Saving money—it’s something everyone knows they should do, but not something that many people understand or even want to do. One of the most common questions people face is when they should start saving. A general rule of thumb: now is always better than later.
There are a number of reasons why people choose not to save for the future, ranging from not making enough money to simply wanting to enjoy things in the here and now. Some people blame not trusting the market, and many just don’t know where to start.
However, the earlier you start saving, the more the money can grow and the bigger the payoff when retirement or a rainy day rolls around.

1. Make Emergency Fund

No matter how much you plan, rainy days always come up—you might lose your job, get in a car accident, or face major unexpected repairs on your house.
Every financial expert will tell you that the first thing you need to do is create an emergency fund, even if you currently have consumer debt like credit cards or car loans. Once the consumer debt is paid off, you should aim to keep a savings account full of six months of bare-bones expenses, including housing, food, and utilities.
The emergency fund gives you a cushion in case the unthinkable happens and makes it possible so you don’t have to dip into debt to cover future costs.

2. Set aside money for Big Purchase

From a car to a house to college, there are plenty of large expenses throughout life that can be costly if you don’t start planning for them now. Instead of going into debt for these purchases, smart savers start early and break down the larger amount into smaller pieces of their monthly budget.
If you plan on buying a house or upgrading within a few years, start now by setting aside some money every month—even a small amount can make a difference.
Similarly, parents can start saving for their children’s college and other expenses through special education savings plans. Saving just a little now will likely be much easier than swallowing the entire sum or going into debt when the purchase comes along.
 

3. Save for Retirement

Saving for retirement can be a daunting task. Many people avoid it because it can be overwhelming or feel too far off to matter at the moment.
If your retirement savings strategy is less than stellar, you aren’t alone—only about half of people in a recent survey are saving enough for retirement with a decent standard of living. The good news is that there are lots of ways to save for retirement early, and most of them are automatic so you don’t even have to think about making deposits after initially setting it up.
Many employers offer automatic retirement plan savings, which means you won’t even have to see the money before it moves into the account—this is the most common option and can help people get over the mental block of taking money out of their paycheck every month.
For those without employer assistance or those wanting to save even more, nearly every bank and financial institution has a wide array of long-term retirement savings accounts and a savings specialist who can guide you in the right direction.
Still not convinced to start saving early? Financial advisors have calculated that putting money into a retirement account starting at age 20, even just $3,000 a year, can turn into $2.5 million by the time you reach retirement age. Waiting to start saving the same amount until age 30, which is still an early start, can yield a retirement total that is just under $1 million. Waiting the extra decade to save can cost you more than $1 million.
Although saving now might not be the most exciting thing in the world, most financial advisors agree: putting money aside now can set you for financial success now and in the future.