It does not take much to save for retirement. The concepts of compound interest, the amount of options in the financial industry, and the application of great financial habits can make the difference between a $100,000 savings account and $10 million. When should saving for retirement begin? Yesterday. On a more realistic manner, it should begin by building habits and establishing smart debt maintenance.


After Closing Up That Last Loan


There are two extreme schools of thought when it comes to loans. Others think that a loan should be avoided in every situation possible. It is ill-advised and unproductive, and loans are a major misstep. Others only buy with loans. It frees up their finances. It allows them to get what they want even if they cannot afford it. If the option is there, why not take it?


When looking at retirement, the opinion becomes skewed. Money being placed towards a debt, particularly a car or student loan, is money not being saved for retirement. Worse yet, these creditors can go after wages and taxes, which will further invade retirement savings. Student debt cannot be removed by bankruptcy, so it is a sum that absolutely must be paid at some point. It is smart to remove all debt first (the sole exception would be a home mortgage). Get into a position of freedom from debt, and begin the process of saving for retirement.


When it Comes to Retirement, Think Small


One of the most obvious mistakes people make before saving for retirement is thinking too big. They do not have an extra $5,000, so it does not seem feasible. This is a broken thought process. Saving begins with small amounts. Truthfully, saving for retirement is more about the habit than it is about the quantity. If someone made it a habit to save $1 every day, they would have hundreds of thousands in a compound interest account after a decade. It does not have to be this big grand ordeal. Make small baby steps to build a savings. Work through a financial resource such as captain cash to begin the positive habits that are small, daily, and influential.


These small steps accumulate to something big. Unfortunately, many get burdened by these big expectations and lose sight of the daily habits. They also get trapped in a circle of debt that consumes them. managing these two aspects is the center piece of retirement building.