At what age should I start or stop saving money?

I am around 24. I've never saved money. I don't know when I should start or stop saving money.

• Is there an age where I should stop saving money?
• Is there an age when I should start saving money?
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If you don't save your money, what do you do with it? Spend it all on drugs? :b – fennec Mar 10 '10 at 16:39
Here's a simple formula. Take your current age and divide it by 1 to get the age you should start saving money. – JohnFx Nov 29 '10 at 16:10
I started saving money in my single-digit years old range, allowance and quarters I earned from cleaning out the fireplace. – DarenW Nov 30 '10 at 0:04

As AskAboutGadgets notes, there's no lower age limit. You current age (24) is a pretty good one; you'll have four decades or so for your money to grow and compound, allowing it to become a veritable fortune when you're ready to retire if you invest it fairly aggressively.

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The stock market has an average real (inflation-adjusted) rate of return of around 4 to 4.5%. That means your savings double roughly every 16-18 years. – fennec Mar 10 '10 at 18:27
@fennec That doesn't sound right. You shouldn't inflation-adjust for savings amount. I think you are confusing savings with spending power. Savings still double roughly every 10 years but it won't buy as much as it used to. – tp9 Sep 25 '12 at 7:52
@tp9 - Excuse me. I am not confusing anything. I have quoted an average real rate of return (I should have added in "annualized" as well, but whatever) of 4.5%. By definition and mathematics, that means a spending power doubling in around 16 years. I then refer to this as "your savings [doubling]" instead of "the spending power associated with the contents of your savings account doubling", and I contend that it makes perfect sense for an individual pondering the potential of "hmm, savings!" to think of it in those terms (and ignore the numbers on the accounts). Please deal with it; thanks. :) – fennec Sep 26 '12 at 1:03

While there is no age limit, bear in mind that saving money makes sense only if it doesn't delay your paying off expensive debt. If you have credit cards or expensive loans you would be best placed to focus on paying them down before saving a lot. If you save and keep debt, you'll effectively lose money as the interest on your debt will usually be higher than you can earn on savings.

Having said that, it's worth saving a small amount anyway to have as an emergency fund. As you pay off your debt, start saving the money you no longer have to pay out and it will soon pay dividends.

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There is no age-limit, in fact the sooner you start the better - the sooner the money starts to compound.

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Are you working? Does your employer offer a 401(k) and if so, is there any match?

Saving should be taught to kids at the same time they are old enough to get an allowance. There are many numbers tossed around, but 10% is a start for any new saver. If a college graduate can start by saving even 15%, better still. If you find that the 10% is too much, just start with what you can spare, and work to build that up over time, perhaps by splitting any future raises, half going toward savings, half to spending. Good luck.

Edit - my 12 yr old made good money this summer baby sitting. I'm opening a Roth IRA for her. A 10 yr head start on her retirement savings.

Edit (Jan-2013) - she's 14 now, 3 deposits to the Roth total \$6000, and she's planning to up the number this year. Her goal is to have \$50K saved in her Roth by the time she graduates college.

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If you're not using the full 401(k) benefit, you're losing more money on taxes than you would otherwise. – fennec Mar 10 '10 at 16:55
Oh, and if you're not using a 401(k) match then you're just ignoring free money. – fennec Mar 10 '10 at 18:27

As all said, the age limitation thing is nothing, and saving money not necessarily means to live poor nor Skimpy, spend your needs and try to get what you need instead of what you want, the 24 years old is a good start for saving money, the whole life still in front of you

Good luck!

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It's nearly always a good idea to save for your future, if you don't already have sufficient funds to see out the rest of your days. The hardest part of the saving decision is knowing exactly what portion of your funds to save.

If we save too aggressively, we risk having an adverse impact on our everyday life and, of course, there's always the possibility that we'll never make it to old age. But if we don't save, we risk the prospect of a poverty stricken retirement.

It's not always easy to find a balance. The best solution is to make so much money that we cannot possibly spend it all!

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You've never saved money? Have you ever bought anything? There probably was a small window of time that you had to pool some cash to buy something.

In my experience, if you make it more interesting by 'allocating money for specific purposes' you'll have better results than just arbitrarily saving for a rainy day.

Allocate your money for different things (ie- new car, emergency, travel, or starting a new business) by isolating your money into different places. Ex- your new car allocation could be in a savings account at your bank. Your emergency allocation can be in cash under your bed. Your new business allocation could be in an investment vehicle like a stocks where it could potentially see significant gains by the time you are ready to use it.

The traditional concept of savings is gone. There is very little money to be earned in a savings account and any gains will be most certainly wiped out by inflation anyway.

Allocate your money, allocate more with new income, and then use it to buy real things and fund new adventures when the time is right.

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