1. Start with a full amount. Waiting until the end of a career to set aside a sizeable percentage, 2 to 15 percent of income, to save in a savings account and invest will make it impossible to get as much in return for money earned as a worker deserves. Setting aside the larger savings amount later in life is more difficult than at the beginning of a career.

The rate of growth for an account is not as important as the amount saved for the future. Holding on to pay during the early savings days can make a worker miss out on their main opportunity to end up with the largest sum of money they can.

2. Start saving early in life. Interest is a small amount added to savings each interest period, a day, a month, or a year. It takes time to add up to an amount that can make a worker secure for life. Compound interest adds to both the saved money and the interest earned before the day the current interest is added, but the growth rate for an account is not strong. The rate is steady. The interest earnings add up to a life savings over a lifetime career.

3. Do not take any losses. Early wtihdrawals from a savings account and losses taken on risky investments push back the date the savings goal can be reached. Sometimes for years.

Well managed savings and investments that are reliable and safe add up to the fullest amount that a worker can fairly earn with their productivity. No risks taken.

4. Use a diverse collection of investments. Reliable and slow earning investments in interest bearing savings accounts that earn 1 to 2 percent interest a year have the strength it takes to earn the entire career. Investments that give the investor back plenty in return, 4 percent to 10 percent a year, give diminished returns at times when the investments do not do well, and go up to a tall amount. A 4 percent investment of $1,000 totals $1,481 at the end of 10 years and $3,243 at the end of 30 years. A 10 percent investment totals $2,594 at the end of 10 years and $17,449 at the end of 30 years.

A collection of savings accounts and bonds and stocks and retirement accounts together are a secure investment an investor can count on to grow their savings.

5. Add the interest regularly. Every month is important. Every time the interest posts to an account there is an opportunity to total the returns of compound interest.

Do not let one penny go unnoticed. A penny made in interest today can keep earning 4 percent interest until two more cents are made. One hundred dollars earned will equal much more in return. Two hundred more dollars.

Source:

U. S. Labor Department, Savings Fitness: A Guide To Your Money and Your Financial Future (October 2010).