Money Management

Saving by the decade – Get started

DATE | 06/26/23
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This article is the first in a series that will cover savings strategies you can follow in each decade of your life.

Building that nest egg for your daily needs can be a challenge. And for many, the idea of saving for retirement is often a ‘tomorrow’ idea—until it becomes ‘soon.’ But the longer you wait to save, the more it can cost you. We share some general guidelines to make saving a bit easier by the decade.

Saving money…it’s more than just spending less so you can build up your bank account. Saving more for your daily living needs and to meet your financial goals includes managing your budget, eliminating debt, strategizing your investments, protecting your assets, and more.

And just as importantly, it also includes preparing for your retirement—even if that seems like a long time from now. Not enough of us are doing so. According to the U.S. Census 2021 Survey of Income and Program Participation, among working-age individuals (ages 15 to 64), only 47.8% of men and 43.5% of women owned a retirement account—meaning over half do not have a retirement account at all. Baby Boomers (ages 56-64) were the most likely to own at least one type of retirement account, while Gen Z members (ages 15-23) were least likely to own a retirement account…but to their advantage, if they choose to use it, they also have the most time to accumulate additional retirement savings.

How you spend, save, and invest in every decade of your life has a significant impact on your financial well-being and financial future. Consider these tips to help manage your finances at every age and work toward a more secure retirement.

Your 20s: Get started

This is often the decade where you’ll make the least money—but it’s a great time to start building a budget, establishing your credit, and bulking up your emergency fund. Use our free budget form to help you start some good financial habits.

Contribute as much as you can to a 403(b). Your district may offer an employer match where the district matches your contributions—it could be fifty cents on the dollar up to a certain level, a flat amount, or many other types of options. As an added bonus, a match effectively increases your income without increasing your tax bill, since you pay no taxes on matching contributions until you withdraw them in retirement. If you’re not putting money into your 403(b) and there’s a match, then you may be leaving money on the table. Make it a goal to at least meet the match your district offers, if available. If you can afford to save more, even better!

Saving for your future now, even if it’s not a lot, gives you ample time to capitalize on the power of compound interest. The benefit of compound interest is that it grows over the years, earning interest on interest on interest. Even small contributions now can make a significant difference in your future nest egg.

>>Read Part 2 of our series on saving in your 30s.

Sources: Citizens First Bank, Forbes, Vanguard.
Your actual situation may be different depending on future rates. No guarantees are expressed or implied. If you choose to invest in the 403(b) or IRA programs, fees will apply. Consider all expenses before investing. Mutual fund management and redemption fees may apply.