Start Now. Start Small. Save BIG!

7 can-do steps for becoming a saver early in life

The Future Starts Now

Fresh out of college, you might have some student debt. First-time home ownership is on the horizon. A car payment probably will soon enter the budget mix. And let’s be honest, you still want to have some fun – go to an occasional concert, hop on a plane for a winter ski trip, or attend a sporting match with friends.

Not much is left in the paycheck for saving. In fact, the sum might feel so insignificant, saving feels futile altogether.

But what if starting small led to big results over time? The most important advice about saving for your future is this: Start now. The second most important advice: Start small.

Here are 7 easy steps to get you going:


If most of your future is ahead of you, you might think, “I’ll have plenty of time later to save.” The corollary thought is, “I’m not making enough now to save. I’ll start saving when I make more money.”

Think like this, and you will become a spender instead of a saver. If you put off saving now, you’ll keep putting it off. When you make more money, you will spend more money.

Decide early what you want to be—a spender or a saver. Savers get in the habit of saving money. If you try tracking your discretionary spending for a week, you might be surprised at what you spend. Envision what it might look like to set these dollars aside instead of spending them. Even when you’re not making a lot, you can always save a little knowing that even a small amount compounded over time can yield a fortune.


Employers make it easier to save with attractive 401(k) plans. Contributions are tax deductible, accumulations are tax deferred, and in many plans the employer matches at least part of the contributions of the employee. For example, if your employer offers a 2% match, this means that when you contribute 2% of your salary, your employer will also contribute 2% for you, doubling your savings rate. This match is virtually free money. Take advantage of it!

Most employers also offer Roth 401(k) options. The big difference from a traditional 401(k) is when taxes are paid – and it matters a lot. For traditional 401(k)s, your regular contributions are made in pretax dollars, which reduces reported income. When you withdraw that money in retirement, it will be taxed as ordinary income. For a Roth 401(k), you pay taxes on funds now, but not when you withdraw funds at retirement. This means a saver who puts $6,000 into a ROTH 401(k) or Roth IRA is saving more for retirement than one who puts $6,000 into a traditional IRA. That’s because you’re taking the tax hit now and saving more tomorrow!


Set aside an emergency fund for unforeseen and unexpected costly events. You know they’re going to happen, but you don’t know when, so it’s always good to have a cash account ready for expenses like a car repair or to keep your household afloat if you are out of work for a few months. Most advisors recommend saving three to six months of spending expenses. But even a one-month buffer is better than nothing. When you use your emergency fund, work to replenish it as quickly as possible.


Insurance mitigates risk. Most of us get started with the essentials: car, homeowner’s, and health insurance. But guess what? When you’re young, it’s good to have life insurance, too. For one reason, it might save you money over a lifetime if you purchase life insurance young. While there are many contributing factors that determine life insurance premiums, when you’re younger, you’re generally healthier—and less of a risk. That means insurance premiums are considerably lower the younger you are at the time you apply for insurance. Term insurance – which lasts for a fixed period – is a good option. While it’s not fun to think about the reason for insurance, consider a plan that will pay enough to cover your burial expenses, remaining mortgage payments, and college for your children if you die.


“Estate” is a fancy word for your stuff. Estate planning is making sure everything you own is taken care of when you die. As much as possible you want what you leave behind to help take care of your loved ones. A good plan can make a big difference for them.

It’s good to understand the basics of an estate plan, and make sure you have them in place. A power of attorney for health care lets you appoint someone to make health care decisions for you since only once person can serve at a time. A power of attorney for your property does the same for your property and financial matters. IRAs and 401(k)s provide an option for beneficiaries who will receive the funds when you die. It is important to name beneficiaries and update those names regularly as your life changes (for example, you get married or divorced, have children, etc.) Lastly, wills and trusts provide direction on how your assets should be distributed when you die.


Creating a spending plan helps you focus on saving more each month. The essence of a spending plan is not cutting back on lattes. It’s how you plan for the big stuff that will have a bigger impact on your long-term financial success: how much you save and what you spend on fixed expenses, like your rent or mortgage payment.

A basic budget for broad categories helps you see where your money is going each month. Any dollar amount left over should be saved automatically.

Once the big items are taken care of, think of other ways you can save more. Negotiate for a raise. If you get it, keep your expenses the same, and save the balance. Cut your fixed expenses if possible. Review and consider your biggest spending items before you commit to them. If you’re not yet a homeowner, think about your monthly mortgage payment before you purchase. If you did purchase a home when rates were high, consider refinancing at a lower rate.


Don’t save just to save. Consider how saving will help you reach your life goals. Write the goals down, or better yet visualize them with a picture.

Think of 401(k)s and IRAs as financial vehicles to help you reach your goals. By the magic of compounded interest, they will get you to where you want to go if you get in the habit of contributing regularly to these funds.

The earlier you get started, the longer your money will have to grow! If you are under 50, you can contribute up to $19,500 to your 401(k) this year. Talk to your HR department about an increase if you can. Save additional funds in an investment account via automatic contributions for things you want to do with your life and with your loved ones.

Don’t restrict your goals only to retirement. Plan to live well before age begins to restrict your capacity to do so.

HT|TC Wealth Partners is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC, member FINRA and SIPC. Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC. All information referenced herein is from sources believed to be reliable. HT|TC Wealth Partners and Hightower Advisors, LLC have not independently verified the accuracy or completeness of the information contained in this document. HT|TC Wealth Partners and Hightower Advisors, LLC or any of its affiliates make no representations or warranties, express or implied, as to the accuracy or completeness of the information or for statements or errors or omissions, or results obtained from the use of this information. HT|TC Wealth Partners and Hightower Advisors, LLC or any of its affiliates assume no liability for any action made or taken in reliance on or relating in any way to the information. This document and the materials contained herein were created for informational purposes only; the opinions expressed are solely those of the author(s), and do not represent those of Hightower Advisors, LLC or any of its affiliates. HT|TC Wealth Partners and Hightower Advisors, LLC or any of its affiliates do not provide tax or legal advice. This material was not intended or written to be used or presented to any entity as tax or legal advice. Clients are urged to consult their tax and/or legal advisor for related questions.

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