Savings, the Earlier You Start the Better

If you have a savings plan, will you start to save now or do it later? Do you know that if you start your savings plan earlier is always an advantage? Let the figures proofs it to you.

As seen in the figure prepared. Jack and Jill have savings plans once they stepped into the working society. The difference was that, Jack started savings straight away and Jill decided to start savings 10 years later. It was all about discipline, Jack practiced "save-as-you-earn" habit, which was widely recommended in many personal money management magazines. Every time after he received his pay check, he saved part of the money first and then spent the balance. This has continued for years since Jack received his first pay check in the working society. Every year, Jack saved $10,000 in his bank with savings interest of 4% per annum.

After 10 years, Jill didn't forget that he has a savings plan. In order not to lack behind Jack's savings amount of $10,000 every year, Jill decided to double his saving amount to $20,000 every year.

It has been 30 years of working life. Jack and Jill decided to fully withdraw their savings together with the compounded interest on their savings. Guess what? Jill was really happy after he found out that he can save $31,101 more than Jack during total withdrawal. However, if we were to talk about savings capital, Jill's situation was not favorable. What if Jack was to save $20,000 annually when he knew that Jill's savings amount was $20,000 every year. If this was the case, Jill's total withdrawal will be really lesser as compared to Jack eventually.

Now, can you see the advantage of savings earlier? The power of compounding interest together with time can really make a huge difference in the savings figures. Well, if you think that it is perfectly OK to Save First And Spend Later every time you received your pay check, act now to open a Bank Savings Account. It is always an advantage to have savings.