This is another common thing I hear and I definitely understand the reasoning behind this thought. With so much debt, people want to focus solely on paying off that debt and they say to me “when I am out of debt then I will put money away.”
Sometimes, this may be what actually needs to be done. Other times, I’m going to advise that I think you should save money while you are paying off debt. Why? Simple. If you don’t start now, it becomes a procrastination habit. Almost, like there will always be a “reason” why you cannot save your money. Then one day you will wake up and you will be 10 years from retirement with nothing saved! That’s a scary thought. At that point, you have to save way more money monthly to make up for the lack of time left before retirement.
That’s not the only thing you’ve missed out on by waiting. You’ve also missed all the compounding growth that each year would have given you.
Here’s the rule of 72. There is an old saying that whatever your interest rate is on your money take that number and see how many times it goes into 72. For example, if you are getting 8% on your money then theoretically it will take you 9 years for that money to double itself. How many 9 year increments do you have left before retirement? Food for thought.
So, the moral of this blog is please don’t wait to save money; start now. You can easily start with $25 or $50 a month and just keep increasing it at least every year.