For the better part of my early twenties I acted like a financial ostrich. When I began to worry about our financial future, such as how we were going to live on one income, or pay off my school debt, or pay for my kids’ college education, I simply buried my head in the sand. After all, it was easier to do that than face the mess I had created.
Photo courtesy of lorentey
But those months spent with my head in the sand now represent time wasted for putting things back on track. The opportunities lost for compounding growth will never be recouped, no matter how much I save in my thirties and beyond. Sure, I can make up some ground, but that $10,000 I could have easily saved in that decade would have grown to hundreds of thousands by retirement. So what’s the lesson here?
If you are young, do not ignore your financial future
I know when you are young the thought of retirement is a distant future, but there are many things that happen between graduation and retirement that you need to plan for. Things like buying a home, a car, having children, paying for braces, paying for your children’s education, etc, all compete for your limited supply of money. Somewhere in all that you will need to continue to save for your own retirement, so why not get a head start before all these competing priorities enter the picture.
If you have your head buried in the sand, look up before you get run over
Remember the old Road Runner cartoons when Wile E. Coyote stuck his head down the manhole cover of a busy street, just as the sound of a truck began to rumble towards him. You knew what was coming next – WHAM! The truck hits Wile E. Coyote and sends him flying.
This is kind of like what happens to us ostriches. We keep our heads stuck in the sand because we don’t have to hear, and see, all the noise above the surface: The car payment we can barely make; the mortgage payment we are late on; the kids’ college fund with barely enough to pay for textbooks, much less tuition; the credit card debt that continues to climb thanks to a 28% interest rate. If you don’t look up soon, that “truck” will smack you right in the rear and send you flying.
It’s never too late to get started
Some of you might be reading this and thinking, yeah, great advice. Wish I had read it thirty years ago! It’s OK. I know it sounds cliche, but it really is never too late to get started. If you are 50 years old, have virtually nothing saved and a pile of debt, start working down that debt! And when it’s gone, start adding more to your retirement plan at work, open a Roth IRA, and begin to take back your financial future. It’s never too late to look up.