I think I’ve always been a “good saver.” At least, that’s the impression I get from my mother. I vividly remember the Nestle’s Nesquik shaker cup that served as the piggy bank to hold my savings for my first bike – I was required to save $10 toward it. That takes a while on a 25-cent-per-week allowance. I then moved on to a candy box that held my readily available liquid assets until I started to carry a billfold. I began contributing to a passbook savings account in about third grade, and by high school my parents helped me set up a money market account that paid higher interest. In 1979, it paid much higher interest!
During college, I was able to maintain my savings well because my parents covered my tuition and my room and board. I am more appreciative of that gift today than I was then! I also had jobs that covered the rest of my expenses and allowed me to save a little more.
After I graduated college and began adulting, things got more difficult. By this time, I was married, and financial decisions were not solely up to me. I became a father, and we lived in an area of the country with a very high cost of living. I was earning a good salary and still able to save, but it was much more stressful than it was when my life was simpler.
Over the next 15 years, I was able to build a respectable retirement account, but I really didn’t have any other financial accomplishments during this period. I was frustrated and I felt like I was falling behind. I wasn’t meeting my own expectations. My first marriage ended and a few years later my employer began closing so I needed to make a career change. Those events pretty much drained the retirement accounts. I had just turned 40 and felt like I was starting over as I realized I was undeniably middle-aged. Ugh!
This hasn’t been the encouraging, inspirational story that I would like to have shared – yet. But that is really the point of this piece. The traditional advice on when to start saving and investing is to start as soon as you start getting a paycheck. Or yesterday! That is sound advice, and it is ideal. But life is rarely ideal. Health concerns, family situations, career and other circumstances frequently interfere with the path to financial security.
During this difficult time in my life, I understood that I had an opportunity to start over. I couldn’t (and shouldn’t) forget the past. But going forward, each day I could make decisions and take actions that serve my values and move me toward outcomes that I value. That opportunity and that realization have been life-changing. That was a short 20 years ago.
My career change was becoming a financial advisor with a mutual fund company. I learned the business, became a CERTIFIED FINANCIAL PLANNERTM practitioner and I realized that I didn’t like working for a commission. I eventually found a home at Syverson Strege where I can serve my values, help clients and earn a good living.
I also met a wonderful woman whom I eventually convinced to marry me. I am so thankful that she did marry me, and she says she would marry me again, too! We worked together to establish a sound financial plan. And we began to make financial progress! It was slow at first. It took patience, attention and consistent choices. But year by year the progress was obvious and gratifying. We have become financially secure. We have developed realistic expectations, retired debt and saved resources. Twenty years ago, that set of circumstances was hard to imagine.
So, to get back to the question that started this piece. “When is the right time to start saving and investing?” It is – in fact – as soon as you can. That said, don’t let mental noise get in the way of getting started.
In my work with clients and prospective clients I’ve occasionally heard, “I missed the opportunity to save early. I will never get there, so why bother at this point?” The answer to this question, which is usually rhetorical, is that taking small steps every day WILL provide improved financial security, more choices in life and more peace of mind. Building a sound financial base is not like cramming for a test. It takes sound, small daily choices that lead to habits. Truthfully, that would be a better approach to good test grades, too!
I hope that the key takeaway from this piece is that it is never too late to start. A late start cannot make up for lost opportunities. But even a late start is a start toward a feeling of accomplishment and peace of mind.