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It's Never Too Early to Start

For people new to the full-time work force, investing money for future goals may seem out of reach. Yet, starting to invest at an early age offers a big boost toward achieving long-term goals. Here are a few ideas that may help new workers.

Don’t get bogged down

A couple looking at a laptop in their home discussing something with papers on the counter.
To many young people, the expense of living on their own for the first time can seem overwhelming. Having new financial responsibilities may also mean making the difficult adjustment to a lower standard of living than their parents offered. Too often, cash-strapped young people resort to using credit cards. But credit card debt will make life more difficult. Charges add up quickly if the balance isn’t paid off right away, making it even harder to make ends meet. Learning to live within a budget can lead the way to a more secure financial future.

Participate in an employer’s plan

Young workers whose employers offer a retirement saving plan, such as a 401(k), should consider participating as soon as they’re eligible. Pretax contributions are deducted before paychecks are distributed, so there’s no temptation to spend that money. And, any match that an employer contributes is essentially free money. Savings and investment earnings can grow tax deferred in the plan and have many years to benefit from potential compound growth. Over time, the relatively small amounts contributed each pay period can really add up.

Make the most of the market

Looking beyond retirement plans, there are many options geared toward young investors that require only a small minimum investment. It’s important for investors to fully understand an investment’s objectives and performance history, as well as their individual risk tolerance, before committing any money. Young investors may want to consider investments that are less conservative and aim for more long-term growth.

Notices & Disclosures

Article is adapted from content provided by DST.

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