Too young or old? When is a good time to start saving?

Unless you were brought up in a financially-savvy household, chances are saving isn’t high up on your priority list if you’re young. There’s always more time right? And when one is young, with an active social life placing such big demands on one’s time and wallet at a time when you’re earning comparatively little, how are you supposed to find the time to save and invest?

As tempting as it might be to delay starting your journey to financial freedom until you’re on more solid financial footing, it’s never too early to start investing in yourself. Even if you’re only putting away small amounts of money every month, it can make a big difference later on.

That does not, however, mean that all is lost if you have put off your saving and investment plans until later in life. With a few small tweaks, you can supercharge your future, ensuring that you achieve your goals as quickly and efficiently as possible.

Start early, keep compounding

One of the most important reasons for beginning your quest to futureproof your finances early is the power of compound interest. While Albert Einstein probably didn’t call it the most powerful force in the universe, the sentiment is accurate.

In the simplest possible terms, compound interest is the interest you earn on interest. Let’s say you put R200 into a savings account one month. In the first month, you’ll earn interest on that principal amount. For the sake of simplicity, let’s say the interest on the account is 10% (although you’d be lucky to get that rate anywhere). At the end of the first month, you’ll have R220. When the interest is paid out at the end of the second month, you’ll have R242, and so forth.

The earlier you start begin, the more powerful the compounding effect can be.

You can also increase its effect by putting away a set amount every month. To return to the example above, if you add another R200 to your initial amount in month two, then you’ll have R462. Keep doing that over 10, 20, or 30 years, and you’ll have a sizeable sum at the end of it.

Getting started later? You can still make it work

Of course, that’s not to say that things are totally hopeless if you start investing later. Far from it.

While compound interest obviously works best when it’s given sufficient time to do so, you can still unlock its power later in life.

In order to do so, however, you have to make up for the time lost by putting away a little more every month. If you’re in the fortunate position to have paid off your home and to be earning well, that’s not too difficult to achieve.

But even if you still have major financial commitments, you can make up ground, especially if you use the best available tools and technologies.

Round up, automate, ‘set and forget’

Whether you’re starting out on this journey while you’re still young or you’re a little older, there are a number of strategies, tools, and technologies you can use to supercharge your way to a financially secure future.

‘Rounding up’ purchases to effectively convert your change into automatic savings is, for instance, something that’ll be familiar to many South Africans. Unfortunately, the savings pockets accounts that many consumers use either have low or zero interest rates. How much more effective could such a virtual savings jar be if your rounded-up purchases went into a proven financial instrument.

Similarly, how much more could you grow your investments if you could automatically set aside a set amount of money every month and have it put into a high-performance digital asset?

This kind of “set and forget” approach not only makes saving simpler but also means that you’re more likely to take the kind of long-term approach to plan for a future that helps you avoid savings scares and panics. Aside from being less stressful, it’s an approach that has historically resulted in the best returns for most investors.

No matter when you start your journey, it’s ultimately important to remember that you’re doing it for your future self.

And when you look back at the day you start accumulating savings on autopilot wouldn’t you like to know that your younger self used the best possible strategies, tools, and technologies?

Justin Asher is head of marketing and strategy at upnup.