Think you don’t make enough money to save some of it? Think again!
If you earn $25,000 a year for 40 years, you will have earned $1 million dollars! Earn $35,000 for 40 years, and you’ve earned $1.4 million dollars. And if you earned $45,000 for 40 years, you’d have made $1.8 million dollars!
Pay yourself first and you can get ahead in the savings game. Here’s what can happen when you save just $100 a month for 40 years:
At three percent interest, you would have about $93,000.
At five percent interest, you’d have about $153,240.
If you got a nine percent interest rate, you’d have about $472,000.
That’s the power of paying yourself first! After all, it’s not what you earn – it’s what you keep!
The hypothetical percentage rates and values are for illustrative purposes only and do not represent any actual investment. Rates of return are consistent nominal rates, unlike actual investments, which will fluctuate in value. Subject to applicable taxes. If fees and taxes were included, results would be lower.
Would you like to have $1 million saved for retirement? Start saving now! For every year you put it off, you pay the high cost of waiting.
If you start saving $95 each month at age 20, you could have one million dollars at age 65. But, if you wait until age 30 to start, you’ll have to put away $263 each month.
Wait 10 more years and start at age 40, you’ll have to save $754 each month. Get started at age 50, and you’ll have to save $2,413 each month. That’s 25 times more per month than if you’d started at age 20 – ouch!
Because of the power of compound interest, the sooner you start to save, the less you’ll have to put away to meet your goal. Don’t pay the high cost of waiting – start saving for retirement today!
This is a hypothetical and does not represent an actual investment. Assumes annual end-of-year contributions, with a 10% nominal rate of return, compounded monthly. This example uses a constant rate of return, unlike actual investments which will fluctuate in value. It does not include fees and taxes, which would lower results.
If you need help kicking the credit habit, try paying with cash. New studies show those who pay with cash:
Spend less. Those who pay with credit – and even debit – buy more things, pay a higher price for them (sometimes twice as much) and are less aware of how much they’ve spent than those who pay with cash.*
Learn positive habits. For example, learn how to save for items you want versus charging them and impulse buying.
Gain leverage. Storeowners will often shave huge percentages off big-ticket items for customers who pay with cash.
Become wealthier. Since there’s no postponing the payment, you learn to truly budget and live within your means. And those who plan and budget are almost 40% wealthier than those who don’t.**
Instead of working in your favor (as with a savings account), the power of compound interest works against you with debt.
If you start with a $500 balance on your credit card at 19.8% interest, then each year make two additional charges of $75 each, and pay only the minimum monthly payment of 3.5% of the balance or $20, whichever is greater, after 25 years the interest charges amount to $3,121.
If you’re like most people, the start of a new year is a time for reflection and resolutions to make the new year better than the previous. Of course, all those grand plans for losing weight or exercising more usually fall by the wayside as life gets in the way.
This year, Primerica encourages you to make a resolution that you can keep…a resolution to start preparing for your future! With all the changes of 2009 behind us, right now is the perfect time to start making little changes that could have big benefits in the future.
These four tips will help you get started.
Create a Budget. Have too much month left at the end of your money? A few dollars here and there don’t seem like much at the time, but when added up can equal a big chunk of money you didn’t realize you were spending! Creating and sticking to a budget is an easy way to identify exactly where your money’s going.
Trim Expenses. Think about the expenses you have every month. There may be ways to trim costs by foregoing some conveniences – like specialty cable channel subscriptions or movie theater outings.
Consider the Latte Factor. Getting into the habit of saving isn’t hard, it just takes practice. Start by cutting out small expenses first and put the money you would be spending on those things into a savings account. For example, if you purchase coffee every morning, try making your own brew at home a couple of times a week.
Become a Bargain Hunter. You could save hundreds or even thousands of dollars a year by shopping around! It takes a little effort, but clipping coupons, purchasing items in bulk at discount stores and holding out for sales for big ticket items can really add up.
You Can Do It!
This year, resolve to take charge of your financial destiny! Your local Primerica representative can show you more ways to free up funds and start saving. Call today for your FREE Financial Needs Analysis and get on the road to a fantastic future.
