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It's a Doable Journey with the Right Aim
Have you ever run a marathon? I’ve run one full marathon in my life. Full disclosure, I hated every minute of it, as well as the hundreds of miles of training during that humid summer. But I accepted the challenge of some diehard marathon-running friends, and I did finish, near my target time.
More relevant to this discussion is that at no time in the first 5, 10, or even 13 miles, was I thinking of mile 26. The only way to succeed was to think in the moment and to have a near-term goal I was driven to achieve.
So too with money.
Clarity Makes a Difference
Specific savings goals by age 30 are better than a vague long-term goal like “save for retirement”. As with the marathon (ugh), it is easier to achieve a more near-term goal! Success breeds success!
Reaching a near-term goal will give you the confidence that you will eventually achieve long-term goals as well.
Best yet, the life skills you learn and apply to reach the near-term goal will be in place and benefit you your whole life.
Thus, the key to saving money is to start young. It will not only maximize the time for your money to compound and grow, but it also ensures you have a personal process in place at an early age to systematically advance your financial wellness. This process includes developing habits and a mindset focused on saving. It also helps heighten awareness on obstacles to avoid that prevent saving money.
Setting Your Sights on Age 30…Can Set You Up for Life
Let’s illustrate the power of compounding alluded to above. I’ll spare you the underlying math, disclaimers, and assumption. Trust me, it is reasonable to expect that money can double every 10 years. If you save $1 by age 30, it can double to $2 by age 40. It can then double again to $4 by age 50. And double again to $8 by age 60. Notice how the last doubling (from $4 to $8) yields 4x the original $1 you saved! Pretty incredible, uh?
Seriously, this is life-changing growth.
Remember though, you will only get that ‘last doubling’ if you started saving in your 20s.
‘Set Your Sights on Age 30’ thus refers to setting specific savings goals for the relatively young age of 30.
Doing so can set you up for life!
About Sherpa, Jeff Tyburski
Thank you to guest columnist, Jeff Tyburski, founder of "Your Sherpa."
Your Sherpa teams up with parents to bring financial literacy educational content to teens and young adults. Your Sherpa has a unique approach to teaching financial literacy, offering a roadmap from start to finish (a true personal process with the life skills and mindset to succeed). Check out our video lessons, FREE eBook, blog, and more.
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