Turn Small Savings Into a Big Nest Egg

Tue, 10/06/2009 - 09:25 | Family & Financial Planning
I came across this article this morning and thought I'd pass this along just in case you missed it. We all hear all the time how must a little can go a long way when you think 10, 20 or more years ahead. For a lot of people that seems like a life time.
 
What caught my attention about this article was how simple this plan is, but instead of using this savings for your retirement maybe instead think of it as your kids collage future; or an after graduation trust for them.
 
“According to the U.S. Bureau of Economic Analysis, the personal savings rate of Americans has ranged between -1% and approximately 4% between the years 2005 and 2009. “
 
So let's take all us adults out of the equation for a moment and think about what this is doing to our kids. Our kids do not hear us saying NO to that new video game, extra sports channel, On Demand movie or trip we cannot afford. They do not actually see us balance our check books, pay for cash, or hear us talk about saving.
 
“If you eliminate $100 of wasteful spending per month and instead channel that cash to an investment vehicle that yields an annual interest rate of 10%, that translates to more than $75,000 over 20 years, and more than $500,000 over the course of 40 years. “
 
I agree, it doesn't look like a lot of money and non of us can retire or send our kids to college on $75,000. But the bigger exercise here is more than that $100 per month, it is teaching our kids how to plan for their own future when we no longer can support them.
 
A little more food for thought …. “If you work for a company that matches your retirement savings contributions, absolutely take advantage of it. It is basically free money. Additionally, the increase in monthly contributions translates into an exponentially larger nest egg over the course of a lifetime.”
 
Read the rest of the article and see how you can adopt this for your family.
 

David
Executive Director
Families Like Ours,Inc.
GSBA Nonprofit of the year