Saving for the future can be overwhelming. With so many competing priorities, it can be difficult to find the money to pay for even the basic necessities. Between living expenses, childcare, student loans and other commitments, resources get depleted quickly.

Immediate financial responsibilities take priority over important financial opportunities. Saving money for future use never seems that important when you have an immediate need – retirement, college funding, and emergency expense accounts are put on hold.

While it’s easy to think that planning for the future has to wait, delaying investment is a mistake. When you wait to save for the future, you are leaving money on the table.

If you wait to save for the future, you are leaving money on the table.

Exponential Growth


There are three principles to keep in mind to maximize your savings over time and avoid this crucial mistake.

1. Start saving now.

The earlier you start saving, the more you can leverage the power of compound interest. With compound interest, you earn interest on the interest you’ve already earned, dramatically increasing your savings over time.

Consider an investment account with a $5,000 starting balance earning 8% annual interest. At the end of the first year, the account balance will be $5,400.  At the end of the second year, the balance will grow to $5,832. In the second year, the account earns interest not only on the principle, but also on the $400 in interest earned the first year.

The earnings may not look like much after 2 years, but the magic of compound interest is that its growth becomes more pronounced over time. The longer you save, the more your balance grows at each interval. Because of compound interest, it is better to put in some money now than to try to catch up later.

2. Don’t get discouraged.

Maybe you’re just beginning your career and it seems like the amount you can save isn’t enough to make an impact. Or you might be well-established, but didn’t prioritize saving when you were younger and now it seems too late.

Whatever your situation, don’t get discouraged. Don’t get caught up in mistakes you’ve made or the limitations of your available resources. Do what you can right now by saving any extra money you have.

Exponential Growth

The magic of compound interest is that its growth becomes more dramatic over time.


3. Stick with it.

Once you start saving, it is important to be consistent. That consistency will pay off over time as compound interest multiplies.

Consider again the account that started with a $5,000 balance and earned 8% interest annually. If you consistently contributed $150 each month, it would be worth $171,468 after 25 years. Only $50,000 of that is money you put into the account. That means that 70% of that final $171,468 is interest generated on the account.

Once you start saving, be consistent. By saving only $150 per month with an initial investment of $5,000, you can more than triple your investment over the course of 25 years on an account that earns 8% interest annually.

Wherever you are in life, start saving for the future now. You may look at your budget and think that you can’t afford to save. But the truth is, you can’t afford not to.