Presented by Member One Federal Credit Union
From a young age, you’re told to save money for the future. But when it comes time to actually put learning into practice, many of us just don’t know where to begin. A savings account is a great start, but are you aware of how easy it can be to earn more on the money you already have? Here are five tips to get going with investing.
Do your research. You can read books and online articles, listen to podcasts, and even attend classes to learn more about investing. While it’s important to arm yourself with knowledge, nothing beats face-to-face advice, especially if you’re new to investing. Meet with your financial institution to see what they offer and to get that personal, expert guidance.
Start with low-risk options. Money market accounts and share certificates are examples of low-risk investments that are available at most financial institutions. These can be good ways to jump-start your investment goals because the chances of you losing any money are minimal.
Save for retirement now. Whether it’s a long way off or could happen in a few years, it’s never too early (or late) to think about retirement savings. One of the best ways is to invest in your employer’s retirement package. Speak to the human resources department to understand how the package works and if your employer is willing to match contributions. If they do, max it out so you don’t leave any money on the table.
Budget for investing. This is where setting a budget comes in handy because it can help determine how much you can afford to allocate toward investments. Five percent of your take-home income is a good place to begin. You might need to make some adjustments or take money from your discretionary fund to get to that five percent, but don’t take this amount from your fixed expenses like bills, emergency fund, or savings goals.
Give it time. Keep in mind that there are many paths to building wealth. It generally takes years of disciplined and strategic financial planning to get there. If you have dreams of retiring, start saving as much as you can as early as you can. Set a goal and keep that in mind throughout your saving and investing journey. You’ll be making some sacrifices now, but it will be worth it when you retire someday.