Patience is a virtue, but not when it comes to starting to save. The longer you are waiting to start saving, the harder it can be to put money away and the longer it will take to reach your savings goals.
Here’s the impact of waiting to start saving, and why you should think about registering for an account with Offspring today:
Waiting to start saving can make it harder to reach your goals
Simply put, if you wait a year to save for something, then you have to make up for that one-year difference later on down the line. If you don’t make up for your losses by saving more over a shorter period of time, then you’ve missed a whole twelve months of savings, bringing you a step closer to the deadline, but two steps back from your goal.
Each month that you are waiting to start saving in favour of spending either increases the amount that you will have to save in the remaining months or pushes out the date at which you will reach your goal. Starting to save earlier allows you to extract maximum benefit from the power of compounding – Allan Gray.
You may never get started!
We’ve all given into it in our daily working lives, but when procrastination rears its ugly head when you’re trying to save for something meaningful, you may never reach your goal. For example, if you haven’t been saving long and there is an emergency, your saved money may have to go towards that.
Another common savings problem happens when you haven’t separated the ‘saved’ money from your normal bank account and you simply spend it all during the month without even thinking. Tea Nicola from WealthBar explains that we can easily go out and spend £1000 on a new television and feel good about our purchase – but saving money doesn’t have that same rewarding sense of instant gratification. ‘when [we] put the same amount towards [something like] your retirement savings, the perceived reward seems somewhere in the distant future.’ This ideology can puts off saving altogether, because we prioritise the instant spend over future acquisitions.
“After 32 years of advising clients I cannot remember one client who in later life and approaching retirement thought they had saved to much or started too early. Saving is easy to put off but a little goes a long way. Perhaps don’t buy two of your regular coffees a week and save the money instead” – Jim Grant of Fidelius Group
Compound interest from savings is an amazing way to grow and preserve your money – it’s essential interest on your interest! According to Starling Bank, ‘this can generate a snowball effect that adds up over the long term’. It’s an easy way to make money, without actually putting any extra work in to save.
If investments are returning 9% per year and you need to meet your objective in 10 years’ time, delaying saving for just 18 months will increase the amount you need to save per month by more than 25%. With less time on your hands, the cost of a delayed start is naturally even more pronounced. – Allan Gray
How do I start saving?
Luckily, you can start saving today with our Offspring app. Anyone can set it up, and it’s easy to do! Offspring is the simple way to turn your family and friends into a community of savers, who together will help you achieve your savings goals. One of the best aspects of our app is that you can start saving at any time and get people involved in your goals when you decide. You can start a savings goal now before a child is born to get a head start on all the essential equipment you’ll need when the baby arrives. You can also start saving now for after your child is born, so you’ll be ready for any financial milestones that come your way.
Offspring is great for parents who want their children to go to university or travel the world and can provide grandparents and godparents the chance to help with the savings too. However, the best way to reach these goals is to start saving today!