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Is generosity in your genes?

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I have always assumed that the American spirit of giving to those less fortunate was a consistent bond we all share. On a recent business trip I stumbled across an article from the Chronicle of Philanthropy that was shocking. This article debunked my naive perspective. A few facts – the rich are not the most generous, the highest givers in our country earn between $50,000 -75,000. In addition there are strong regional differences. The top two states for giving are Utah (10.6%) and Mississippi (7.6%) (Alabama, Tennessee and South Carolina round out the top five) and the bottom two states for giving are Maine and New Hampshire at 3.3% and 2.5% respectively. Wealthier people who live in more diverse areas give more than people who live in homogeneously wealthy neighborhoods and more religious areas of the U.S. are more generous.

In my upbringing, I did experience a weekly tithing ritual and that was how I learned to calculate 10% of any number, something that has helped me in tipping since that time – I just double the tithe amount. So, I would fall into that category of being impacted by religious upbringing. So how does our family decide on our charitable giving and the amount? We are actively trying to get to a 10% number. As our income increased, our giving did not match, so for the last several years, we have tried to be more deliberate and increase our gifts until we get to 10%. We currently are at 8% as a family. We were recently told by our advisors that we are one of the largest givers in their book of business – and I thought they were just paying us a compliment – but maybe they were being honest!

What would it mean if all of America will give 1% more to those charities that are meaningful to them? Think of the impact that would have on our country. What would it offer to the next generation? I say, let’s start a generosity movement….what do you say?

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Six tips for how to save money during the holidays

If this holiday season has your head is spinning and you're at a loss for how to save money during the holidays faster than the Sugar Plum Fairy can pirouette, you’re not alone

If this holiday season has your head is spinning and you’re at a loss for how to save money during the holidays faster than the Sugar Plum Fairy can pirouette, you’re not alone

If this holiday season has your head is spinning and you’re at a loss for how to save money during the holidays faster than the Sugar Plum Fairy can pirouette, you’re not alone. We’re all at a loss when it comes the latest holiday gifts. Between the iPad 2, Kindle Fire and Wii Fit, toys seem more high-tech and high-priced than ever and many families are still reeling from the recession. “How can I afford to fulfill my kids’ wish lists if I couldn’t even take a vacation this year?” you might be wondering.

Well, my first piece of advice is to stop worrying. There are several tricks to save money to things you can do get through the holiday season without breaking the bank or abusing the eggnog. Here are some of my favorite holiday-savings tips on how to save money on holiday spending:

Create a holiday budget and stick to it. I normally suggest spending no more than 1.5% of your annual take-home pay on holiday gifts purchases. If you’re using credit cards to pay for everything, this is an amount that can be easily paid off by February. This also means that if you allot yourself $100 dollars per recipient but spend $150 on Mom’s cashmere sweater, your dad or brother might have to get that $50 DVD set instead of that $100 golf set. Over-spending on each person is the easiest way to break your budget.

Make a holiday gift list; check it twice. You should know what you’re buying, who the recipient is, and how much you want to spend per item well before you walk into the store. This will help you stick to your budget (see above) and prevent impulse purchases!

Treat holiday gift giving it like a research project. It may not sound fun, but do your homework, and give yourself enough time to do the work. If you rush, you’ll make hasty decisions that will cost you. Find out which stores are running promotions, and don’t be afraid to go to multiple stores to get the best deal on a certain item. If you don’t see what you’re looking for while you’re out, don’t force yourself to buy something just because you’re in a store. Wait, brainstorm some more, and get it next trip.

Don’t shop if you feel like Scrooge. If you’re in a bad mood, you are more likely to use retail therapy to feel better. Don’t do this! Remind yourself of your long term savings goals and that retail therapy is just a feeling. When I feel grumpy while shopping, I just leave and do some holiday cooking. The stores will still be there when I feel better the next day.

Use gift-cards to your advantage. If you’re like me and have a small stockpile of gift-cards left over from birthdays and other holidays, now is the perfect time to use them. It’s like bonus cash, and no one will ever know you bought their gift using a gift card.

Team up. If you’re looking to save money, talk to your siblings or cousins about doing a group gift for someone. An LCD TV may be outside your price range, but divided amongst your seven cousins, it suddenly becomes reasonable — and Grandpa will be thrilled. EBay Group Gifts makes it even easier to do this: it digitizes the process so you’re not running around collecting money from everyone.

Do you have tips for saving money how to save money during the holidays? We’d love to know! Share them.

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3 steps on how to be grateful when life gives you lemons

Trust me, I’ve always been an advocate for finding gratitude even when life gives you lemons, but I’m willing to admit that there are situations when it feels near impossible to turn on the holly-jolly.

Trust me, I’ve always been an advocate for finding gratitude even when life gives you lemons, but I’m willing to admit that there are situations when it feels near impossible to turn on the holly-jolly.

Growing up, we were all taught to be grateful. During the holidays it’s hard not to be bombarded with overly jolly messages of giving thanks. Trust me, I’ve always been an advocate for finding gratitude even when life gives you lemons, but I’m willing to admit that there are situations when it feels near impossible to turn on the holly-jolly. Emotions like heartache, dissatisfaction and grief can be overwhelmingly large walls blocking out the light in the dark that would allow you to see the path to gratefulness.

For most Millennials, money is an emotionally charged subject that holds us back from feeling positive and free. Dissatisfaction with entry-level salaries, stress from our mountain of student debt and resentment for having to turn down dinner offers from friends, all create a depressing storyline that never seems to change. We’re just not sure how to be grateful for that.

But here’s the thing. We are all in control of our own stories. It’s up to you to figure out how to be grateful in every situation. You’re the author who decides how you feel, and how you feel effects what you do, and that outcome reveals a new feeling for you to take action on, and so the cycle keeps evolving.

When you’re in the throws of a difficult situation it’s imperative that you break the bad feeling cycle in order for the condition to improve. Of course this isn’t easy to do, but if you follow these three simple steps you will be given the tools you need to start tearing down the emotional blockages to find the light in the dark.

Pause and greet the situation. When a negative event aggravates your money story it’s natural to want to moan, complain, get angry and lash out. When these emotions bubble up, freeze and acknowledge them with respect and curiosity, like you would a stranger. Then talk aloud about what’s going on in order to prevent yourself from getting swept down the emotional river.

I thought I had enough money to make it this month, but my eye doctor visit was way more than I thought it would be. This is stressing me out because now I don’t think I can go out to dinner with my friend.

Surrender in order to make room for what can be. Surrendering is not a weakness. Rather it’s the brave thing to do when you realize your resources are low and you know you can’t win the battle, but that doesn’t mean that the war is over. Acceptance allows you to let go of the pain from the past, freeing up your mind to think creatively and productively about your next move.

I recognize I can’t afford to go out for dinner, but I don’t want to miss my friend because of that. Maybe she would be up to coming over and cooking with me. We could even choose a recipe together out of that cookbook I rarely get to use.

Use your tools and start excavating the light. Now that you’ve stopped yourself from floating down the emotion river, and accepted your situation, you’re in a better frame of mind to write the next scene of your story. When you choose an action that gets you closer to happiness, or even just hopefulness, giving thanks is easier to do.

I’m excited that my friend is coming over; it will be much easier to talk to her in a quiet and more intimate place.

From now on, when life gives you lemons, acknowledge your emotions, accept the situation and make some lemonade. Then, take time be grateful.

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Tips on charitable giving that won’t hurt your bottom line

When you find a cause you wholeheartedly support, it’s easy to jump in with both feet and your wallet open. But the key is to give as much as you can, without sabotaging your own financial needs — or your long-term goals, like retirement.

When you find a cause you wholeheartedly support, it’s easy to jump in with both feet and your wallet open. But the key is to give as much as you can, without sabotaging your own financial needs — or your long-term goals, like retirement.

Giving to a charity you believe in is an investment of sorts — not the kind you put in your portfolio, but the kind you make in your psyche. People who give back have been shown to sleep better and exercise more. Giving back has been known to make us healthier and happier. And that means, in a round about way, that giving back can improve your bank account balance — happy people earn more money, according to a recent piece of research published in the Proceedings of the National Academy of Sciences of the United States of America.

When you find a cause you wholeheartedly support, it’s easy to jump in with both feet and your wallet open. But the key is to give as much as you can, without sabotaging your own financial needs — or your long-term goals, like retirement. Here, how to strike a balance:

Work it into your budget. Research from Giving USA suggests that those who give generally hand over an average of 2% of their disposable income. To settle on an amount you feel comfortable with, you first have to know what your disposable income is — and many people don’t. That means creating a budget and including charitable donations as a line item. Start by listing out your monthly take-home pay, then subtracting all of your monthly expenses (it’s okay to estimate, but when in doubt, round up). Include savings as an expense, and aim to save 10% of your income. That exercise will give you a feel for how much you can afford to give to a cause you support without sabotaging your own savings.

Make it automatic. Once you’ve decided where you want your money to go, and how much you want to give, make your contributions automatic. That way, you can be sure the money gets where it is supposed to go each month. Giving monthly will also help you stay on track. Otherwise, you may wind up with little left to contribute at the end of the year. A site like JustGive.org can help you do that through automatic deductions to the charity you choose, and many charities now accept automatic contributions as well by charging your credit card or debiting your bank account on a regular basis.

Give your time. If you can’t afford to give as much as you want to, you can always give of yourself. Talk to your favorite causes about what you might be able to offer. And if you have special skills — say in accounting or public relations — be sure to mention them. The same, too, goes for giving items. While cash is king, many charities will take donations of clothing, canned goods, even old cars.

Don’t forget the tax advantages. The fact that your donations are deductible (assuming you itemize on your tax return) can help you give more. Charity Navigator has a helpful calculator on its website that can help you determine the net cost of your donation, as well as the tax savings, based on your tax bracket. Let’s say your tax rate is 25%. A $100 donation actually ends up costing you only $75, after the tax deduction. Perhaps that means you can bump your donation up a notch.

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Stop punching a time clock and start pursuing your passion

If you want to stop punching a time clock and getting paid to pursue your passion, you have to be willing to take a few risks

If you want to stop punching a time clock and getting paid to pursue your passion, you have to be willing to take a few risks

If you want to stop punching a time clock and getting paid to pursue your passion, you have to be willing to take a few risks.

It took my husband, Zeb, and I, seven years to finish college. It wasn’t because we lacked the intellect or were partying too hard— it was because we were paying for it ourselves. We were fortunate in that I was on the Alabama GI Bill— because my dad is an injured Vietnam veteran, the state of Alabama paid my tuition and book fees for my college career, up to my last two semesters. But Zeb’s books and tuition came straight out of our pocket, as did our mortgage and other living expenses.

We worked multiple part-time jobs and Zeb took off a few semesters, simply to pay the bills and save for returning to school. We took advantage of Pell grants and any sort of financial aid available to us, decreasing our need for loans. We did leave school with some debt but it wasn’t overwhelming.

Because Zeb sat out semesters, I graduated before he did and began working fulltime as a nurse. We had health insurance! We could pay the bills without trying to figure out what we could pay late without being penalized! I didn’t have to put items back at the grocery store because our budget was so tight!

When I got my first paycheck, I sat in my car and cried tears of joy.

Some people say college is the best years of your life. For us, real grown up life was like a Caribbean vacation compared to the seven years we spent constantly working nights and going to school during the day.

I worked full-time while Zeb finished his degree in Building Science and was pregnant by the time he graduated and was offered a full-time job in Savannah, Ga., making more money than we had ever seen. His salary, although modest, was twice what I had been making as a nurse.

By the time we moved to Savannah, I had given birth to our first daughter and was pregnant with our second. We quickly realized the cost of childcare for two kids was going to take a large chunk out of my salary. Since I had always wanted to be a stay-at-home mom, we decided it would easier to start with one income, than for me to go to work and become dependent on two incomes then eventually have to cut back. We were used to a tight budget but we were still making more money than we ever had.

I loved being at home with my kids and the older Aubrey and Emma became, the funnier my days became. Our extended families were so far away, I began sending short stories about the hilarity of everyday life with my two girls.

Sidebar: I always, my whole entire life, wanted to be a writer. But because I wasn’t drawn to fiction and had no interest in being a reporter, I pursued nursing instead. It was stable and reliable.

As I began getting feedback from family and friends, I realized I had found something to write about. I started a blog and began outlining a book.

We moved again, had ANOTHER daughter (I KNOW!) and I continue to write. I realize in hindsight, I began treating my passion like a serious business. I read every book I could get my hands on about writing, how to get an agent and how to build my brand as a blogger.

I loved being a stay-at-home mom and anybody who tells you it’s not a fulltime job is a liar, liar, pants on fire. But I planned to go back to work as soon as our youngest, Sadie, began kindergarten.

I wrote constantly. My desk was in the middle of the girl’s playroom, I interacted with them as I wrote. I wrote while they were in preschool. I wrote with my laptop balanced on my knees while I nursed Sadie in the middle of the night. In two years, I had built I website with a solid following and had signed with a top tier literary agent.

We moved AGAIN, (but didn’t have another daughter!) and I slowly started making money as a blogger. It wasn’t an income but it definitely supplemented Zeb’s salary and made life a little easier.

I continued to treat blogging and writing as a business, which required a little overhead. I began traveling to blogging and writing conferences, to learn more and connect with people who could help me advance my career. I’m not going to lie— I felt guilty. I loved what I was doing so much that I worried I was going to spend more money going to conferences than I would ever make writing.

I was wrong.

By the time Sadie started 4K, my first book, Ketchup is a Vegetable & Other Lies Moms Tell Themselves had been published and I began getting monthly royalty checks which were more lucrative than the salary I had made as a nurse.

We didn’t foresee that the time I spent as a stay-at-home mom would turn into an opportunity to pursue my passion. But I am beyond grateful that I took a risk by believing in myself and treating a hobby as a job.

It was risky to pay babysitters for two years so I could write. It was possible the money I spent on conferences would turn out to be a vacation pursuing my favorite hobby. But, if you want to stop punching a clock and getting paid to pursue your passion, you have to be willing to take a few risks.

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Five tips for a smooth transition to a new job

Here are five tips to help you ease the transition to a new job, whether that means navigating office fridge politics or fitting in with new co-workers

Here are five tips to help you ease the transition to a new job, whether that means navigating office fridge politics or fitting in with new co-workers

According to research from the Bureau of Labor Statistics, younger baby boomers — those born between 1957 and 1964 — held an average of 11.3 jobs between ages 18 and 46. Twenty-six percent of those tracked held 15 jobs or more. And separate BLS data says that the average worker stays at a job an average of only 4.4 years.

Switching jobs frequently is clearly the norm these days, but that doesn’t make adjusting to your new environment any easier. Here are five tips to help you ease the transition, whether that means navigating office fridge politics or fitting in with new co-workers:

Listen. As the new kid on the block, it’s important to take a backseat for a while. Sure, you’ve been in the business a long time and you may have ideas you think should be implemented. They’re probably good ones. But don’t just jump in and suggest changes. Instead, spend some time learning the ropes and listening to your coworkers and superiors. You’ll find out if your ideas are something that they’ve tried in the past with no success.

Adapt. The ability to go with the flow when changing jobs is critical. Every company’s culture is different, so it’s important to be open and flexible to a new way of doing things. That might mean refreshing your skills to learn a new computer system, or wearing a pair of heels instead of the casual clothes you’re used to.

Innovate – respectfully. Once you’ve settled in, it’s fine to bring up changes or suggestions that you think would positively impact the company’s bottom line. Carefully start up a conversation about why you think a change would be beneficial and how it could be implemented, then listen to the feedback you receive.

Revisit your finances. A job change often comes with a salary change — ideally an increase, but perhaps you’ve left a job that left you unfulfilled for one that is satisfying but involves a pay cut. Either way, it’s important to take a look over your finances and see what should change. Maybe you need to cut back, or perhaps you can contribute more to a new 401(k).

Take advantage of benefits. Talk to your HR department about any perks that come with your position, like tax-advantaged ways to pay for out-of-pocket medical expenses or childcare, or stipends to offset commuting or public transportation costs.

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Are you saving for something as opposed to for someday?

Personally, I wish I had spent more time teaching my children about the discipline of saving and the financial security it can bring.

Personally, I wish I had spent more time teaching my children about the discipline of saving and the financial security it can bring.

National Save for Retirement Week has gotten me thinking about my own savings journey, especially when I was in my late 20’s – the age of today’s millennials. I have always been a saver, but in my early working days, I was usually saving for “something” as opposed to for “someday”. Contact lenses, a bicycle, for example, when I was in college, and later, as a new wife, saving for a car or a home purchase. But saving for the unexpected was really not on my screen.

Fast forward a couple of years, and I was a new mother who had decided to take a sabbatical from work and return to school. At that time, I was thinking about staying at home with our daughter and working part time after I finished an accounting program. My husband and I had some savings, so I wasn’t too worried at the time.

Then, eighteen months later, my husband was laid off as a recession hit his industry hard, and suddenly we were parents with an eighteen month old, a mortgage and no income. It didn’t take long for us to run through our savings – but we absolutely did not want to ask our parents for help. My parents still had three kids in college, and my husband’s parents were retired and would only be able to lend us money, if that. So we borrowed against the cash value of our life insurance, worked hard to find jobs and thankfully were both employed before we ran out of money.

So what did I learn? First, having savings for those unforeseen situations is absolutely essential and we should have prepared better for that. And secondly, it felt really good, once it was all over, to have been able to get through a tough time as a couple and figure it out for ourselves. We learned from adversity and I think that we grew up a lot as a result of that challenging time.

As I think about my boomer cohorts, however, and our millennial children, I believe most of us wouldn’t hesitate to rush in to help our children financially through a time like this – and I think we have raised our children to pretty much expect it. While most of my generation would never have asked our parents for financial help, I think we are guilty of having raised our children to do exactly that. Personally, I wish I had spent more time teaching my children about the discipline of saving and the financial security it can bring. I learned the hard way, but I have had a disciplined approach to saving ever since – whether it’s for retirement, college educations…. or a broken down washing machine!

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Retirement saving tips for children during National Save for Retirement Week

We’re in the midst of National Save for Retirement Week, which is a good opportunity to revisit your retirement savings and make sure you’re on track.

We’re in the midst of National Save for Retirement Week, which is a good opportunity to revisit your retirement savings and make sure you’re on track.

We’re in the midst of National Save for Retirement Week . And while I admit it’s not quite as exciting as Peanut Butter Lovers Month (coming up in November), it’s a good opportunity to revisit your retirement savings and make sure you’re on track.

I’ve done that myself, and thanks to a whole lot of help from the market, I liked what I saw. And so instead of ramping up my retirement savings efforts — I already mostly practice what I preach — I’m using this week as an opportunity to get my kids off on the right foot.

Sure, I talk to them about money plenty. But we don’t talk a great deal about retirement, mostly because — at age 17 and age 19 — the subject makes them groan. Retirement seems very, very far away.

And it is. But as I have witnessed first hand, it creeps up fast. And it’s never too early to be prepared. Here, the lessons I plan to pass on to my kids this week, in case you want to share them with your own.

Earlier is better. When it comes to retirement, when you save is every bit as important as how much you save. I know that a few examples help to drive the point home for my kids, so I did a little math. If a 20-year-old starts putting $50 a month — a reasonable amount — away right now, he’d have over $130,000 saved by the time he reaches age 65 (that calculation uses a return of 6%, a standard assumption these days). If he waits 20 years, until age 40, to start saving, he’ll have to save four times that much each month to hit $130,000 in retirement.

That’s not to say that $130,000 is enough to float a retirement. But it shows the power of compound interest: In the first example, he only contributes $27,000 — the other $105,000 is from interest. In the second, $60,000 is saved out of pocket and $76,000 is earned as interest.

Don’t sabotage your efforts. I don’t hide the fact that I’ve made mistakes from my children, so I’ll no doubt share the story of my first 401(k). I amassed roughly $2,000, quite a bit on my $11,000 salary straight out of college. But when I left that job for greener pastures, the concept of rolling over my 401(k) into an IRA was lost on me. Instead, I cashed out, paid the taxes (ouch!) and spent the rest on new clothes. The lesson calls for more math: Had I left the money invested, I’d have an extra $20,000 for retirement, without contributing another dime. Running those numbers now, the flub still stings. I want to make sure my kids don’t make the same mistake.

Savings success is more about habit than skill. I have a Money Rule about this: The secret to successful investing isn’t talent or timing, its temperament. What it means: Smart investors ignore the short-term volatility and stay the course, buying even when things look bleak and sticking to plan rather than chasing winners when the market is soaring. Saving a little bit each month — and increasing that amount as often as you can, even if in small increments — is more likely to get you to retirement with money in your pocket. Timing the market, picking hot stocks, or pulling out when things get rocky will only get you burned.

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A conversation about retirement planning with my husband

If meeting with my accountant to pay taxes was enough to make me crawl under his desk and start popping anti-anxiety pills— you cannot imagine how much fun I have planning for retirement with my husband.

If meeting with my accountant to pay taxes was enough to make me crawl under his desk and start popping anti-anxiety pills— you cannot imagine how much fun I have planning for retirement with my husband.

If meeting with my accountant to pay taxes was enough to make me crawl under his desk and start popping anti-anxiety pills— you cannot imagine how much fun I have planning for retirement with my husband.

Conversations with my husband, Zeb, go something like this…

He leads with, “We need to sit down and talk about our retirement contri—"

“Did you know that the Earth is 92,960,000 miles from the sun?” I interrupt.

“Robin, seriously. Donna called and she needs to know how much—”
(Donna is our financial advisor. She leaves me voicemails saying, “Roooobin, it’s me again. Just seeing if you got my message earlier this week, or the week before. OR the week before. Call me back… or I’ll call you back. Again.”)

“Did you know that it would take 30-40 billion marshmallows to reach the moon?”

I do everything short of tap dancing on the kitchen table to distract and/or postpone “The Conversation.”

Talking about retirement planning sends my brain into wild fantasies of living off the grid. If we simply gave up on modern life we wouldn’t even need to plan. We could be those people you read about online: living in a 150 square foot trailer built out of recycled materials and dumpster diving for perfectly good food in the dumpsters behind grocery stores.

Zeb was raised on a farm with no air conditioning. He could totally be self-sufficient! He can plow a field with mules and has a thumb so green, I’m pretty sure that giant on TV is green from envy. I’ll pickle and can stuff to eat for the winter. Learning to gather seeds and berries can’t possibly be that difficult.

Then I remember I prefer clean manicured nails to nails caked in dirt. It comes back to me how much I value a decent bottle of wine and a nice rib-eye over trail mix– even the kind with chocolate chips in it. If a single night of camping is my worst nightmare, perhaps talking about our future is preferable to spending our golden years eating ramen noodles and soggy canned vegetables.

Our retirement plan has been very straightforward and simple. Since we married almost seventeen years ago, we have contributed the maximum amount our employers would match. The only exception being the times we were working part time to work our way through college. We try to give the maximum allowable into our accounts without paying a tax penalty.

October 19th-25th is National Saves for Retirement week . It’s a great opportunity to sit down to look at your savings plan for the future.

In addition, Wells Fargo has an online calculator which allows you to plug in all of your pertinent information and see if you’re on track for your financial future.

So go ahead and get your game face on— set aside time to sit down to plan for your retirement. Because nobody wants to live off of ramen noodles or without Wi-Fi, you’ve worked too hard to get ahead!

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Start saving for retirement early

Click to access an interactive “Cost of Waiting” graph on Wells Fargo’s Financial Advisor Insights eMagazine.

Click to access an interactive “Cost of Waiting” graph on Wells Fargo’s Financial Advisor Insights eMagazine.

It seems patronizing to say that young workers have to start saving for retirement early, but is it?

Retirement sits on the shoulders of today’s adults like no previous generation. Our grandparents and some of our parents not only had pensions, but full confidence that Social Security would be enough of a supplement to meet their needs. We have IRAs, 401(k)’s, SEP’s and Keogh’s that we have to fund ourselves. Social Security will likely be around, but how much of our living expenses it will cover is much more of an open question. And then there’s healthcare, the wildcard in the equation. According to Fidelity it’s estimated to add another $220,000 in expenses to the bottom line of a 65-year-old couple through their retirements.

That’s the macro explanation about why it’s better to start saving for retirement today rather than tomorrow. But inspiration often comes from going micro – looking at the details of what you’ll have if you get into the retirement saving game sooner rather than later. Take a look at this interactive graphic created by Wells Fargo that calculates retirement savings by annual contribution according to the age you start saving.

So, the question becomes, “How much should I save for retirement?”

If you start at age 20 and save $83 a month or $1000 a year, by the time you’re 60 you’ll have more than $300,000 (this assumes an 8% annual gain). That’s a nice sum of money – and a very different scenario than one facing the saver who didn’t start until age 30 (she’ll have just $133,000), 40 ($54,000) or 50 ($18,000 – yikes!)

Of course, the more you can save each month, the better off you’re likely to be. If you can save $5,000 a year (or $417 a month) from the time you’re 20, you’re looking at $1.4 million at age 60. Look at the difference, though, if you do it for just 10 years less. At 30 years, your total drops to less than half that amount — $612,000. And it’s a steep slope from there. With 20 years of saving you have just $247,000; and with 10, $78,000.

One thing to remember – it’s more important to start, than to start with a particularly high (or particularly round) number. Few people can start saving thousands a year in their 20s; many more can amp up their savings as their earnings increase in their 30s, 40s and 50s. So, here’s one more example to show you the power of just doing something when you’re young.

Say you start at age 20 and save $500 a year for the first 5 years. At age 25, you bump up your contribution to 1000 for another 5 years. At 30, you go to $1,500 and so on, bumping up your contribution by $500 every 5 years. By the time you’re 60, you’ll have put away almost $400,000. And if you can keep saving for another 5 years beyond that at the same rate, you’ll have closer to $600,000.

So, start saving today. Make your contributions automatically so that you don’t miss a month unintentionally. Put them in tax-deferred accounts where they can grow as quickly as possible. And visit your accounts once a month to see how well you’re doing. Trust me. The progress you make when you start saving for retirement early will inspire you to do more.

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