Young Workers: Save Now or Save Later?

photo credit: billaday

While most conventional wisdom has long said you should start saving money as soon as you start earning it - because over time, it will compound and be much more valuable when you reach retirement age - there are also people who say that you’re better off not stressing too much and just saving later when your income is higher. An article at Yahoo Finance looked at both sides of the coin and came up with these points to think about:

• You may not earn more later. You might change jobs, your job might not exist anymore, or for some other unforeseen reason, you might not follow the standard pattern of earning more later in your career.
• Being in debt is stressful; on the other hand, saving and seeing these savings grow is psychologically calming.
• If you don’t save early, and spend instead, you might get into the habit of spending a lot on consumables, a habit that could be hard to break when you want to save later; but then again, your income might be higher and it could work out.
• You don’t know what the economy will do. You can’t plan to use a line of credit to “smooth out” your consumption over time because you don’t know what interest rates or conditions these will have in the future.

Tags: Career | Finances | Retirement | Saving Money