Saving Just a Little More Can Make a Big Difference for Chicago Residents With Debt
When you see a penny on the ground, do you pick it up? Most folks don't bother.
One percent of a dollar might seem like small change, but when it comes to saving money for retirement - or for getting out of debt - one percent can be huge.
It can take a lot of motivation to start a savings plan when times are already financially tough. That's why starting in small increments can make the process more manageable. Worried that saving several more dollars from every paycheck won't be enough to make a difference? Just take a look at this nifty calculator tool from the New York Times. A little bit here and there really does add up in the long run.
Let's say you make $50,000 a year and you're already saving about 5 percent - or $2,500 - annually. If you're earning 3% interest, a reasonable to low number, you could have $25,000 in 10 years. But if you increased your savings rate by just 1 percent - an additional $500 - you'd be looking at $30,000. And if you increase your savings by one additional percentage point each year, you can more than double your nest egg to $53,000.
If you're currently saving zero, the results are even more staggering. When you start saving 1 percent of each paycheck, you'll go from having nada in 10 years to having $5,000. If you start at 1 percent, and then increase your savings by an additional percentage point each year, in a decade you'll have $27,000 - I'd say that's preferable to zero anyday.
A small increase in savings today can become a big difference tomorrow. Back to our example, saving 1 percent more a year means less than $10 a week. For most folks, that's as simple as cutting out a few extraneous expenses - maybe bring your lunch from home once a week, take a break from buying frappuccinos, cancel some services you don't use, paint your own nails instead of shelling out money to the manicurist - you get the picture.
There's no excuse for not saving. If you think you can't afford to save, take a good, hard look at your expenses and figure out what you can cut. Remember, you're not giving up spending - you're just putting it off so you can have more in the future. If you truly believe you can't afford to save a single penny because you've got so many bills to pay, then it's the bills that need cutting. Lowering debt is the fastest way to make that happen. And bankruptcy can often be the best way to lower debt. Contact one of our Chicago bankruptcy attorneys for a completely free one-on-one debt analysis today. Your future self will thank you.