“It Is Amazingly Easy To Choose To Not Save And Invest For The Future”

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Loose change in hands, sprouting money.

It takes a lot of work to grow your money.

You’ve gotten a job, moved out of your parents’ house, and you’re steadily chipping away at those student loans. Now what?

Beth Napper graduated from college in 1999 and wanted to figure out how to manage her own money, which naturally turned into a career as a financial adviser, helping others understand how to manage theirs. Here, she talks about what it means to plan ahead for savings, family, and (gulp) retirement, as told to our own Aaron Weber.


Don’t Let Your “Wants” Hurt You

Most people I help are trying to balance their own wants and needs with family and work to achieve goals, with a focus on saving for retirement.

The problem with saving for any goal is that there are all these other things we can spend our money on. Overall, I think most people have a hard time seeing the compounding cost of our wants over time.

It’s all about choices. Is it bad to want to meet friends for brunch or dinner, go to a concert, have drinks after work, live in a nice neighborhood, buy a new car, live alone, put children in private school, run to the coffee shop, travel for a bachelor(ette) party, buy a new shirt, take a vacation, and so on? Of course it’s not.

Looked at separately, each one can be hard to resist and seems unlikely to wreck future goals, but taken together, these choices combine to form a lifestyle—and it is lifestyle choices that cause people to delay saving or fail to save enough.

It’s Not A Judgment Call; It’s A Priority Call

You have to think from the start not only about the fun you want to have tonight, this weekend, or next year, but also about the fun you want to have further down the road. It is amazingly easy to choose to not save and invest for the future. That’s fine so long as the person making that choice understands and accepts that by enjoying all or most of their money now—short of a large inheritance or winning the lottery—they’re unlikely to enjoy retirement, at least in the traditional sense.

Unfortunately, a lot of people don’t realize the impact of their choices until 10–15 years before they want to retire. By then, 20–30 years of potential savings and investments has passed. They’re often surprised to learn that the savings they’ve accumulated in their retirement accounts at 60 years old isn’t enough to generate the same income of the average person in their 20s. And frankly, the average 20-something has an easier time accepting that their choices have led to a diet of ramen noodles, small apartments, and occasionally having to rely on family than the average 60-something.

You Need To Start Early

Financial security in retirement is a long-term goal that can’t be achieved in a short-term time frame. The earlier you can start investing in a 401(k) plan or other types of retirement accounts, the more you may benefit from growth in the stock market over time.

Of course, nobody can guarantee what the stock market will do. Over time, it has provided growth, but I can’t promise you it will be the same way forever.

Are you saving for your future? 

(Photo: 401(K) 2012)

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  1. Sasha November 22, 2013 / 12:58 pm

    She brings up many great points especially how our wants can turn into a lifestyle-not just singular purchases. But his also scared the crap outta me towards the end I think I’ll go look into that 401K…

  2. Aaron November 22, 2013 / 1:27 pm

    Yeah. The earlier you start saving, the better. There’s charts of just how big a difference it makes. Something like, if you save (and invest) $100 a month starting in your 20s, it’s better than saving $500 a month starting in your 40s.

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