Experts enjoin us to save, build a nest egg and have an emergency fund – and it sounds difficult, no matter your age or financial circumstances, when you’re getting started.

But it doesn’t have to be too hard; it just has to be hard enough to see results and reap the rewards of your thriftiness in later years.

Joel Larsgaard, a 30-something host of the Pour Not Poor podcast (, says starting to save in your 20s is your best bet.

Joel Larsgaard is the 30-something host of the Pour not Poor podcast. Photo courtesy Joel Larsgaard

“I think when you are fresh out of college, the best way to save money is to live like you’re still in college,” he says. “Usually you get that first paycheck from your first real job, and you kind of start to live a lifestyle that reflects that.”

Larsgaard says it’s best to resist temptation for a while.

“So now you move from eating ramen to this 40 hour a week job, and you don’t want to eat ramen anymore,” he says.

Lifestyle creep has already taken over when you realize you are happily shelling out money for someone else to mow your lawn, clean your house and cook your meals. You buy takeout instead of cooking at home and drop hundreds of dollars on entertainment that you only dreamed was possible before.

But Larsgaard says all that should, and can, wait.

“If you wait to elevate your lifestyle, and put that excess income toward savings and investments, such as your company’s 401K, building up an emergency fund, that’s a good place to start,” he says. “Later, you’re going to thank your just-out-of-college self that you were dedicated to saving or investing a portion of what you make.”

Experts say you should have a three-to-six month emergency fund saved at all times. And even the smallest investments early in your career add up for long-term financial success in the future.

Larsgaard suggests using your employer’s 401K or 403B contributions as one of the easiest ways to get started.

“Make sure you’re taking advantage of the company match,” he says. “Eventually you do want to increase your lifestyle; in your late 20s, early 30s, you want to buy a home, have children, and then you’re in a position to do that, to start making those big purchases.”

However, saving and investing are not “set it and forget” kinds of project. 

“Investments 101 teaches you the first rule is to diversify,” says John Cary, a Morgan Stanley financial advisor in Tulsa. “If you’re an executive and you have options to buy stock in the company you work for, you end up realizing at 50 years old that half your stock is invested there. What happens if the company goes bankrupt? Investing in your company stock is a good idea, but diversification is a smart thing to do, too.”

As you begin to reach your financial goals – you have that six-figure income you always dreamed of or you earlier investments are paying in spades – it’s time to reconsider your plan. 

“They tell us we’re all living longer. Therefore, it’s going to take more to financially sustain us in retirement,” Cary says. “The rule of thumb has generally been that you need to have 70 to 80 percent of your pre-retirement income to live on for the remainder of your life. I don’t believe that is enough. You need to plan to have 100 percent.” 

A person accustomed to living on $60,000 a year – after taxes and expenses – is generally encouraged to plan so they have around $48,000 a year to live on during retirement. 

“My argument is you need at least 25 times your pre-retirement income in savings when you begin retirement,” Cary says. “If you make $60,000 a year, you need at least $1.5 million in your retirement account, unless you’re going to significantly reduce your lifestyle.”

That number probably sounds insurmountable to a $60,000 a year earner, but not with careful planning, and the sooner you start the better.

Avoid bad debt, such as credit cards, signature loans and lines of credit. Build a savings account and, when you can, start investing. 

“The biggest mistake people make is trying to manage it themselves. The amateur investor often ends up selling when they’re at the bottom, or think they should just stay in there forever after they buy in,” Cary says. “The experts in behavioral economics tell us that the average individual investor makes the same mistakes over and over again.”

That’s why you might want to hire a money manager, someone with ample experience who spends every moment of their day following the market while you go on about your busy life.

“A lot of people start in their 50s, trying to do it all on their own, and they get into their 60s and find they’ve only grown it 1 percent a year, and they don’t have much more than they started with,” Cary says. “I say, don’t just wing it.” 

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Make Saving Easy

Following are suggestions on saving a little of your hard-earned cash – but don’t save just to have more money for expenses. You have to turn that money you save into an emergency fund, a source for investing and a retirement fund by being diligent about banking the excess. From $1 to $100, it can eventually add up to financial security for you.

Loose change Putting aside just 79 cents a day over one year gets you nearly 30 percent of the way toward a $500 emergency fund, a good goal for those starting out.

Match indulgences If you splurge on a frappuccino while out running errands, put the exact amount into your savings account. You’ll soon see where you’re money is slipping away to, and you’ll build savings pretty quickly.

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24-hour rule Stop impulse shopping by waiting at least a full day for every purchase more than $25.

Round up Write every expenditure in your balance book as a rounded-up figure. Instead of $12.84, make it $13. Then don’t spend it and forget about for a while. Later, balance it all out and put the excess you’ve racked up into savings.

No-spend day Do this at least once a week after making sure you have a full tank of gas and there’s change under the floor mats for coffee. Go ahead and leave your debit card and credit cards at home.

Wise Savings

  • Financial adviser Dave Ramsey has five steps to guide the process of investing during a lifetime.
  • Master your finances every month by setting a budget, paying off debt and saving an emergency fund for rainy days.
  • Save 15 percent of your income for retirement once you’ve paid off debt and completed an emergency fund for six months worth of expenses. This might not happen until your 30s or when you’ve established a steady income.
  • Be smart when picking a growth stock mutual fund to invest in. Stay diversified by spreading your investments across multiple mutual fund categories.
  • Invest with a long-term perspective in mind. Saving is a marathon, not a sprint, especially while raising a family.
  • Find an experienced investor to guide you. Odds are you don’t know everything, so get a pro to show you the ropes.

Wise Debt

According to National Debt Relief, one of the best ways to make debt an ally rather than a burden is to continue your education. The higher education you accomplish, the better paying career you will acquire. High-income jobs allow you to pay off student loans quicker. While continuing your education, use your credit card to build a future. When the time comes for you to buy a car or house, you’ll be ready. Even though you pay your credit card bill at the end of every month, it still doesn’t show strong credibility to potential lenders. That’s when debt comes into play. Build some minor debt on your credit card and prove your worth by paying it off in a timely manner. This creates a scenario for you to fall back on in the future as a bargaining chip.

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