Paying Yourself First
Many Canadian citizens should save up for retirement, but don’t. According to Global News, “there’s a disconnect happening in Canada. A large number of Canadians are looking forward to retirement – a time in their lives to be filled with travel, hobbies and quality time. But nearly half aren’t saving for it”. According to this website, 47 per cent of those polled aren’t contributing to a Retirement Savings Plan (RSP), one of the most popular tools for saving for retirement. RSPs are a powerful tool a Canadian can use to help save for their future retirement. If a young adult gets an RSP when they're young, they'll have lots of money saved up for when the time comes to retire.
One other tool one can use is compound interest. Compound Interest is a powerful tool one can use to their advantage. If you invest the smallest amount of money, compound interest will grow the cash exponentially. For example, if you invest $10,000 and earn 2.5% interest on the investment, you will earn $250 of interest, therefore making your balance $10,250. The next year, you will earn 2.5% on that $10,250. That will earn you $256.25, making your year-end balance $10,506.25. The third year, you will earn 2.5% on that $10,506.25, earning you $262.65 and making your balance $10,768.90. As you can see, you keep earning more and more on your investment. Some investments can command a powerful interest rate, sometimes even up to 25% and over, so investments like this is a good place for your money to go.
These two are just some of the ways a smart, young consumer can save up money for their future.
Caleb, I like the two ways you showed about paying yourself first. Firstly, I think it is important to save up for retirement because you can have a great and relaxing life instead of having to worry about money or a getting a job because you don't have enough. This has helped me because when I start making a good amount of income I am going to budget most of money to the rsp to have a great retirement. Lastly the idea of the interest is great because you can just keep on adding money and your money is making money, this is amazing and a great way to save up. Good work :)
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