Raymond James, and are subject to change without notice. Past performance is not a guarantee of future results. Information contained herein is believed to be from reliable sources but we do not guarantee their accuracy or completeness.