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Start Small, Start Now

by AOG Wealth Management

I’m sure you’ve heard the phrase, “I can’t save now, I don’t have enough to save!” or “I’ll start saving later.” Each of these common phrases may be valid for a time, but it is best to start saving small and to start as soon as you can. Here is how to begin saving now, even in small ways:

  1. Payoff Debt. To be in a better position to save, pay down your debt efficiently. Payoff the higher interest rates first while meeting the minimum payments for the lower interest debt. Then as you pay off the higher interest rate debt, apply those same payment amounts to the lower interest rate debt. 
  2. Build an Accessible Savings Account. Banks now offer easy ways for us to build our savings accounts to a comfortable level. You can set an automatic transfer from your checking account to your savings account every month, every two weeks, or every week usually to make sure you are saving what you have budgeted to save. It is a good idea to have 3-6 months of expenses saved and accessible. 
  3. Take advantage of your company 401k and match. Most companies, organizations, school systems and churches offer an incentive to their employees to invest for the longer term. Once you are eligible, sign up to participate in the company 401k, 403b or similar plan and begin investing a percentage of your income for retirement. Typically, you will want to start with a smaller percentage, such as 3% and then increase that percentage over time as your budget adjusts or as your compensation increases. A great first goal as you are starting out is to reach the contribution percentage your company may require before they “match” the contribution. The company will incentivize you to contribute to the plan by offering the match. The funds deducted from your paycheck are deposited to your retirement account pre-tax. When you are age 591/2, you are eligible to withdraw the funds penalty free, but are required to pay income tax on the withdrawal amount. Once you reach age 701/2, you are required to begin distributing the funds from your retirement accounts. There are other uses and exceptions to these age designations, but those can be discussed with your financial advisor or tax advisor if a need for the funds arises.

If you would like to speak with a financial advisor about how to begin saving now, call AOG Wealth Management at 1-877-600-3573.

Securities offered through TD Ameritrade Institutional Services located at 7801 Mesquite Bend Drive, Suite 112 Irving, TX 75063-6043. Investment advisory services offered through AOG Wealth Management, Inc. AOG Wealth Management, Inc. is neither an affiliate nor subsidiary of TD Ameritrade Institutional Services.

Category: Wealth Management