LUKE AIR FORCE BASE, Ariz. — Having a savings plan can be important for those who want to retire, buy a house or just have extra money available in case of an emergency.
According to Susan Wilinski, 56th Force Support Squadron Airman and Family Readiness Center community readiness specialist, starting a savings plan is essential for unplanned events.
“Things happen, sometimes good and sometimes bad,” Wilinski said. “If you have money saved, you will be able to afford a spontaneous trip with friends to San Diego or a trip home to attend grandma’s funeral.”
For Edwin Robinson, 56th FSS A&FRC community readiness specialist, there’s never a better time to start saving than now.
“The longer you wait, the more money you’ll need to save to meet your goal,” Robinson said. “By the time today’s newborns are set to enroll in college, four years at a public university will cost more than $200,000. While getting an early start is key, it’s never too late to begin saving for those you care about.”
While saving up for a loved one’s education is essential, thinking about retirement can be the last thing on a young person’s mind, according to Wilinski. However, saving money for retirement is a must, even when you’re young.
“We will be responsible for a greater chunk of our retirement income,” Wilinski said. “Our grandparents either relied or rely heavily on Social Security and pensions to finance their retirement. Today, we must depend on our own personal investments.”
Although thinking about retirement and children’s college funds may seem years away, Wilinski said the best part about starting earlier in life is that your money will have more time to grow. Simply put, TIME+MONEY=compound interest.
“A 21-year-old who starts saving $100 per month ends up with the same amount at retirement as a 30-year-old who saves $550 per month or a 50-year-old who saves $1,650 per month,” Wilinski said.
Robinson said he recommends making small changes in the beginning.
“Except for a home or a good low-cost vehicle, avoid using credit for purchases,” Robinson said. “Pay down debt quickly and start saving the money you would normally pay to debt. Credit is a downfall which can cost you 50 times more money with calculated interest and late fees.”
Cory Carmichael, 56th FSS A&FRC community readiness specialist, advises people to start saving by creating an allotment or automatic transfer to a separate account.
“Allotment or automatic transfers to a separate account make it easy to save — out of sight, out of mind,” Carmichael said. “Start small and think big. One doesn’t need to sacrifice a lot and even modest, regular deposits can make a big difference. Just like any other habit, good or bad, it gets easier with time.”