Saving is one attitude everyone must adopt to grow

Saving for retirement should be among everyone’s financial goals, regardless of age. No one knows what will happen to the social security system over the next generation or two, or what the official retirement age will be in 10 or 20 years time.

Ideally, you should start saving early in life, giving you ample time to grow your nest egg to a respectable size. The bigger the safe place, the more options you have when you need to tap into it. But with debt following most people throughout life, particularly in the form of student loans, mortgages and credit card balances – it’s hard to find a good time to start putting money aside. That’s why you should start saving for retirement even if you are still in debt. Here’s how to set priorities and deal with competing demands.

Put-up a rainy day fund. This will come in handy if you lose your job, become ill or otherwise suffer financial setbacks. A good emergency fund is enough to cover living expenses for at least three to six months. While growing this fund, keep up with minimum monthly payments on all of your debts. Then save for retirement.

Factor in age is one of the factors you need to consider, if you’re older or more financially stable, or if your employer matches your contributions to a retirement account, you’re probably better off saving for retirement while keeping up with minimum monthly payments on outstanding debts.

If you’re younger and your employer offers no retirement benefits, reduce debt before switching gears to retirement planning. Your balance will decrease each month as you become closer to being debt-free. This can free up some cash and save interest over the term of your loan or debt.

Reduced debt can improve your credit score, helping you achieve better lending terms in the future. This is important if you have financial project before retirement, such as starting a business or buying a home.

Pay off loans with the highest interest rates first–usually credit cards. Then you can move on to other debts like student loans, auto loans and mortgages. Depending on how much debt you have, this can require a financial commitment for months or even years. It’s important to keep at it until you’ve resolved your debts completely.

Just remember that your objective is to reduce your debts so that you can use your money for retirement. If you then rack up more debt, such as on a credit card, you’ll undo the intended benefits of paying off old loans.

Finally, become debt-free faster. If you’re nearing retirement and still can’t afford monthly debt bills, it’s time to change your approach so that you can live comfortably through your golden years.

TIAMIYU ADIO ISMAIL