New Year’s Resolution: $20 A Week For Your Future

Steven BriggsThe Briggs BlogLeave a Comment

Every year, tens of millions of Americans start the new year by committing to saving more money for their future. And like most New Year’s resolutions, within the first couple of months, that resolution goes from deep conviction to the credit card bill coming to an emergency cropping up . . . and then it is all but entirely forgotten until next year. One reason this may be the case is because when people make New Year’s resolutions, they tend to shoot for the stars, figuring they’ll at least hit the moon if they don’t make it. But instead, their rocket had barely enough thrust to even get into the sky, so instead of reaching the stars or the moon, they plummet rapidly back to Earth.

I am suggesting a different approach, one that requires far less thought and has a much more likely chance of success. I’d like you for a moment to think about the idea of taking $20 a week and investing it, saving it away for retirement, paying your future self today.

You might be reading this and saying to yourself “What does $20 a week really do for me? Is that even a meaningful action?” Well, let me help you run some numbers on that and you can judge for yourself. Let’s assume that you plan to retire at age 70, and let’s also assume that through this period, you are earning the 30-year average return of the S&P 500 index, unadjusted for inflation – that is approximately 9.4% annually. This is what $20 a week could mean, depending on what age you begin this at.

At age 60, $20 a week could mean an additional $17,000 at age 70.
At age 50, $20 a week could mean an additional $59,800 at age 70.

At age 40, $20 a week could mean an additional $166,900 at age 70.
At age 35, $20 a week could mean an additional $270,800 at age 70.

At age 30, $20 a week could mean an additional $435,300 at age 70.
At age 25, $20 a week could mean an additional $695,800 at age 70.
At any age, $20 a week is meaningful, but clearly looking at the numbers the earlier you begin this habit, the more time it has to compound, to grow, to work for you so you don’t have to work as hard later on. 
As you look at this, I want you to think about how you could find $20 a week to contribute to your future. You could go out to eat one less time a week. You could cut back on a couple of subscription services. You could do a little extra side work and easily find at least $20 a week from those efforts. And when you find that $20 a week, consider setting up an automatic withdrawal so that you don’t have to take more steps than necessary to make sure that contribution regularly goes in. You won’t miss what you don’t see.

I am not suggesting that you flip the table on your life. You may get going with this and in a few months time, decide you want to do a little more, and that’s great. This isn’t about solving your long-term financial woes in a single, swift action. It is about building an attitude that favors something that likely doesn’t get much attention, isn’t really Instagramable, and yet is so important for your health and your future – building wealth. Consistency is the key. Value your future and be prepared for it with #20DollarsAWeek
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