How Much Money Will You Save?

All twenty somethings have heard the same line just about as many times as we have gone out for drinks after exams- In order to accumulate capital you need to save slowly, month by month and even day by day. The problem is that this line means nothing unless you can visualize results. When I started saving money I thought it was the most boring concept in the world. You’re telling me I need to save a couple hundred dollars a month for many years to accumulate enough for a mortgage down payment? I thought the idea sounded insane.

Don’t feel bad if you’re a 20 something that thinks saving money slowly is a boring process because we all do. The trick is to run the numbers to see how much money you can save by automating your finance or by tightening up your budget a bit. This is why I urge all of you to check out the following financial calculator:

Savings Calculator- A look at how much money you can save with options for changing the payment amount, frequency, and interest rate.

Please allow me to run a simple example for you guys to illustrate how small financial changes can equal big results. When I first started my job 4 years ago I decided to see what I could do with $50 every pay period. I went to the Payroll Office and filled out some simple forms to automate a deduction of $50 every 2 weeks. After running the numbers through the savings calculator I came up with some interesting results:

$50 every 2 weeks =26 X a year= $1,300

$50 every 2 weeks= 26 X a year x 4 years + 2% interest= $4,9444

That is almost 5 grand in an account after only deducting a simple $50 every 2 weeks. Now granted I know I’m not going into the detail of discussing different investment vehicles and taxes but you get the general idea.

Now it’s your turn: Run some numbers through the calculator to see what changes you need to make to reach your goal. Or you can run the numbers to see how long it will take you to save up for that new car or for that new condo down payment. All that I ask is that you guys run some numbers through the calculator and then share your results with us here.