A physician client of mine recently introduced me to a colleague of theirs. Mike and I sat inside a small coffee shop in McCaig, while the first snowfall of the year swirled outside.
Mike leaned forward, took a sip of his coffee, and said, “Adrian, I look back at all the money I’ve made over the years, and I wonder where it all went. I’ve never really been worried about it because I make a good income, but I’ve been practicing for over a decade and still don’t have a lot saved.”
He shook his head, “It’s kind of embarrassing.”
I know it wasn’t an easy thing to admit, and hey, he isn’t alone. I’ve heard it from more than a few doctors over the years, often when a serious relationship has started, or their colleagues are beginning to talk about their own plans for retirement.
“I get it.” I replied. “It’s just like winter. You know it’s coming, but it’s hard to think about in the middle of summer. Retirement is the same thing. Thinking about the next 10 or 20 years always feels like a long time away, but looking backwards it seems like only yesterday.”
I laughed. “I still feel like I’m in my 30s, but either my wife is secretly having fun colouring my hair grey while I’m sleeping, or I have to admit to being older than I feel!”
Mike grinned. “That’s it exactly! I just don’t want to be sitting here 10 years from now thinking the same thing and then REALLY feeling the pressure to save an enormous amount each month.”
“I know being on a regular savings plan might not feel very exciting.” I replied. “But let me give you three reasons why you’ll be glad you did. Saving early is the gift you give your future self!“
3 Reasons To Start Saving Early
“First, you’re going to create good money habits. I promise you you’ll be surprised at how easily they fit into your daily spending.
And you may be surprised where I tell my clients to start:
- Paying yourself first let’s you spend the rest guilt free.
That gave Mike pause. He leaned forward and said, “I never thought of it that way before. It would be great to know I can spend the rest if I want to and not regret it later.”
I continued.
2. Investing makes you thoughtful about the rest of your spending.
“I don’t want you to feel like you’re on a budget, but you’re far less likely to want to pull money from your investments vs money that’s just sitting in your bank account. And when you’re thoughtfully spending, you’ll also appreciate the things you’re spending on even more.”
Side note: I’ve done this with my own children. They’re not old enough yet to have investment accounts of their own, but having to take money from their savings account rather than their chequing account? It makes them really think about that video game they think they can’t live without. Adults are no different!
It’s not that I don’t want them spending their money, but I want them to learn to spend their money when it’s something they truly want and not just on impulse.
3. The sooner you start, the less you need to save.
“The math is pretty crazy. Let’s say you have 20 years until you want to retire. If you saved for the first 5 years and left it alone for the remaining 15, you’ll actually have more savings than if you started 10 years from now and then saved for the last 10 years – even though you’ll have contributed twice as much.”
“It’s really that easy?” Mike asked, his face showing both relief and disbelief.
“Yup. We simply start small and build up your savings rate as you adjust. Just like a healthy diet, it’s the act of starting and staying consistent that’s your key to success. It just becomes a part of your life.”
If you saved for the first 5 years and left it alone for the remaining 15, you’ll actually have more savings than if you started 10 years from now and then saved for the last 10 years – even though you’ll have contributed twice as much.”
Mike was excited when he saw the amount I wanted him to start saving and investing each month. “Wow! That is totally doable – I’ve been worried it was going to be a big, ugly number!” he said.
Listen. I’m not The Grinch ! You can save and still have a life too.
We started that day getting Mike’s savings plan created. We kept more for him to save, had less for the CRA to take, and 10 years from now he’ll be feeling happiness, not regret!
And at the end of the day? Your future self will be thanking you for the gift of saving!!
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