money Retirement can feel so far off when you're young. It can be difficult to imagine yourself aging and becoming older. It can be difficult to picture yourself in five or 10 years, so picturing yourself in 40 years is almost impossible. But it will happen and so you do need to start thinking about your future. You’re never too young to start putting money aside for your retirement. Your future self will thank you. It’s important that you start saving from your very first paycheque. Here are some tips for planning your retirement saving now, right from the start. 1. Understand the power of compound interest Your best friend in your retirement saving journey, compound interest is a magical force. It is interest building on interest. Compound interest is why it’s important you start saving early. The money you save early in your career is the most valuable money you’ll ever save due to the time it will have to earn compound interest. 2. Understand why saving is more important than spending As you start on your retirement saving journey, it can be tempting to give in to the urge to spend rather than save. You’ll see your friends buying new clothes and shoes, fancy cars and big houses. It can all seem so important that you own those things too. But remember, they won’t make you any happier but having enough money for your retirement will. Even though this doesn’t guarantee you immediate happiness, you will enjoy seeing your retirement accounts growing. 3. Understand where you should put the money you’ll save It isn’t enough just to start saving money. You need to know where to save it. The reality is you can earn a lot more interest if you’re careful about where you place your money. For instance, you won’t be able to live during retirement on money you save in the bank. You’ll have to invest your money in retirement annuities, pension funds, short term investments, bonds or equities. 4. Understand why it’s important to avoid lifestyle inflation When you’re working and receiving regular increases, it’s important that you don’t give in to the temptation of lifestyle inflation. Don’t blow all of your additional money immediately, rather ensure you save it. In this way you’ll not only keep your expenses minimal but you’ll be spending less than you earn, which is key to your future financial success. Image: Pexels

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