At the start of the New Year we all proudly wear badges of optimism, vowing to change our bad habits and adopt new ones. Health and fitness always seem to top the resolution charts, but over the past few years I’ve overheard many conversations about the desire to clean up our own personal money mayhem.
The first hurdle to overcome in the journey to financial freedom is being willing to ask for help, it’s the only way you will find the answers to your questions. If you’ve made a commitment to yourself this year to get clear and gain control of your money madness, I hope this advice from my go-to financial advisor will help to get you off on the right foot.
Morgan Castner is a Financial Advisor at Wells Fargo Advisors, LLC. and also happens to be my older brother, whom I have on speed dial for all my financial questions. I sat down with him to get the answers to a couple questions I’ve been hearing my peers ask for years.
Chelsea: Can you explain why it’s so important to start saving for retirement in our 20’s?
Morgan: Absolutely. A lot of people just starting out have trouble saving money, paying their rent, grocery bills, etc. and that’s totally understandable. I’ve talked to numerous people your age and they tell me: “look I can’t afford to pay my expenses and save money.” And I tell them you really can’t afford not to start now. You need to save your money as early as possible. The time value of money and the power of compounding interest are so great, even saving a little bit each month and putting it to work is crucial to simplifying your retirement path down the line. You’re the employee of your boss; make your money your employee. Put your money to work, and do it early.
Chelsea: That’s a great way to think about it! I also hear from my peers a lot about the confusion around how and why they should open a 401k plan within their company. The motivation seems to be lacking, especially since they were just handed a packet with financial jargon they can’t understand, it’s easier to just forget about it. How could my peers start thinking about 401k’s differently?
Morgan: When someone gets that stack of paper for signing up for a 401k they take it and say I’ll deal with this later, but later usually means never. The worst thing you can really do is take a problem like this and sit idle, doing nothing. A lot of companies have contribution matching, whether they match 3% or 5% that’s a question you need to ask, but that’s free money. You’re company is giving you money to pay your future self. I know it’s tough to save the money, but do everything you can to start now; it will make your life so much easier in the future.
Chelsea: That’s a really good piece of advice to help people focus more on the money coming in rather than the money going out, even if you can’t touch it for a while. Thank you Morgan for talking with me, and I hope that your insights will help to motivate others, like it did for me, to put a solid retirement plan into place.