Money is tough to figure out. Most of us didn’t receive much of an education in financial literacy in high school; we were too busy taking classes in calculus and English lit to deal with questions like “What percentage of my salary should I pay in rent?” or “How many student loans should I take out for a liberal arts degree?” And a lot of parents talk to their kids about the importance of getting a good job, but not as many talk about what you should do with the money you get from that good job.
If you don’t already have a savings account, now is a great time to start. It doesn’t matter where you live. Everyone can benefit from setting aside a bit of extra money. It doesn’t have to be a lot, at least not at first. A lot of people are used to hearing that you need enough savings to pay all your bills for three months. That’s a great goal if you can manage it, but, frankly, it’s not realistic for a lot of people. The economy seems to be doing well, but the “gig economy” means less financial security in general. It’s hard to build up a big nest egg if you’re driving for a ride-sharing company or taking on freelancing projects.
So don’t beat yourself up if you can’t save a ton of money each month. A little bit is a lot better than nothing. Even $25 a month equals $300 a year. And that $300 could matter a lot if there’s a financial emergency. You may even want to use it to help out a loved one. If your sister in the suburbs of Cleveland needs dental work, giving her half of that $300 could make a big difference in her life.
The point is to start small and then see where that takes you. There may be months when you can set aside $50 or even $100. There may also be months where you can’t set aside anything because you got a parking ticket or an abnormally high electric bill.
Sure, it would be great if your workplace gave you a 401(k) that they matched or even doubled. It would be great if you could afford to see a financial adviser and throw a few thousand dollars into the stock market. Maybe one day you’ll have those things, but that’s not the reality for many people in their twenties and thirties right now. Heck, it’s not the reality for many people in their forties and fifties. All it takes is a little bit of bad luck to find yourself struggling on the margins.
Putting aside a little money also gives you something else that’s absolutely critical: hope. It doesn’t matter if you’re a waiter in Central Pennsylvania who hopes to buy a new car or an actor in Los Angeles who longs to travel to Paris. Watching your savings accounts grow, even if it seems to be growing slowly, is proof that you’re investing in yourself and your dreams.